H313537

HQ H313537 October 16, 2020 OT:RR:CTF:VS H313537 AP CATEGORY: Origin Ms. Melissa Fox Trade Compliance Services Vandegrift Forwarding Company, Inc. 20 South Charles Street, Suite 501 Baltimore, MD 21201 RE: Country of origin of finished golf club drivers Dear Ms. Fox: This is in response to your August 4, 2020 ruling request, filed on behalf of Cobra Golf Incorporated (“Cobra Golf” or “importer”), regarding the country of origin of golf club drivers identified as FMAX, SZ and 2021 SZ. FACTS: Cobra Golf designs, manufactures, and markets golf products and services. The subject goods are finished golf club drivers classifiable in subheading 9506.31.00, Harmonized Tariff Schedule of the United States (“HTSUS”). The FMAX, SZ, and 2021 SZ golf club drivers are assembled in China with heads, shafts, and grips sourced from various countries as follows: Model Head Shaft Grip Assembly  FMAX Taiwan China China China  SZ Taiwan Bangladesh China China  2021 SZ Taiwan Vietnam China China   You explain that the production process for the driver head in Taiwan consists of treating, melting, and casting raw titanium using a wax injection mold. During the wax injection process, wax is injected into a tooling or mold to form the shape of the finished head. The titanium material of Taiwan origin is melted in a high temperature furnace and is then cast into the de-waxed, pre-heated shell clusters. After the casting is complete, the shell clusters undergo a de-shelling process and are broken into individually cast golf heads. Each titanium golf head cast is sandblasted and polished into the final size and shape of the corresponding golf head model. The titanium driver golf heads are then inspected, packed, and shipped from Taiwan to China for the final cosmetic finishing operations. The material composition of the driver shaft is: carbon fiber (75 percent of Japanese origin) and resin (25 percent of Chinese origin). The graphite shaft is manufactured in China (model FMAX), Bangladesh (model SZ) and Vietnam (model 2021 SZ) by wrapping sheets of graphite composite material around a steel mandrel. The composite sheets are cut into different sizes and shapes called flags. These sheets are wrapped in various directions around the shaft depending upon the design of the shaft. The wrapping process is done by hand using computer-controlled alignment rollers. The completed shaft is shrink-wrapped in a cellophane material and heated in an oven to approximately 250 degrees to bond the individual wraps together. The shaft is then cooled, the wrap is removed, and the shaft is sanded to exact frequency tolerances. The driver grip is made in China through an injection molded process. The grip is made from rubber compound of U.S. origin. The manufactured head, shaft, and grip are assembled into a golf club in China. ISSUE: What is the country of origin of the FMAX, SZ and 2021 SZ golf club drivers? LAW AND ANALYSIS: Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides, in relevant part: (a) Marking of articles Except as hereinafter provided, 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 manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. Part 134, U.S. Customs and Border Protection (“CBP”) Regulations (19 C.F.R. Part 134), implements the country of origin marking requirements of 19 U.S.C. § 1304. Title 19, Section 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 this part; ….” A substantial transformation occurs when an article emerges from a manufacturing process with a name, character, or use, which differs from the original material subjected to the process. In Nat’l Hand Tool Corp. v. United States, 16 CIT 308, aff’d per curiam, 989 F.2d 1201 (Fed. Cir. 1993), the Court of International Trade determined that hand tool components, which were cold-formed and hot-forged in Taiwan into their final shape, with post-importation processing such as heat treatment and electroplating, and assembly occurring in the United States, did not undergo substantial transformation in the United States. There was no change in name because each article as imported had the same name in the completed tool. There was no change in character because the articles remained the same after heat treatment, electroplating, and assembly in the United States. The use of the imported articles was predetermined at the time of entry – each component was intended to be incorporated in a particular finished mechanics’ hand tool, except for one exhibit with a dual use. The court rejected the importer’s claim that the value added in the United States was relatively significant to the operation in Taiwan so that substantial transformation should be found, determining that such a finding could lead to inconsistent marking requirements for importers who perform exactly the same processes on imported merchandise but sell at different prices. Headquarters Ruling Letter (“HQ”) 734256, dated July 1, 1992, explained that a simple assembly of already finished components into golf clubs did not result in a substantial transformation: … the making of the golf club is a simple assembly process of basically finished parts. We note that there is a hole on the top of the head so no drilling is necessary. The combining of the head and shaft is a relatively simple operation which does not take a great deal of time and skill and not a complex assembly. Basically, all that is needed to make the finished club is to insert the shaft into the head and to glue them together … Although U.S. made grips are added to the golf clubs, the grips are much less significant components as compared with the heads and shafts and their insertion onto the golf clubs is fairly simple. In other words, we find because the most important components are foreign and the assembly process is very simple there is no substantial transformation of the shafts and heads. The ruling concluded that if heads made in Taiwan and Japan, and shafts made in Japan were not substantially transformed by assembly in the United States, the country of origin of each of these components had to be separately marked to indicate its own country of origin. HQ 562778, dated Sept. 5, 2003, concluded that for clubs assembled in the United States where both the shaft and the head were made in China or Taiwan, no substantial transformation occurred in the United States and the country of origin of each foreign component had to be indicated on the club or the container. If the head and the shaft were made in two different countries, each country of origin had to be indicated in the marking such as “shaft made in China” and “head made in Taiwan.” However, in HQ 560693, dated Mar. 6, 1998, golf clubs were assembled in Taiwan using heads cast in either Taiwan or China, shafts manufactured in either Korea or the United States, and rubber grips manufactured in Thailand. The ruling held that where the driver head or shaft was of the same origin as the country where the assembly of the clubs occurred, the country of origin of the clubs was the country where the assembly was performed. That is, assembling golf clubs in Taiwan using club heads of Taiwanese-origin and imported shafts and grips, substantially transformed the imported components into products of Taiwan. Accordingly, the country of origin of the assembled golf clubs was Taiwan. HQ 563286, Aug. 25, 2005, concluded that when imported heads and grips, and U.S.-made shafts were 

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides, in relevant part:(a) Marking of articles Except as hereinafter provided, 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 manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article.Part 134, U.S. Customs and Border Protection (“CBP”) Regulations (19 C.F.R. Part 134), implements the country of origin marking requirements of 19 U.S.C. § 1304. Title 19, Section 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 this part; ….”A substantial transformation occurs when an article emerges from a manufacturing process with a name, character, or use, which differs from the original material subjected to the process. In Nat’l Hand Tool Corp. v. United States, 16 CIT 308, aff’d per curiam, 989 F.2d 1201 (Fed. Cir. 1993), the Court of International Trade determined that hand tool components, which were cold-formed and hot-forged in Taiwan into their final shape, with post-importation processing such as heat treatment and electroplating, and assembly occurring in the United States, did not undergo substantial transformation in the United States. There was no change in name because each article as imported had the same name in the completed tool. There was no change in character because the articles remained the same after heat treatment, electroplating, and assembly in the United States. The use of the imported articles was predetermined at the time of entry – each component was intended to be in