H335139

 HQ H335139 May 1, 2024 OT:RR:CTF:VSP H335139 RRB CATEGORY: Origin Matthew D. Lapin Porter Wright Morris & Arthur LLP 2020 K Street, NW Suite 600 Washington, D.D. 20006 RE: Modification of NY N326445; Country of origin of an Absorber Crashbox Dear Mr. Lapin: This is in response to your submission, dated July 29, 2022, requesting U.S. Customs and Border Protection (“CBP”) to reconsider New York Ruling Letter (“NY”) N326445, dated June 30, 2022, which was issued to your client Waldasschaff Automotive Mexico S de R.L. de C.V. (“WAM” or “importer”). NY N326445 addressed the classification, trade preference under the United States-Mexico-Canada Agreement (“USMCA”), and the country of origin of an Absorber Crashbox. In NY N326445, CBP found that the country of origin of the Absorber Crashbox will be China for purposes of applying trade remedies under Section 301 of the Trade Act of 1974, as amended. After reviewing the ruling in its entirety, along with the information in your reconsideration request, we find it to be incorrect only with respect to the country of origin of the Absorber Crashbox for purposes of applying Section 301 trade remedies. For the reasons set forth below, we are modifying NY N326445. Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. §1625(c)(1)), as amended by section 623 of Title VI, notice proposing to modify NY N326445 was published on March 27, 2024, in Volume 58, No. 12 of the Customs Bulletin. No comments were received in response to the proposed action. FACTS: In NY N326445, the Absorber Crashbox was described as follows: The item under consideration is an Absorber Crashbox (Crashbox, crash box), which is designed to be used with passenger vehicles. The crash box is an important component designed exclusively to absorb energy in the event of a collision. It prevents the spread of kinetic energy, generating less damage to the vehicle structure. It is placed between the bumper and side rails before the chassis points. You state in your letter that the Crashboxes are manufactured and assembled in Mexico with certain imported components from China. These imported parts are referred to as “profiles”, Part Number V1570 and Part Number V1571. There are two model profiles, each consisting of two pieces. One pair is for the left hand Crashbox and one set for the right hand Crashbox. The Crashboxes are manufactured in Mexico using these profiles imported from China with Mexican labor. The imported profiles are considered a raw material and are subject to various processes in WAM’s plant in Mexico including sawing, stamping, washing and heat treatment until the good is finished. NY N326445 further states: [a]ccording to the information supplied, none of the components from China undergo any substantial processing. The end-use of all components from China is pre-determined at the time of importation to Mexico. The assembly of the components into the Absorber Crashbox appears to be a minor one, and therefore, does not meet the substantial transformation requirements. As a result, it is the opinion of this office that no substantial transformation occurs in Mexico. Therefore, the country of origin of the Absorber Crashbox will be China for purposes of applying trade remedies under Section 301, of the Trade Act of 1974, as amended. In its reconsideration request, the importer explains that the heat treatment applied to the profiles is more than a minor operation. The importer states that the heat treatment process changes the properties of the metal in the profiles in order to permit the crashboxes to meet the requirements of the Federal Motor Vehicle Safety Standards (“FMVSS”). In particular, the heat treatment process subjects the sawed, cut, formed and hole-punched profiles to a specified high temperature for a set amount of time under controlled environmental conditions, using precision measuring and test equipment. This process changes the structural properties of the aluminum used to construct the raw profiles. Items that do not meet specific parameters regarding tensile strength, yield strength and elongation are removed from processing and are not incorporated into final assembly. The importer asserts that the heat treatment and artificial aging process in Mexico transforms the aluminum components from the imported “T4” component into the “T6” component that can be incorporated into the final assembly of the crashboxes. Moreover, the transformation of the aluminum components into “T6” components renders them with substantially higher strength and hardness compared to the “T4” components form China. This processing leads to an improvement in the material’s mechanical properties, including its strength, hardness, and ductility. The importer explains that these changes to the physical properties of the aluminum are required to effectively absorb energy in a crashbox in the event of a collision and to ensure that the passenger vehicles upon which the crashboxes are installed meet requirements for occupant safety under the FMVSS. In an email dated August 11, 2023, Counsel for WAM sent to our office photographs of the incoming materials that are sent to Mexico, along with photographs of what happens to these materials at various stages of production of the Absorber Crashboxes in Mexico. ISSUE: What is the country of origin of an Absorber Crashbox manufactured and assembled in Mexico, using certain imported components from China, for purposes of applying of Section 301 trade remedies? LAW AND ANALYSIS: Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that, unless excepted, every article of foreign origin imported into the United Statess shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit in such a 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 enacting 19 U.S.C. § 1304 was that the ultimate purchaser should be able to know by an inspection of the markings on the imported goods the country of which the good is the product. “The evident purpose is to mark the goods so 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 at 302 (1940). The regulations implementing the requirements and exceptions to 19 U.S.C. § 1304 are set forth in Part 134, Customs and Border Protection Regulations (19 C.F.R. Part 134). 19 C.F.R. § 134.1(b) provides as follows: “Country of origin” means 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; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin. 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(f), HTSUS. Among the subheadings listed in U.S. Note 20(f) of Subchapter III, Chapter 99, HTSUS, is subheading 8708.10.60, HTSUS, in which the finished Absorber Crashboxes are classified. When determining the country of origin for purposes of applying 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 poss

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that, unless excepted, every article of foreign origin imported into the United Statess shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit in such a 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 enacting 19 U.S.C. § 1304 was that the ultimate purchaser should be able to know by an inspection of the markings on the imported goods the country of which the good is the product. “The evident purpose is to mark the goods so 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 at 302 (1940).The regulations implementing the requirements and exceptions to 19 U.S.C. § 1304 are set forth in Part 134, Customs and Border Protection Regulations (19 C.F.R. Part 134).19 C.F.R. § 134.1(b) provides as follows:“Country of origin” means 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; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin. 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(f), HTSUS. Among the subheadings listed in U.S. Not