H314180

HQ H314180 January 22, 2021 OT:RR:CTF:VS H314180 AP CATEGORY: Origin Michael Gamble Managing Consultant Expeditors Tradewin, LLC 1015 Third Avenue Seattle, WA 98104 RE: Combination refrigerator and freezer unit; Country of origin determination for purposes of Section 301 remedies Dear Mr. Gamble: This is in response to your September 4, 2020 ruling request, on behalf of Dometic North America (“Dometic”), regarding the country of origin of a combination refrigerator and freezer unit (model number DM2672) for purposes of application of subheading 9903.88.03, Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for “… articles the product of China, as provided for in U.S. note 20(a) to this subchapter and as provided for in the subheadings enumerated in U.S. note 20(b) [to this subchapter]” and that applies an additional 25 percent ad valorem rate of duty. FACTS: The merchandise at issue is a finished combination refrigeration and freezer unit, which Dometic states is classifiable under subheading 8418.10.00, HTSUS. The unit is assembled in Mexico from components manufactured in Mexico, the United States, China, Poland, Indonesia, Sweden, and Taiwan. There are over 190 component parts in each combination refrigerator and freezer unit. Under scenario 1, approximately 46 percent of the component parts have Mexican origin, approximately 44 percent have Chinese origin, approximately 8 percent have U.S. origin, and the remaining originate from Poland, Indonesia, Taiwan and Sweden. The foamed cabinet assembly, the gas valve burner assembly, the power/control module assembly power, and the wire shelving are manufactured in Mexico. The foamed cooling unit assembly, the integrated control wiring assembly, the fin pack assembly, the door assemblies, the bottom plastic shelves, the control interface display and bezel, and the light-emitting diode (“LED”) light/switch assembly are manufactured in China. The drain hose, the drip tray, the secondary burner housings/plate, the handle assemblies, the middle plastic shelves and the crisper bins and covers are manufactured in the U.S. The heater assembly is manufactured in Poland, the thermistor assembly in Sweden, the baffle assembly in Indonesia, and the hardware components in Taiwan. Under scenario 2, approximately 69 percent of the component parts have Mexican origin, approximately 29 percent have Chinese origin, 0.07 percent have U.S. origin, and the remaining originate from Poland, Indonesia, Taiwan and Sweden. The foamed cabinet assembly, the gas valve burner assembly, the power/control module assembly power, the wire shelving, the integrated control wiring assembly, the fin pack assembly, the door assemblies, the plastic shelving, the control interface display and bezel, the drain hose, the drip tray, the secondary burner housings/plate, the handle assemblies, the plastic shelving, and the crisper bins and covers are manufactured in Mexico. The foamed cooling unit assembly and the LED light/switch assembly are manufactured in China. The heater assembly is manufactured in Poland, the thermistor assembly in Sweden, the baffle assembly in Indonesia, and the hardware components in Taiwan. Below are images of the individual subassemblies and components of the unit: 
 The integrated control wiring sub-assembly interconnects the control interface display to the power control module after subsequent wiring and assembly steps in Mexico. The fin pack sub-assembly will transfer heat from the fresh food compartment to the cooling unit once they are assembled together in Mexico. The door sub-assemblies are the exterior refrigerator and freezer doors that seal and provide access to the inner compartments after they are attached to the cabinet assembly in Mexico. The components involved in the foamed cabinet sub-assembly include a refrigerator liner thermo-formed in Mexico with Mexican-origin plastic, a freezer box manufactured in Mexico from U.S.-origin aluminum sheet and U.S. injection-molded plastic, a front frame welded and painted in Mexico from Chinese-origin metal, flat aluminized chipboard of U.S.-origin bent into the jacket in Mexico, and an insulation foam mixture of Mexican-origin chemicals. The components involved in the gas valve burner sub-assembly include a valve of Italian origin, an ignition electrode assembly of Chinese origin, brackets and a mounting of U.S. origin, a jet assembly of French origin, a burner tube of Chinese origin, and fasteners of various origins. The gas valve burner assembly is the secondary heat source for the cooling unit. It delivers gas to the burner system to create an open flame. The components involved in the power control module sub-assembly include a power control module of Mexican or Canadian origin, brackets of U.S. origin, and power cord and wiring assemblies of Chinese origin. The power control module assembly is the main control system for the unit. It has 12V DC and 120V AC power connection inputs. The foamed cooling unit sub-assembly is filled with R717 refrigerant, hydrogen gas, and sodium chromate in China. It is not functional as a cooling element without the subsequent addition of controls, heat sources, and other complimentary components that are assembled with it in Mexico as part of the finished unit. The LED light sub-assembly is a small light that turns on when the refrigerator door is opened. The finished unit could function without the LED light sub-assembly. The heater sub-assembly is the primary heat source for the cooling unit. The baffle sub-assembly controls the rate of heat escaping from the heat exhaust tube. The thermistor sub-assembly is a monitoring device to measure the temperature of the fresh compartment and delivers data to the refrigerator temperature controls. In Mexico, the thermistor wire, display wire sub-assembly, and drain hose are threaded through their respective holes in the cabinet sub-assembly, and putty is used to seal the holes. The assembler in Mexico installs the fin pack sub-assembly to the back of the cabinet and applies mastic. The mastic seals between and adheres the fin pack to the fresh food cabinet liner to prevent air leaks in the finished unit. The Mexican assembler places the cooling unit subassembly into a cavity in the foamed cabinet subassembly and screws it into place. Aluminum tape is applied to the cooling unit to create a moisture barrier seal. The display wire subassembly ends are routed through and around the cooling unit. The heater sub-assembly is installed on the cooling unit, and the side and back heat shields are connected and secured to the flute on the cooling unit. Units with factory installed fans have a thermal switch secured to the fin pack for connection to the fan wiring and a fan bracket screwed to the back of the cabinet frame. The power control module sub-assembly and gas valve burner assembly are secured to the back of the unit. The gas valve burner sub-assembly attaches to the boiler tube section of the cooling unit with complementary wiring connections. There are a series of additional wiring connections between the control module and the LED light, display, thermistor, heater, fan, gas valve burner, and thermal switch. Screws are inserted into holes in the freezer liner and fin pack to connect them to the evaporator coil of the cooling unit assembly. Connection of the freezer liner to the evaporator section of the cooling unit permits absorption of heat in the air inside the freezer compartment to the evaporator coil of the cooling unit. Connection of the fin pack in the fresh food compartment to the evaporator section of the cooling unit permits absorption of heat in the air inside the fresh food compartment to the evaporator coil of the cooling unit. The insulation around the cooling unit and the immediate contact of the evaporator coil to the freezer liner and the fin pack of the fresh food compartment prevents the potential warm air condensation between the cabinet and

The United States Trade Representative has determined that an additional ad valorem duty will be imposed on certain Chinese imports pursuant to its authority under Section 301(b) of the Trade Act of 1974 (“Section 301”). The Section 301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter III, U.S. Note 20(b) and (f), HTSUS.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 (1982). In order to determine whether a substantial transformation has occurred, U.S. Customs and Border Protection (“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 Nat’l Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993).In Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016), the Court of International Trade interpreted the meaning of “substantial transformation.” Energizer Battery involved the determination of the country of origin of a flashlight, referred to as the Generation II flashlight. All of the components of the flashlight were of Chinese origin, except for a white LED and a hydrogen getter. The components were imported into the United States a