H305966

HQ H305966 April 16, 2020 OT:RR:CTF:FTM H305966 TJS CATEGORY: Origin Ms. Christi Roos Mallory Alexander International Logistics P.O. Box 30209 4294 Swinnea Rd Memphis, TN 38118 RE: Country of Origin Marking; Screwdrivers; Substantial Transformation Dear Ms. Roos, This is in response to your request for a binding ruling, dated September 23, 2019, and submitted on behalf of your client, GreatNeck, concerning the country of origin of certain screwdrivers identified as the GreatNeck 6-in-1 Screwdriver (SKU SD4B). Your request was forwarded to this office by the National Commodity Specialist Division for review. Our ruling is set forth below. FACTS: The subject screwdriver, the GreatNeck 6-in-1 Screwdriver (SKU SD4B), is a multifunctional hand tool used for tightening and loosening screws and nuts. The GreatNeck Screwdriver set includes a plastic handle, a tubular steel shaft, and two double-ended bits each including a slotted head (1/4 inch or 3/16 inch) and a Phillips head (#1 or #2). The shaft has openings at each end into which the interchangeable screwdriver bits may be inserted. Additionally, each end of the shaft can be used as a nut driver (1/4 inch and 5/16 inch) without a bit. When not in use, one bit can be stored in the handle for easy accessibility. The tool measures approximately 7.5 inches in length. According to your submission, the shaft and collar are manufactured from raw steel in China and then shipped in bulk to Taiwan. In Taiwan, the bits are manufactured and the handle is produced from acetate plastic during an injection molding process. The Chinese-origin collar is pressed into the handle. A bit is inserted into the shaft, which is then inserted into the handle. The finished product is labeled, packaged, and shipped to the United States from Taiwan. ISSUE: What is the country of origin of the GreatNeck 6-in-1 Screwdriver? 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 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 determinative issue is the extent of the operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 6 C.I.T. 204, 573 F. Supp. 1149 (1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). If the manufacturing or combining process is a minor one that leaves the identity of the imported article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 C.I.T. 220, 542 F. Supp. 1026 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. The country of origin of the item’s components, extent of the processing that occurs within a country, and whether such processing renders a product with a new name, character, or use are primary considerations in such cases. No one factor is determinative. The Court of International Trade (“CIT”) has also looked at the essential character of an article to determine whether its identity has been substantially transformed through assembly or processing. For example, in Uniroyal, Inc. v. United States, 3 C.I.T. at 225, the court held that imported shoe uppers added to an outer sole in the United States were the “very essence of the finished shoe” and thus the character of the product remained unchanged and did not undergo substantial transformation in the United States. Similarly, in National Juice Products Association v. United States, 10 C.I.T. 48, 61, 628 F. Supp. 978, 991 (1986), the court held that imported orange juice concentrate “imparts the essential character” to completed orange juice and thus was not substantially transformed into a product of the United States when blended with water, oils, and essences. In National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993), the CIT determined that certain hand tool components used to make flex sockets, speeder handles, and flex handles were not substantially transformed in the United States. The components were cold-formed or hot-forged into their final shape in Taiwan prior to importation, with the exception of speeder handle bars, which were reshaped by a power press after importation, and the grips of the flex handles, which were knurled in the United States. The imported items were heat treated to strengthen the components, sand-blasted to clean the components, and electroplated to better enable the components to resist rust and corrosion. In making this determination, the court noted that the processing that occurred in the United States did not alter the name of the imported components, the character of the parts remained substantially unchanged upon the completion of such processing, and the intended use of the articles was predetermined at the time of importation. Although the court recognized that a predetermined use for imported articles does not preclude a finding of substantial transformation, the court noted that each component was intended to be incorporated in a particular finished mechanic’s hand tool. Moreover, National Hand Tool dismissed as a basis for a substantial transformation the value of the processing, stating that the substantial transformation test utilizing name, character and use criteria should generally be conclusive in country of origin marking determinations, and that such a finding must be based on the totality of the evidence. It is your position that the country of origin is Taiwan. You assert that the essential character of the screwdriver is imparted by the bits because the finished good is not considered a screwdriver without the bits, and the bits can be used by hand without the handle and shaft. To support your argument, you claim that New York Ruling Letter (“NY”) N024981, dated March 20, 2008, states that the “blade” constitutes the essential character of the screwdriver. NY N024981 concerned the country of origin of a screwdriver o

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 dete