H309984

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H309984 September 11, 2020 OT:RR:CTF:VS H309984 RSD CATEGORY: ORIGIN M. Jason Cunningham, Esq. Sonnenberg & Cunningham 30 Wacker Drive Suite 220 No. 41 Chicago, Il 60606 RE: Country of origin of Bar Clamp and Pipe Clamps Dear Mr. Cunningham: This is in response to your letter dated February 25, 2020, submitted on behalf of Great Star Industrial USA, LLC (hereinafter “Great Star”) requesting a ruling concerning the tariff classification and the country of origin of Bar Clamps, and Pipe Clamps produced from Vietnamese and Chinese components. Your request for a ruling was originally sent to the National Commodity Specialist Division, but the portion of the request concerning country of origin was forwarded to the Office of Regulations and Rulings at Customs and Border Protection Headquarters, for a response. The National Commodity Specialist Division will answer your inquiry concerning the tariff classification of the product in a separate cover. FACTS: Great Star seeks a ruling regarding the origin for two types of clamps. PRODUCT ONE -- BAR CLAMP The first product under consideration is a bar clamp. The subject bar clamp is a hand tool also known as an F-clamp because its shape resembles the letter “F.” It is commonly used for woodworking in order to temporarily hold pieces of wood together while more permanent attachments, e.g. screws, can be applied or glue is allowed to dry. It consists of two vertical steel clamps, known as heads or jaws, with protective pads at the top that are attached to a horizontal steel bar. In operating the F-clamp, one vertical clamp (the “stationary head”) is fastened into a fixed position at the end of the horizontal bar, while the other vertical clamp (the “sliding head”) can slide along the length of the bar. The sliding head is locked into place by a disc clutch anywhere along the horizontal bar. There is also a threaded steel screw that tightens and loosens the clamp. To make the F-clamps, aluminum is molded into both the stationary heads and the sliding heads in Vietnam. Then, each head is polished before they are sent to China. These are the working parts of the hand tool and these two parts have the final shape, size, and form of either the stationary head or the sliding head. After the aluminum molded heads are formed in Vietnam, they are shipped to China, where two holes are drilled into the sliding head to match the size of the steel bar to which it will be attached and to allow the insertion of the steel swivel pad’s screw. Both heads are powder coated before final assembly and retail packaging. The heads are attached to the steel bar, the swivel pad is screwed into the sliding head, soft handles and pads are applied, and the disc clutch and spring are inserted. Except for minor drilling, painting, and minor assembly, the work performed in China does not change the basic nature of the jaws made in Vietnam. You indicate that the bar clamp has a different cost breakdown for the four different sizes of clamps (which range from 6 inches to 36 inches). One of the components of the bar clamp is a steel bar. It has a cold-drawn form that connects the fixed clamping head to the sliding clamping head. For the different sized bar clamps, you submit that the Chinese steel bar’s size greatly impacts the relative share of the costs involved in producing the bar clamp that can be attributed to either Vietnam or China. In other words, there is a range of costs involved in making the bar clamp that can be attributed to either Vietnam or China for the different sizes of the bar clamp. For the 6 inch bar clamp, the relative value of the costs of producing the bar clamps that can be attributed to Vietnam is 47 percent and 52 percent to China, but for the 36 inch bar clamp, the relative value is 30/70 (Vietnam/China). PRODUCT TWO -- PIPE CLAMP The subject pipe clamp is functionally similar to the bar clamp, supra, except that instead of clamp heads sliding along a flat steel bar, the heads are mounted and slide along a pipe, normally with a standard ½ inch or ¾ inch diameter that is purchased separately or otherwise supplied by the ultimate user. In other words, the subject article is imported into the United States without a pipe. In Vietnam, aluminum is molded into final size, shape, and form of the four key pipe clamp components. In China, the pre-cast holes are drilled and tapped before the four parts are powder coated. Final assembly consists of joining these four components with a Chinese origin screw, spring, and clutch disc. As with the bar clamp, the pipe clamp’s Chinese assembly consists of minor drilling, painting, and assembly. According to Great Star, for the ¾ inch pipe clamp, 50 percent of the costs involved in producing the product are attributable to the work performed in Vietnam and 50 percent of the costs are attributable to the work performed in China, but for the smaller ½ inch pipe clamp, a relative cost breakdown between Vietnam and China is 47/53 percent. ISSUE: What is the country of origin of the clamps? 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 (or its container) 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 an ultimate purchaser in the United States the English name of the country of origin of the article. The regulations implementing the requirements and exception to 19 U.S.C. § 1304 are set forth in Part 134, U.S. Customs and Border Protection Regulations (19 C.F.R. Part 134). 19 C.F.R. § 134.1(b) provides as follows: “Country of origin” means 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 this part... 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., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments v. United States, 681 F.2d 778, 782 (1982). In order to determine whether a substantial transformation occurs when components of various origins are assembled into finished 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, and 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 will be considered when determining whether a substantial transformation has occurred. No one factor is determinative. In National Hand Tool Corp. v. United States, 16 CIT 308, 310, aff’d, 989 F.2d 1201 (Fed. Cir. 1993), the court examined whether post-importation processing in the United States substantially transformed certain tools, that is, flex sockets, speeder handles, and flex handles, that had been cold-formed or hot-forged in Taiwan into their final shape prior to importation, with the exception of the speeder handle bars which were reshaped by a large power press after importation. The tools were subjected to a heat treatment which strengthened the steel followed by cleaning which consisted of sand-blasting, tumbling and/or chemical vibration to prepare their surfac

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that, unless excepted, every article of foreign origin (or its container) 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 an ultimate purchaser in the United States the English name of the country of origin of the article. The regulations implementing the requirements and exception to 19 U.S.C. § 1304 are set forth in Part 134, U.S. Customs and Border Protection Regulations (19 C.F.R. Part 134).19 C.F.R. § 134.1(b) provides as follows:“Country of origin” means 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 this part...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., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments v. United States, 681 F.2d 778, 782 (1982). In order to determine whether a substantial transformation occurs when components of various origins are assembled into finished 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, and 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 ski