The country of origin of oil-immersed transformers

N359776 April 8, 2026 OT:RR:NC:N2:207 CATEGORY: Origin Qi Yao Wang Johnny Cui Law Firm (Malaysia Office) No. 36A Jalan 4/91, Shamelin Star Capella C-31-1 Kuala Lumpe 56100 Malaysia RE: The country of origin of oil-immersed transformers Dear Ms. Wang: In your letter dated March 17, 2026, you requested a country of origin ruling on oil-immersed transformers, on behalf of your client, MY Global Electrics Sdn. Bhd. The merchandise under consideration is described as oil-immersed electrical power transformers identified by model numbers: SL-(G)-4400kVA, and ZGSL-(G)-4400kVA. The transformers are designed to step up or step down alternating current (AC) in power generation, transmission, and distribution system. They are mainly comprised of a laminated silicon-steel iron core with copper or aluminum winding, insulation, and transformer oil. The transformers operate based on the principle of electromagnetic induction. When AC flows through the primary winding, it generates a changing magnetic field in the transformer core, which induces a corresponding voltage in the secondary winding, thereby enabling the transformer to step up or step down the voltage level. The entire core with winding is immersed in oil which is both an electrical insulation and cooling medium dissipating the heat generated during operation. You state that the only difference between the two models is that ZGSL-(G)-4400kVA will incorporate a high-voltage compartment which is an empty enclosure for users to install different electrical components (switches, fuses, cables, etc.) pertaining to their specific needs. In your submission, you state that the entire manufacturing process takes place in Malaysia using components mainly sourced from China. The manufacturing process begins with cutting silicon steel sheets of Chinese origin into distinct shapes of the core. The lamination sheets are then stacked layer by layer in a staggered fashion. Once the core is assembled, upper and lower clamps are added to hold the stacked lamination sheets together resulting in a complete iron core. The core is then insulated using insulation paperboard. Next, the low-voltage coil is produced using foil material from China wrapped with insulation paper as the foil is wound. Then the high-voltage coil is wound using electromagnetic wire of Chinese origin. The finished low-voltage and high-voltage coils are assembled onto the limbs of the core creating the active part of the transformer. The finished transformer assembly is lowered into the tank which is then filled with transformer oil from India. Finally, electrical connections are made using various Chinese components including accessories. The finished transformer is then tested and packaged for shipment to the United States. When determining the country of origin for purposes of applying current trade remedies under Section 301 and additional duties, 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). Additionally, Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States, the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. 1304 was “that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” See United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940). Part 134 of the U.S. Customs and Border Protection (“CBP”) Regulations (19 CFR 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b), CBP Regulations (19 CFR 134.1(b)), defines “country of origin” as the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the “country of origin” within the meaning of the marking laws and regulations. Regarding the country of origin of the oil-immersed transformers, the raw materials of Chinese origin are substantially transformed in Malaysia to create the transformers with new name, character, and use. Furthermore, it is the opinion of this office that the finished core with low and high voltage coils establish the function of the oil-immersed transformer as it is the active part that steps up or down the voltage. As such, we find that the silicon steel sheets, foil material, and electromagnetic wires of Chinese origin are transformed in Malaysia into a new and different article of commerce with a distinct name, character, and use. As a result, this office finds that the oil-immersed transformers are considered a product of Malaysia for origin and marking purposes at time of importation into the United States. 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 Howard Suh at howard.suh@cbp.dhs.gov. Sincerely, (for) James P. Forkan Director National Commodity Specialist Division