H308208


 HQ H308208 February 2, 2021 OT:RR:CTF:VS JMV H308208 CATEGORY: Marking Jason M. Waite, Esq. Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt 303 Peachtree Street, N.E. Suite 2980 Atlanta, Georgia 30308 RE: Country of origin marking for imported castings incorporated into different types of regulators, transducers, and valve positioners; substantial transformation, assembly, 19 CFR 134.35(a) Dear Mr. Waite: This is in reference to Headquarters Ruling Letter (“HQ”) 561405, issued to Marsh Bellofram Corp. (“MB”) on October 23, 2001, concerning the country of origin marking for imported castings incorporated into different types of regulators, transducers, and valve positioners. In that ruling, U.S. Customs and Border Protection (“CBP”) found the imported castings were substantially transformed when combined with the U.S. components in the United States to make the finished pressure controlling devices and therefore, the imported castings were excepted from having to be individually marked with their country of origin. CBP based this decision, in part, on HQ 561745, dated July 20, 2000, which was rescinded on September 19, 2000. See 34 Cust. Bull. & Dec., No. 39, 40-41, September 27, 2000. Therefore, we hereby modify HQ 561405 to remove reference to HQ 561745. The finding of HQ 561405 that the imported castings are substantially transformed in the United States and are excepted from marking requirements is unaffected. On November 11, 2020, CBP published its proposed modification of HQ 561405 in the Customs Bulletin, Volume 54, Number 44, pursuant to section 625(c), Tariff Act of 1930, (19 U.S.C. 1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub.L. 103-182, 107 Stat. 2057, 2186 (1993). No comments were received in response to the proposed modification of HQ 561405. FACTS: The imported products that are the subject of HQ 561405 are castings, which are incorporated in five types of finished products: spring-loaded regulators, dome-loaded regulators, pilot-operated regulators, transducers and valve positioners. MB makes several different models within each of these general categories of products. Each model may have different engineering features that allow for varying applications. However, HQ 561405 only discussed the finished products in terms of the five general categories. REGULATORS Certain of the castings MB imports are used in the manufacture of pressure-limiting devices called regulators. MB described their use as follows: a supply pressure on one side of a nozzle is reduced to a preset output pressure by compressing a control load, often exerted by a range spring, to produce a force equal to and opposite to the force the output pressure exerts on the other side of a diaphragm assembly. Functionally, when there is an imbalance between the output pressure and the control load, there is a corresponding reaction in the diaphragm and nozzle assemblies. If the output pressure rises above the pressure set by the control load, the diaphragm seat is Iifted from the plug, venting the excess pressure to the atmosphere until equilibrium is reached. If the output pressure drops below the pressure set by the control load, the control load mechanism acts through the diaphragm assembly unseating the nozzle plug and allowing the supply pressure to flow through the nozzle to the down stream port increasing the output pressure. Typical applications for the type of pneumatic pressure regulators that MB produces include: medical ventilators, robotic balancing arms, vibration isolation systems, tank blanketing systems, inert gas purging, air motors, natural gas engines, and burner controls. SPRING-LOADED REGULATORS MB imports castings for use in 11 types of regulators that fall into three distinct categories. The majority of MB’s regulators are spring loaded. In a spring-loaded regulator, the control load is set by a range spring. MB has provided a process sheet describing what must be done to produce a representative Type 41 spring-loaded regulator. The imported casting in the Type 41 is called the bonnet. In the United States, two are holes tapped in the bonnet, and it is combined with a U.S.-produced bushing. In making the Type 41 regulator, a second casting of U.S. origin called the body is used. This casting is sanded, reamed, has holes tapped in it, and is center drilled. Other components in the Type 41, such as the knob, must be assembled with a nut before being ready for use in producing the finished regulator. Another process sheet describes the individual packaging of a pipe plug, which is provided separately with each Type 41 regulator. The last process sheet applies to a particular part number, and it describes the steps necessary to produce the finished regulator. The process to produce the finished regulator includes positioning the diaphragm assembly, spring and spring guide onto the body; then positioning the bonnet before removing temporary build pins and driving and applying torque to four build screws. The assembled regulator then undergoes performance checking in accordance with quality control specifications. This entails visual checks, leakage tests, setting supply pressure and then recording output pressure to ensure that the device is performing with the critical precision that is demanded of it. Following the testing, the device is prepped for painting. Lubricant is also applied to the threads of the knob before it is installed in the regulator. Labels are subsequently attached. DOME-LOADED REGULATORS The second type of regulator that MB makes is called a dome-loaded regulator. These regulators are controlled through the use of dome-pressure transmitted through a diaphragm to provide the desired output pressure. MB provided an assembly diagram which includes a parts instruction diagram from the booklet provided with a sample Type 75 dome-loaded regulator. The diagram indicates that there are two imported castings used in making the Type 75 regulator--the body assembly, and a spacer. It also shows that there are many other parts involved in the production of the instrument. We understand that all of these other parts are of U.S. origin. In the United States, the imported body casting in the Type 75 regulator is fitted with a set assembly 0-ring using special lubricant. Then a screen, a pintle-ring, and a rubber gasket are all set into the body. Finally, another O-ring and baffle guide as well as a baffle plate assembly are installed in the body. The other imported casting, a spacer, is machined, has a hole drilled in it and is sanded and washed to ready it for assembly. The Type 75 regulator also includes a domestically sourced casting, the bonnet. This casting has a center hole tapped in it, while another component, a piston, must be machined, drilled cut and washed before being ready for use in making the finished regulator. A diaphragm is incorporated into the Type 75 regulator. Making the diaphragms is a complex process that entails forming fabric and elastomers according to specifications, then combining them, shaping them and incorporating them onto a diaphragm assembly that can be built into a Type 75 regulator. The process of producing the finished regulator includes: installing the lower diaphragm assembly after applying 0-ring lube to the lip seal, installing the spacer, installing the upper-diaphragm assembly in perfect alignment, positioning the bonnet, and then installing six build screws. The assembled regulator then undergoes performance checking in accordance with quality control specifications. This entails visuals checks, leakage tests, and setting supply pressure, then recording the output pressure to ensure that the device is performing with the critical precision that is demanded of it. Following the testing, the device is painted and labels are subsequently applied. PILOT-OPERATED REGULATORS MB also manufactures pilot-operated 

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. §1304), requires, subject to certain specified exceptions, that every article of foreign origin imported into the United States shall be marked to indicate the country of origin to the ultimate purchaser in the United States Part 134, Customs Regulations (19 CFR part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. §1304. An ultimate purchaser is defined in section 134.1, Customs Regulations (19 CFR 134.1), as “the last person in the United States who will receive the article in the form in which it was imported.” The regulation further provides that if an imported article will be used in manufacture, the manufacturer may be the ultimate purchaser if he subjects the imported article to a process that results in a substantial transformation. However, if the manufacturing process is merely a minor one which leaves the identity of the imported article intact, 19 CFR §134.1(d)(2) provides that the consumer or user of the article who obtains the article after the processing will be regarded as the ultimate purchaser.According to United States v. Gibson-Thomsen Company, Inc., 27 CCPA 267 (C.A.D.98), a U.S. manufacturer is considered to be an ultimate purchaser if a manufacturing process is performed on an imported item so that the item is substantially transformed in that it loses its identity and becomes an integral part of a new article will a new name, character or use. The court determined that in such circumstances, the imported article is excepted from individual marking. Only the outermost container is required to be marked. See Sections 134.32(d) and 134.35(a), Customs Regulations (19 CFR §134.32(d), 19 CFR 134.35(a)).If the manufacturing or combining process is a minor one which leaves the identity of the imported article intact, a substantial transformation has not occurred and an appropriate marking must appear on the imported article so that the consumer can kno