The country of origin of a Bit & Holder Set with Carabiner and a Bit Holder Set with Carabiner

N347176 April 17, 2025 OT:RR:NC:N1:118 CATEGORY: Origin M. Jason Cunningham Sonnenberg & Cunningham PA 780 Fifth Ave South, Suite 200 Naples, FL 34102 RE: The country of origin of a Bit & Holder Set with Carabiner and a Bit Holder Set with Carabiner Dear Mr. Cunningham: In your letter dated March 28, 2025, on behalf of your client, Great Star Industrial USA, LLC, you requested a country-of-origin determination for purposes of Section 301 and IEEPA duties. Pictures of the articles in different stages of manufacture were included with your submission, along with a detailed narrative of the manufacturing processes. The two items under consideration are identified as a Bit & Holder Set with Carabiner and a Bit Holder Set with Carabiner. The Bit & Holder Set with Carabiner consists of six different driver bits with standard 1/4" shanks and six bit holders that can receive standard 1/4" shanked bits. A key ring is attached to each bit holder, which is also attached to a carabiner. The six bits include the following heads: Torx, Philips, slotted, a small nut driver, and two socket driver adapters of 1/4" and 3/8" size. In their condition as imported, the bits may be used on their own to turn a nut, screw or socket. They can also be removed from the holders and installed into a drill or hand driver for proper turning. The holders do not act as a handle or mechanism to allow a user to apply force. The bit holder uses a spring and ball bearing to hold the 1/4" shank of each bit. The holder’s purpose and function are only to hold a bit for future use. The Bit Holder Set with Carabiner is the same as the first item, except that it does not include the six bits. It is intended for the user to supply their own bits for the holders. You have stated that each item will be produced in Vietnam and China, and you propose the following two production scenarios: Production Scenario for the Bit & Holder Set with Carabiner: In Vietnam, raw steel is cut, stamped or cold forged into the final shape, size and form of each of the bits, including the final shape and form of the driving end of the bits. The bits also have their final 1/4" drive shank size and shape formed in Vietnam. Also in Vietnam, raw aluminum is formed into the three major bit holder parts. The fully formed bits and holder parts are then sent to China where the bits undergo heat-treatment and surface-treatment. The three holder parts are surface-treated and then assembled by pressing them together with a Chinese origin spring and ball bearing. The six bits are inserted into the holders, and key rings are used to attach the bit holders to a Chinese origin carabiner before export to the United Sates. Production Scenario for the Bit Holder Set with Carabiner: In Vietnam, raw aluminum is formed into the three major bit holder parts. The holder parts are then sent to China. In China, the three holder parts are surface treated then assembled by pressing them together along with a Chinese origin spring, ball bearing, and key ring. Key rings are used to attach the bit holders to a Chinese origin carabiner before export to the United States. When determining the country of origin for purposes of applying current trade remedies under Section 301, the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling Letter H301619, dated November 6, 2018. The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character, or use different from that possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 681 F.2d 778 (C.C.P.A. 1982). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). In regard to the Bit & Holder Set with Carabiner, it is our view that the cutting, stamping and cold forging of the raw steel in Vietnam into the final shape and form of the bits impart the essence and essential function of the final item (i.e., turning a nut, screw or socket). We also note that in Vietnam, the final ¼” drive shank size and shape are formed. Based on the provided descriptions and pictures of the assembly and finishing operations performed in China, the bits are not substantially changed so as to transform them into new articles with a different name, character, or use. It is therefore the opinion of this office that the country of origin of the Bit & Holder Set with Carabiner is Vietnam. Regarding the country of origin of the Bit Holder Set with Carabiner, we note that only the three components of each holder are made in Vietnam. These three holder components are neither clearly recognizable as a bit holder nor are they in the final form of a finished bit holder after the production processes performed in Vietnam. The three holder parts are then sent to China where they are pressed together and assembled with a Chinese origin spring and ball bearing. The finished holder uses the spring and ball bearing to hold the shank of a bit. It is therefore our opinion that the three bit holder components are substantially transformed in China into a finished bit holder. Consequently, the country of origin of the Bit Holder Set with Carabiner is China. The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP. This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, please contact National Import Specialist Anthony Grossi at anthony.e.grossi@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division