N322385

N322385 November 19, 2021 CLA-2 OT:RR:NC:N1:102 CATEGORY: Origin Elizabeth Merritt A.N. Deringer 173 West Service Road Champlain, New York 12919 RE: The country of origin of a ball bearing for the purpose of 301 Trade Remedies Dear Ms. Merritt: In your letter dated October 22, 2021, you requested a ruling on the country of origin of a ball bearing for the purpose of 301 Trade Remedies, on behalf of your client, CW Bearing USA, Inc. A description of the assembly process was submitted for our review. The article under consideration is referred to as a single row deep groove ball bearing. The bearing supports radial and axial loads, and can be used in various applications, to include automotive products, air compressor pumps, electric motors, power tools, gearboxes, etc. The radial bearing consists of inner and outer races, two seals, two retainer cages, and a single row of steel balls. The outside diameter of the ball bearing measures 32 millimeters. In your submission, you suggest that the ball bearing is classified under subheading 8482.10.5048, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Ball or roller bearings, and parts thereof; Ball bearings; Other: Radial Ball Bearings; Single row Bearings; Other bearings have an outside diameter of Over 30 mm but not over 52 mm. We agree. The applicable subheading for the ball bearing will be 8482.10.5048, HTSUS, which provides for Ball or roller bearings, and parts thereof; Ball bearings; Other: Radial Ball Bearings; Single row Bearings; Other bearings have an outside diameter of Over 30 mm but not over 52 mm. The general rate of duty is 9 percent ad valorem. In your letter, you describe a country of origin scenario in which the ball bearing is assembled in Mexico. Prior to the assembly process, the rings that are intended to become the inner and outer races are purchased in China. In China, the rings are subjected to cleaning, heat-treating/quenching, tempering, polishing, final grinding and honing processes to become the inner and outer races of the bearing. In Mexico, the inner and outer races undergo an inspection and are then subjected to an initial cleaning. Afterwards, the races are immersed in cleaning fluid, pressure-washed and then inspected. The races are then measured and their specifications are verified. Balls from either Mexico or the U.S. are tested and inspected, and then paired to the respective inner and outer races. Afterwards, the Chinese inner and outer races, balls, and the Chinese retaining cages are positioned and pressed into place. As the various processes are taking place, the components are measured, and inspected. The semi-completed ball bearing then undergoes a pressure washing, a final washing, fluid removal, a grease-filling, and a sealing process. Upon undergoing subsequent tests and inspections, the ball bearing is laser marked and then coated. With regard to your request for the appropriate country of origin of the ball bearing, 19 C.F.R. § 134.1(b) provides in pertinent part 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. As stated in HQ 735009, dated July 30, 1993, “The country of origin is the country where the article last underwent a ‘substantial transformation,’ that is, processing which results in a change in the article's name, character, or use.” The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character, and 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). 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 order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, all factors such as the components used to create the product and manufacturing processes that these components undergo are considered in order to determine whether a product with a new name, character, and use has been produced. No one factor is decisive, and assembly operations that are minimal will generally not result in a substantial transformation. In the subject scenario, the assembly of the inner and outer races, the retaining cages, and balls in Mexico would not entail the type of processing required to meet the substantial transformation test. The assembly of the ball bearings is considered simple assembly, and the Chinese components are not “substantially transformed” by the assembly operations that occur in Mexico. Instead, the country of origin of the races, which are the essence of a ball bearing, are considered when determining the country of origin of the ball bearing for the purpose of applying 301 trade remedies. In this instance, the inner and outer races are formed by subjecting rings to surface grinding and honing processes in China. Headquarters (HQ) ruling 562528, dated December 10, 2002, discusses the country of origin of a ball bearing, and states that the fundamental character and use of the bearings is determined after the steel rings are ground and finished into races with precision raceways and they are no longer considered steel rings. This rationale is also discussed in HQ rulings 731968, March 19, 1990, and 731969, dated March 19, 1990, where rings are heat treated in one country and the grinding and honing processes occur in the second country. In these rulings, the country of origin of the bearings was determined to be the country in which the rings become races with precision raceways. Here, the rings of the ball bearing become inner and outer races with precision raceways for anti-friction ball bearings in China, as the surface grinding and honing processes occur in China. Accordingly, the country of origin of the ball bearing for the purposes of 301 trade remedies is China. As such, the subject ball bearing is subject to the Section 301 trade remedies. Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8482.10.5048, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.01, in addition to subheading 8482.10.5048, HTSUS, listed above. The HTSUS is subject to periodic amendment, so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, including information on exclusions and their effective dates, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china respectively. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. Part 177). The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not

set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request.  This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1).  This section states that a ruling letter is issued on the assumption that all the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect.  In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2.  You should also be aware that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Sandra Martinez at Sandra.Martinez@cbp.dhs.gov.Sincerely,Steven A. MackDirectorNational Commodity Specialist Division