H314638

HQ H314638 April 22, 2021 OT:RR:CTF:VS H314638 JMV CATEGORY: Origin Jeremy R. Page Page-Fura PC 939 W. North Avenue, Suite 750 Chicago, IL 60642 RE: Country of origin of a Motor Assembly; Section 301 trade remedy; Marking Dear Mr. Page: This is in response to your request, dated October 4, 2020, filed on behalf of your client Adient Yanfeng Seating Mechanism Co., Ltd. (“AYSM”). In your letter, you request a binding ruling on the applicability of Section 301 trade remedies and country of origin marking for a motor assembly. FACTS: The product at issue is a motor assembly produced under five manufacturing scenarios where different variations of the motor components are assembled in the countries identified. The assembly operations of the subject motors under each scenario are largely the same: The commutator is pressed onto the rotor core with a machine press; The rotor is wound with insulated winding wire (winding machine); The rotor assembly is further worked by welding commutator hooks; The rotor assembly is turned and balanced; The bearing, retainer disk, and bearing bracket are machine-pressed onto the stator; The stator assembly is magnetized; The rotor assembly is inserted into the stator assembly; The brush card is attached; The rear cover (containing the second bearing) and front cover are attached and riveted; and The electric motor is tested. Scenario 1 In this scenario, the motor assembly would take place in Vietnam from the following components: A stator of Vietnamese origin; A rotor produced in Vietnam from a rotor core assembly of Vietnamese origin, a commutator of Chinese origin, and an enameled wire of Chinese origin; and The ball bearings, brush card, and all other remaining components of Chinese origin. In Vietnam, a machine press is used to fix the commutator onto the rotor shaft. The wire is wound around the rotor core and then the assembly of the remaining components, as described above, produces a functional electric motor. Scenario 2 In this scenario, the motor assembly would take place in Vietnam from the following components: A complete rotor assembly of Chinese origin A stator assembly of Vietnamese origin The ball bearings, brush card, and all other remaining components of Chinese origin. In Vietnam, the rotor assembly is combined with the stator assembly. In this scenario, the rotor is wire wound in China prior to export to Vietnam. Then, assembly of the remaining components, as described above, produces a functional electric motor. Scenario 3 In this scenario, the motor assembly would take place in Mexico from the following components: A rotor core assembly of Vietnamese origin, the commutator of Chinese origin, and enameled wire of Mexican origin. A stator assembly of Vietnamese origin The ball bearings, brush card, and all other remaining components of Chinese origin. In Mexico, a machine press is used to fix the commutator onto the rotor shaft. The rotor subassembly is wound with the wire and then the assembly of the remaining components, as described above, produces a functional electric motor. Scenario 4 In this scenario, the motor assembly would take place in Mexico from the following components: A rotor core assembly of Vietnamese origin, the commutator of Chinese origin, and enameled wire of Chinese origin. A stator assembly of Vietnamese origin The ball bearings, brush card, and all other remaining components of Chinese origin. In Mexico, a machine press is used to fix the commutator onto the rotor shaft. The rotor subassembly is then wound with the wire and then the assembly of the remaining components, as described above, produces a functional electric motor. Scenario 5 In this scenario, the motor assembly would take place in Mexico from the following components: A rotor assembly of Chinese origin A stator assembly of Chinese origin The ball bearings, brush card, etc. (all remaining components) are of Chinese origin. In Mexico, the rotor assembly is combined with the stator assembly. In this scenario, the rotor is wire wound in China prior to export to Mexico. The assembly of the remaining components, as described above, produces a functional electric motor. The motor assembly is classified under subheading 8501.10.60 of the Harmonized Tariff Schedule of the United States (“HTSUS”). The components involved and their corresponding subheadings under the HTSUS are as follows: Rotor Core Assembly 8503.00  Commutator 8503.00  Enameled Wire 8505.11  Stator Assembly 8503.00  Disk 8503.00 or 7326.90  Ball Bearing 8482.10  Bracket 8503.00 or 7326.90  Brush Card Assembly 8503.00  Cover Bearing 8482.10  Front Cover 8503.00  Worm 7326.90   ISSUE: What is the country of origin of the motor assembly in each of the five scenarios for the purposes of applying Section 301 trade remedies? What is the country of origin of the motor assembly for marking purposes in scenarios 1 and 2? What is the country of origin of the motor assembly for marking purposes under scenarios 3-5? LAW AND ANALYSIS: Section 301 Duties and Marking in Scenarios 1 and 2 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 USTR’s 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(d), HTSUS. Among the subheadings listed in U.S. Note 20(d) of Subchapter III, Chapter 99, HTSUS, is 8501.10.60, HTSUS. When determining the country of origin for purposes of applying trade remedies under Section 301, the substantial transformation analysis is applicable. Section 304(a) of the Tariff Act of 1930, as amended (19 U.S.C. § 1304(a)), provides that, unless excepted, 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.” Congressional intent in enacting 19 U.S.C. § 1304 was “that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940); American Burtonizing Co. v. United States, 13 Ct. Cust. 652, 654 (Ct. Cust. App. 1926). Part 134, Customs Regulations (19 C.F.R. Part 134), implements the country of origin marking requirements and the exceptions of 19 U.S.C. § 1304. Section 134.1(b), Customs Regulations (19 C.F.R. § 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 the marking laws and regulations. Therefore, for both marking and Section 301 trade remedy purposes, substantial transformation is the test for determining country of origin. 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 deciding whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the

Section 301 Duties and Marking in Scenarios 1 and 2The United States Trade Representative (“USTR”) has determined that an additional ad valorem duty of 25% will be imposed on certain Chinese imports pursuant to USTR’s 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(d), HTSUS. Among the subheadings listed in U.S. Note 20(d) of Subchapter III, Chapter 99, HTSUS, is 8501.10.60, HTSUS. When determining the country of origin for purposes of applying trade remedies under Section 301, the substantial transformation analysis is applicable. Section 304(a) of the Tariff Act of 1930, as amended (19 U.S.C. § 1304(a)), provides that, unless excepted, 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.” Congressional intent in enacting 19 U.S.C. § 1304 was “that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940); American Burtonizing Co. v. United States, 13 Ct. Cust. 652, 654 (Ct. Cust. App. 1926).Part 134, Customs Regulations (19 C.F.R. Part 134), implements the country of origin marking requirements and the exceptions of 19 U.S.C. § 1304. Section 134.1(b), Customs Regulations (19 C.F.R. § 134.1(b)), defines “country of origin” as the country of manufacture, production, o