H322922

 HQ H322922 January 28, 2025 OT:RR:CTF:VS H322922 ARU CATEGORY: Origin Jeremy Ross Page Page Fura, P.C. 939 W. North Avenue, Suite 750 Chicago, IL 60642 RE: Country of Origin; USMCA; Propylene Elastomers Dear Mr. Page, This is in response to your correspondence dated October 8, 2021, in which you request a ruling on behalf of your client, [X], regarding United States Mexico Canada Agreement (USMCA) eligibility and the country of origin for marking purposes of propylene elastomers. Your request, submitted as an electronic ruling request, was forwarded to this office from the National Commodity Specialist Division for response. You have asked that certain information submitted in connection with this request be treated as confidential. Inasmuch as this request conforms to the requirements of 19 C.F.R. § 177.2(b)(7), the request for confidentiality is approved. The information designated as confidential in your request and contained within brackets in the ruling will not be released to the public and will be withheld from published versions of this ruling. FACTS: According to your submission, your request relates to various propylene elastomers that will be produced in China, Taiwan or Mexico through a melting, mixing/blending and pelletizing operation from almost exclusively Japanese origin raw materials. The principal material involved in the processing operation is a thermoplastic vulcanizate (TPV), which you state is considered a form of thermoplastic elastomer polymer. You explain that TPV is not a chemical, but rather is a form of thermoplastic for which a CAS number does not apply. As a common and commercial meaning of TPV, your submission references the following Wikipedia entry: TPV are part of the thermoplastic elastomer (TPE) family of polymers, but are closest in elastomeric properties to EPDM thermoset rubber, combining the characteristics of vulcanized rubber with the processing properties of thermoplastics. TPV is a dynamically vulcanized alloy consisting mostly of fully cured EPDM rubber particles encapsulated in a polypropylene (PP) matrix. There are almost 100 grades in the S portfolio which are used globally in the automotive, household appliance, electrical, construction and healthcare markets. The name Santopreme was trademarked in 1977 by Monsanto and the trademark is now owned by ExxonMobil. Similar material is available from Elastron and others. You state that the proposed processing will be the same whether performed in China, Taiwan or Mexico. You describe the inputs as Japanese origin TPV, mineral oil of Japanese origin and light stabilizers, a mold release agent (magnesium stearate) and a colorant (titanium dioxide) of Chinese origin. You state that three slightly different compositions of TPV will be used, ranging from a low of 63.31% by final weight of TPV to a high of 63.82% by final weight of TPV. You identify TPV as the most-critical ingredient because it provides the base thermoplastic that is needed to form the finished propylene elastomer. You state that the second component, mineral oil, comprises an additional 35% by weight of the finished propylene elastomer and is used to establish viscosity to allow the combined materials to undergo the required melting, mixing/blending and pelletizing operation. Light stabilizers are added to protect the final product against degradation from UV radiation exposure. Magnesium stearate is added to facilitate consistent melting, mixing/blending and pelletizing. Finally, titanium dioxide is added to support the brightness of the resulting propylene elastomer. These inputs will be melted, mixed/blended and pelletized in China, Taiwan or Mexico to produce the finished propylene elastomer. In response to a request for additional information, you provided that the styrene butadiene copolymer, polypropylene, propylene copolymer, ethylene copolymer and mineral oil are sourced in Country A [X]. The remaining inputs – light stabilizers, magnesium stearate and titanium dioxide – are sourced in Country B [X]. You state that the processing begins with the initial melting of the base TPV before it is mixed/blended with the remaining inputs through an extrusion process. Once fully combined, the resulting blend is re-solidified and molded into a final, pelletized state. You note that neither the melting, mixing/blending nor the pelletizing results in a chemical reaction. Instead, these processes result in a physical change into a consistent, shelf-stable, pelletized product. You claim that the propylene elastomers produced offer a number of desirable properties, such as being lightweight, heat resistant, elastic and temperature resistant. You describe possible uses of the propylene elastomers to include automotive moldings, seals and trims; automotive interior panels and covers; speaker edge dampers; toothbrush grips; architectural gaskets; and drainpipe joints and hoses. In the instant case, the propylene elastomer pellets will be converted into the “skin” of an automotive dashboard through an injection mold process following importation to the United States. In your original submission, you assert that the proper classification of these propylene elastomers, imported into the United States is 3902.30.00, Harmonized Tariff Schedule of the United States (HTSUS) which provides for polymers of propylene or of other olefins, in primary forms: propylene copolymers. The general rate of duty will be 6.5 percent ad valorem. ISSUE: Whether the propylene elastomers are eligible for USMCA preferential tariff treatment and what the country of origin is for marking purposes. LAW & ANALYSIS: Country of Origin Marking 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; ….” The test for determining whether a substantial transformation has occurred is whether an article emerges from a process with a new name, character, or use, different from that possessed by the articles prior to processing. See Texas Instruments Inc. v. United States, 69 C.C.P.A. 151 (1982). 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). In Nat’l Hand Tool, 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

Country of Origin MarkingSection 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; ….” The test for determining whether a substantial transformation has occurred is whether an article emerges from a process with a new name, character, or use, different from that possessed by the articles prior to processing. See Texas Instruments Inc. v. United States, 69 C.C.P.A. 151 (1982). 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). In Nat’l Hand Tool, 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