H303177

HQ H303177 May 4, 2020 OT:RR:CTF:FTM H303177 TJS CATEGORY: Origin Ms. Marilyn-Joy Cerny Sandler, Travis & Rosenberg, P.A. 24 Smith Street Pawling, NY 12564 RE: Country of Origin; Air Purifiers; Substantial Transformation Dear Ms. Cerny: This is in response to your request for a binding ruling, dated February 28, 2019, and submitted on behalf of your client, Sunbeam Products, Inc. (“Sunbeam”), concerning the country of origin of certain air purifiers identified as the Holmes® True HEPA Allergen Remover (Model No. HAP8650) under two proposed manufacturing scenarios. It is your position that the country of origin for marking and duty purposes is Indonesia. Our ruling is set forth below. FACTS: The subject air purifier, the Holmes® True HEPA Allergen Remover (Model No. HAP8650), is an electromechanical device that utilizes a fan, a carbon pre-filter, and three high-efficiency particulate air (“HEPA”)-type filters to help remove allergens from the air. According to your submission, the air purifier removes 99.97% of airborne allergens and pollutants such as household dust (including dust mites), pet dander, smoke, mold spores, ragweed pollen, tree pollen, and grass pollen, and is effective in reducing odors. The air purifier uses a Holmes® HAPF60CS Carbon Pre-Filter (the “carbon pre-filter”) that can be removed and cleaned, and three Holmes® HAPF600T True HEPA Console Air Purifier Filters (the “HEPA filters”), which should be replaced every 3 to 4 months, as indicated by a filter monitor light that alerts users when they should be replaced. This particular model, the Holmes® True HEPA Allergen Remover (Model No. HAP8650), is called a “console” and measures approximately 21 inches high, 23 inches wide, and 10 inches long, and is recommended for use in large rooms measuring up to 310 square feet. According to your submission, Sunbeam is considering changing its sourcing and production of the imported air purifiers and requests a country of origin determination for both marking and duty purposes on two manufacturing scenarios. The two proposed scenarios are as follows: Manufacturing Scenario 1: Components Manufactured in Mexico, China and Indonesia with Assembly Operations and Plastic Components Injection-Molded in Indonesia The carbon pre-filters and HEPA filters that are used in the subject air purifiers will be manufactured in Mexico using Mexican components. Following manufacture, these filters are packaged in bulk and shipped to Indonesia for assembly into the completed air purifiers. The following components will be manufactured in China: small electrical parts (e.g., capacitators, switches); power cord/wiring; housing magnets; rubber parts (including feet, rings); metal brackets, grill, tube clip/fastener; printed circuit board (“PCB”); plastic fan blade; motor; and 3M tape. Packaging materials, including interior boxes, gift boxes, master cartons, and foam packaging materials will also be manufactured in China. These Chinese-origin materials will be shipped in bulk to Indonesia for assembly into the finished air purifiers and for use in the packaging. Most of the plastic parts including the housing components, control panels, switch covers, switch boxes, handles, and brackets will be injection-molded in Indonesia using plastic resin originating in Indonesia. The following components will also be manufactured in Indonesia: silicone parts, including the nylon fastening ribbon, insulation, and various washers; metal components, including fasteners (screws and nuts), locking mechanisms, lead-free solder wire and terminal caps; and packaging components such as printed stickers, labels, registration cards, product manuals, foam packaging, and plastic bags are also manufactured in Indonesia. According to your submission, each air purifier unit incorporates more than 50 screws and nuts. In addition to the manufacture of the above components, the Indonesian operations involve both the subassembly of certain components and final assembly into the completed air purifiers. You state that nearly every step in the process requires an inspection and recording of that inspection. The overall production process will involve over 50 production workers and supervisors and it takes approximately 60 minutes to assemble the more that 150 electrical and non-electrical components to complete each air purifier. Attachment 3 to your submission provides a detailed description and photos of the distinct production processes that would be performed in the assembly and packaging of each air purifier. The Indonesian operations include: (1) the manufacture of the above components; (2) the Pre-Steps; (3) Steps 1-19; (4) Subassembly of “small parts”; and, (5) further working of parts originating in either Indonesia or China. The 2 Pre-Steps involve labelling the gift box (“GB”). Steps 1-19 cover the final assembly, testing, and packaging, as follows: Install motor to motor bracket Install motor bracket to air drum Install fan blade to motor Install micro switch, capacitor to bracket Clipping wiring cap Install the front grill, motor wind drum to the front shell Clipping wiring cap Internal test & polarity test Internal test & polarity test Combine front & rear housing Performance testing Install filter & stick label Clean the product Overall checking of appearance Stamp date code on plug & paste 3M tape Put plastic bag on product Seal GB bottom, place down foam & add IB and registration card Put in GB, add foam, add IB and registration card & put filter sponge Seal the GB, put GB and unit into carton & put onto the pallet The subassembly of small parts includes: Install the grill to the front door Install upper and bottom lock, front net magnets to the front door Install bracket frame & metal frame to the door Fix PCB to the switch box Assemble the control panel to the front housing Assemble lamp to front housing Lock control panel and front shell Lock plastic foot of back shell Lock plastic foot of front shell Install doors on front shells Assemble rear handle, power cord to rear housing The further processing of certain parts include: Separate wires Pipe cutting Bend micro switch actuators Weld micro switch leads Heat shrinkable tube setting and blow molding Manufacturing Scenario 2: Components Manufactured in Mexico, China and Indonesia with Assembly Operations in Indonesia and Plastic Components Injection-Molded in China Manufacturing Scenario 2 is identical to Scenario 1 except that the plastic components used in each air purifier would be injection-molded in China rather than in Indonesia. As indicated above, the plastic components include the housing components, control panels, switch covers, switch boxes, handles, and brackets. ISSUE: What is the country of origin marking of the Holmes® True HEPA Allergen Remover (Model No. HAP8650) under the proposed manufacturing scenarios discussed above? LAW AND ANALYSIS: The marking statute, section 304, 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 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.” United States v. Friedlaender & Co. Inc., 27 C.C.P.A. 297, 302, C.A.D. 104 (1940). The country of origin marking requirements and the exceptions of 19 U.S.C. § 1304 are set forth in Part 134, Customs 

The marking statute, section 304, 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 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.” United States v. Friedlaender & Co. Inc., 27 C.C.P.A. 297, 302, C.A.D. 104 (1940). The country of origin marking requirements and the exceptions of 19 U.S.C. § 1304 are set forth in Part 134, Customs Regulations (19 C.F.R. Part 134). Section 134.1(b), Customs Regulations (19 C.F.R. § 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. A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, and use which differs from the original material subjected to the process. United States v. GibsonThomsen Co., 27 C.C.P.A. 267, C.A.D. 98 (1940); Texas Instruments, Inc. v. United States, 681 F.2d 778, 782 (1982). In determining whether the combining of parts or materials constitutes a substantial transformation, the deter