The country of origin of upright vacuum cleaners

N311063 April 21, 2020 MAR-2 OT: RR: NC: N4:410 CATEGORY: Country of Origin Ms. Lauren Wyszomierski White & Case LLP 701 13th Street NW, Suite 600 Washington, DC 20005 RE: The country of origin of upright vacuum cleaners Dear Ms. Wyszomierski: This is in response to your letter dated April 3, 2020, on behalf of your client Midea American Corporation, requesting a country of origin determination for vacuum cleaners. The merchandise under consideration is identified as the “vacuum cleaner the NEC18 Series.” You indicate in the letter that the NEC18 Series includes two related models subject to this ruling request. The NEC18 Series models are cordless, bagless, battery-powered, “stick” vacuum cleaners designed for household use. The vacuum’s power is 150W, and its dust cup capacity is 0.7L. The vacuum cleaners are packaged for sale to individual consumers to be used as an upright vacuum. Each unit is sold in a single package together with its corresponding accessories. You present a manufacturing processing scenario for the entire NEC18 Series for the country of origin determination. Under the scenario, the product’s components and parts are sourced from China and Malaysia and its final processing occurs in Malaysia. The NEC18 Series is made from over roughly 70 components and parts. Approximately 42% (by unit cost) of the components and parts used to produce the NEC18 Series vacuum cleaners are sourced from Malaysia. Other components, parts or sub-assemblies, such as motors and their accessories, crevice tools, buttons, metal tubes, brushes, LED lights, foot assembly, etc., are imported from China. The manufacturing process consists of both the production of two of the unit’s key sub-assemblies, the dust cup sub-assembly, the handle sub-assembly, and the unit’s final assembly in Malaysia. The provided step-by-step production descriptions with panoramic images show that the assembly processes of dust cup sub-assembly and the handle sub-assembly involve eight and six distinct steps, respectively. The processes assemble the components and parts into various sub-assemblies for the final assembly operation. The final assembly combines the parts and sub-assemblies, in which the components and sub-assemblies are sent to the main assembly line for production of the finished vacuum cleaners. This operation consists of 27 distinct and complex steps, of which each step is carried out by a different worker. A series of successive quality control tests are performed before the packaging and packing. You further stress that the workers involved in the production of the vacuum cleaners in Malaysia include electricians, product engineers, test engineers and individuals who are specially trained to ensure the product’s quality and specifications. 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”. In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. The country of origin of the item’s components, extent of the processing that occurs within a country, and whether such processing renders a product with a new name, character, and use are primary considerations in such cases. Additionally, factors such as the resources expended on product design and development, the extent and nature of post-assembly inspection and testing procedures, and worker skill required during the actual manufacturing process will be considered when determining whether a substantial transformation has occurred. No one factor is determinative. Based on the information submitted, the components and parts (e.g., motors, crevice tools, buttons, metal tubes, brushes, LED lights, etc.,) are imported into Malaysia where they are manufactured into different subassemblies, which are ultimately assembled into the subject NEC18 Series vacuum cleaners. We find that the processing performed in Malaysia with respect to the NEC18 Series vacuum cleaners in the scenario does constitute a substantial transformation of the imported components and parts into "products of" Malaysia. The manufacturing process in Malaysia transforms the Chinese originating components and parts to produce the finished vacuum cleaners. It creates a new and different article of commerce with a distinct character and use that is not inherent in the components imported into Malaysia. Therefore, the "product of" requirement has been satisfied. It is of the opinion of this office that the country of origin for the vacuum cleaners will be Malaysia. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 177). 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 Michael Chen at [email protected]. Sincerely, Steven A. Mack Director National Commodity Specialist Division