H306810

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection H306810 September 11, 2020 OT:RR:CTF:VS H306810 RSD CATEGORY: ORIGIN Mike Kim K&G Customs Service Inc. 5935 Buford Highway, Suite 300 Norcross, Georgia 30071 RE: Country of Origin of Automobile Wire Harnesses Dear Mr. Kim: This is in response to your electronic request submitted on October 22, 2019, for a binding ruling on behalf of SL Alabama, LLC regarding the country of origin of automobile wire harnesses. The National Commodity Specialist Division forwarded your ruling request to Regulations and Rulings in Customs Border Protection (CBP) Headquarters for a response. FACTS: The two products that are the subject of this ruling are wire harnesses used in the production of automobiles. The two products have been identified as ADA-00212758 and UMA-00202796. The wire harness are used for automotive lighting systems. These wire harnesses attach the front headlights of an automobile to its rear taillights so that power can be transferred between these two automotive lighting systems when necessary. Both of the wire harnesses are assembled together in China with parts of South Korean origin. All of the South Korean materials are sent to China for assembly into the finished wire harness. For ADA-00212758, the South Korean origin parts are as follows: insulated wire, connectors, socket holders terminal, bulbs, wire guide, and wire seal. The only Chinese origin component in the ADA-00212758 wire harness is a grommet. For the UMA-00202796 wire harness, all the parts assembled to make the product are of South Korean origin. The specific parts used in the production of this type of automotive wire harness are insulated wire, brackets, grommets, housings, terminals, seals, wire holders, and retainers. No Chinese made materials are included in the assembly of the product. The manufacturing process is the same for both types of wire harnesses. The insulated wire is cut to length. After the cutting, the wire is then sealed, crimped and bunched together. Next, the wires are then attached to a connector in place. The wire is installed into the connector housing and attached with the retainer clips to secure it. The harnesses are then taped and tied together to complete the finished article. The completed wire harnesses are shipped from China to the United States. ISSUE: What is the country of origin of the two subject wire harnesses for 19 U.S.C. 1304 and Section 301 purposes? LAW AND ANALYSIS: 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 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. By enacting 19 U.S.C. § 1304, Congress intended to ensure “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., 27 C.C.P.A. 297, 302 (1940). The country of origin marking requirements and the exceptions of 19 U.S.C. § 1304 are set forth in Part 134, Customs and Border Protection (CBP) Regulations (19 C.F.R. Part 134). Section 134.1(b), CBP 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, or 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). When determining the country of origin for purposes of applying current trade remedies under Section 301, the substantial transformation analysis is applicable. 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, 69 C.C.P.A. 151, 681 F.2d 778, 782 (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 determining whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. Id. at 1373. Assembly operations that are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. 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. Additionally, factors such as the resources expended on product design and development, the extent and nature of post-assembly inspection and testing procedures, and worker skill required during the actual manufacturing process may be considered when determining whether a substantial transformation has occurred. No one factor is determinative. CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. The Court of International Trade (“CIT”) has applied the “essence test” to determine whether the identity of an article is changed through assembly or processing. For example, in Uniroyal, Inc. v. United States, 3 C.I.T. 220, 225 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983), 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 were not substantially transformed into a product of the United States. Further, the court noted that the attachment of the outsole to the upper was a minor manufacturing or combining process which left the identity of the upper intact. In Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016), the CIT found that articles imported in a pre-fabricated form with a predetermined use are not substantially transformed by assembly into the final product, without more. In Energizer, the CIT interpreted the meaning of the term “substantial transformation” as used in the Trade Agreements Act of 1979 (“TAA”) for purposes of government procurement. Energizer involved the determination of the country of origin of a flashlight, referred to as the Generation II flashlight, under the TAA. All of the components of the Generation II flashlight were of Chinese origin, except for a white LED and a hydrogen getter. The components were imported into the United States where they were assembled into the finished Generation II flashlight. In reaching its decision in Energizer, the court expressed the question as one of whether the imported components retained their names after they were assembled into the finished Generation II flashlights. The court found “[t]he constitutive components of the Generation II flashlight do not lose their individual names as a result [of] the post-importation assembly.” The court also found that the components had a predetermined end-use as parts and components of a Generation II fl

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 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. By enacting 19 U.S.C. § 1304, Congress intended to ensure “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., 27 C.C.P.A. 297, 302 (1940). The country of origin marking requirements and the exceptions of 19 U.S.C. § 1304 are set forth in Part 134, Customs and Border Protection (CBP) Regulations (19 C.F.R. Part 134). Section 134.1(b), CBP 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, or 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). When determining the country of origin for purposes of applying current trade remedies under Section 301, the substantial transformation analysis is applicable. The test for determi