H313089

HQ H313089 February 16, 2021 OT:RR:CTF:VS H313089 UBB CATEGORY: Origin Laurence J. Lasoff Melissa M. Brewer Kelley Drye & Warren LLP Washington Harbour, Suite 400 3050 K Street, NW Washington, DC 20007 RE: Country of origin of a pump end; Section 301 trade remedy; 9903.88.01, HTSUS Dear Mr. Lasoff, Ms. Brewer: This is in response to your request, dated July 14, 2020, filed on behalf of your client Sulzer Pump Solutions, Inc. (“Sulzer”), regarding the country of origin of a “pump end” also referred to as a “bowl assembly.” In your letter, you request a binding ruling on the applicability of Section 301 trade remedies to proposed transactions involving this pump end. FACTS: The subject merchandise are vertical pumps that are used in a variety of applications to move a liquid. The pumps are usually made-to-order and are customized to the particular customer’s needs. You state that Sulzer has a wide range of vertical pumps and approximately 175 models. However, while specifications are customizeable, the raw material inputs and the production process for a vertical pump do not vary by specification and remain nearly identical. In your ruling request, you provide brochures and information for three examples of the vertical pumps that Sulzer manufactures. According to your ruling request, the vertical pumps are comprised of four main components: the motor, the discharge head, the column, and the pump end or bowl assembly. It is only the pump end that is the subject of this inquiry. The pump end is manufactured in Canada using the following thirteen (13) raw material inputs: suction bell, pump shaft, impeller, bowl, bowl bearing, impeller seal ring, stationary wear ring, thrust ring, thrust ring retainer, suction bell bearing, a locking collet, adaptor flange (for some smaller models), and often a suction strainer. Of these, the bowl, impeller(s) and suction bell are sourced from China. The remaining inputs are sourced from Canada. You also provide brief descriptions of the material inputs, including their function in the pump end: Suction bell: point of entry for the water; guides the fluid being displaced into the suction pipe; Pump shaft: the impeller is mounted on the pump shaft and it holds the impeller in place; Impeller: the bladed member of a rotating assembly of the pump, which imparts the force to the liquid being pumped; Bowl: the housing for the pump that holds the various parts of the pump end; Bowl bearings: hold the shaft in place; Impeller wear ring: reduce wear on the impeller while assuring minimum recirculation of fluid in the pump (also reduces maintenance costs); Stationary wear ring: attached inside the bowl opposite the impeller wear ring to allow limited clearance for liquid between the impeller and the pump casing to prevent unwanted recirculation of the liquid being displaced (also reduces maintenance costs); Thrust ring: used to ensure that the movement forces of the pump are evenly distributed; Thrust ring retainer: secures thrust ring in place; Suction bell bearing: secures suction bell in place and provides stability for the pump shaft; Locking collet: a ring that is pressed between the impeller hub and the shaft to fix the impeller in place; Adapter flange (for smaller pump models): allows connection of the column to the bowl assembly; Suction strainer: prevents unwanted articles from entering the pump. The manufacturing process in Canada is as follows: Sulzer first trims the impeller. The impeller is the component of the pump that forces the liquid to move upwards. The impeller is imported into Canada in template form and as such is capable of displacing water but is not functional to meet the specific customer needs for the pump. It is trimmed, filed and balanced to meet customer specifications. The trimming process refines the form and shape of the impeller by removing excess metal from the template form impeller. Once the impeller is trimmed, the suction bell is mounted to the production table for stabilization. Prior to assembly, an internal coating is applied to all cast items except the impeller if the pump end is to be used for potable water applications. The suction bowl is then bolted to the suction bell. The pump shaft is placed inside the suction bell. The impeller is then slid into the shaft and is positioned and fixed in place with a locking collet. If the pump end is to be a multi stage configuration, a second bowl is placed over the shaft and impeller and bolted into position. An impeller is then slid into the second shaft, positioned and fixed in place with a locking collet. These steps are repeated according the job requirements (i.e. depending on how many bowls are required for the pump end per customer specifications). Once all required bowls have been locked into place and the impellers positioned and fixed, an adaptor flange is slid over the shaft and bolted to the top bowl. The adaptor flange is necessary to connect the pump end to the next piece. The first time all these steps are completed a temporary pump end is created which is tested by being attached to a temporary test column section, discharge head and certified lab motor. The temporary pump is lowered into a test pit and run to secure measurements that are then analyzed. The temporary pump and pump end are then disassembled for further processing, including the impeller which may need further trimming, filing and balancing to the customer’s requirements. The pump end and pump are then reassembled as above and undergo further testing. This process may be repeated as needed to perfect the requirements. Once finished, the exterior of the pump end is painted or coated (if a coating is required for corrosion or wear resistance). ISSUE: What is the country of origin of the pump end for the purposes of applying Section 301 trade remedies? LAW AND ANALYSIS: There is no dispute that the instant pump end is classified under subheading 8413.91.90 of the Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for “Pumps for liquids, whether or not fitted with a measuring device…: Parts: Of pumps; Other; Other.” The United States Trade Representative (“USTR”) has determined that an additional ad valorem duty of 25% will be imposed on certain Chinese imports pursuant to its authority under Section 301(b) of the Trade Act of 1974 (“Section 301 measures”). The Section 301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter III, U.S. Note 20(b), HTSUS. Among the subheadings listed in U.S. Note 20(b) of Subchapter III, Chapter 99, HTSUS, is 8413.91.90, HTSUS. When determining the country of origin for purposes of applying current trade remedies under Section 301, the substantial transformation analysis is applicable. See Headquarters Ruling Letter (“HQ”) 563205, dated June 28, 2006. See also HQ H301619, dated November 6, 2018. 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 (1982). In order to determine whether a substantial transformation has occurred, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. CBP has stated that a new and different article of commerce is an article that has undergone a change in commercial designation or identity, fundamental character, or commercial use. A determinative issue is the extent of the operations performed and whether the materials lose their identity and become an integral part of the new article. 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). If the manufacturing or combining process is a minor one which leaves the identity of the article intact, a substantial transfor

There is no dispute that the instant pump end is classified under subheading 8413.91.90 of the Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for “Pumps for liquids, whether or not fitted with a measuring device…: Parts: Of pumps; Other; Other.” The United States Trade Representative (“USTR”) has determined that an additional ad valorem duty of 25% will be imposed on certain Chinese imports pursuant to its authority under Section 301(b) of the Trade Act of 1974 (“Section 301 measures”). The Section 301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter III, U.S. Note 20(b), HTSUS. Among the subheadings listed in U.S. Note 20(b) of Subchapter III, Chapter 99, HTSUS, is 8413.91.90, HTSUS. When determining the country of origin for purposes of applying current trade remedies under Section 301, the substantial transformation analysis is applicable. See Headquarters Ruling Letter (“HQ”) 563205, dated June 28, 2006. See also HQ H301619, dated November 6, 2018. 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 (1982). In order to determine whether a substantial transformation has occurred, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. CBP has stated that a new and different article of commerce is an article that has undergone a change in commercial designation or identity, fundamental character, or commercial use. A determinative issue is the extent of the operations performed and whether the materials lose their identity and become an integral part of the new article. 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.