The country of origin of bit sockets

N345261 January 31, 2025 OT:RR:NC:N1:118 CATEGORY: Origin M Jason Cunningham Sonnenberg & Cunningham PA 780 Fifth Ave South, Suite 200Naples, FL 34102 RE:  The country of origin of bit sockets Dear Mr. Cunningham: In your letter dated January 20, 2025, on behalf of your client, Great Star Industrial USA, LLC, you requested a country-of-origin determination on bit sockets for purposes of Section 301 duties.  Pictures of the tools in different stages of manufacture were included with your submission, along with a detailed narrative of the manufacturing process. The subject articles are the same bit socket but produced under two different production scenarios.  A bit socket is comprised of a bit holder socket with a press-fit bit. One end of the bit socket has a permanently attached Torx screw bit that fits into a screw head.  The other end of the bit socket has a 3/8” square hole. This end allows the bit socket to be attached for turning or torquing the screw to the 3/8” square driver of a screwdriver handle, ratchet handle, or power (electric or pneumatic) drill.  You have stated that users are not able to change the bit. The bit is pressed into the socket with force that prevents removal by users. The subject bit sockets are designed for mechanics, who may need to provide more torque on a job, such as on screws found inside an automobile’s engine compartment. You have stated that the bit sockets will be produced in Vietnam and China, and you propose the following two production scenarios: Production Scenario One: In Vietnam, raw steel coils are molded into the socket blank with the 3/8” square hole on one end and the standard hexagonal end to receive the bit on the other end. Also in Vietnam, raw hexagonal bar is used to make a bit through processes of cutting, shaping and stamping that are completed in a CNC lathe machine.  The fully formed bit is then heat-treated and coated.  The socket blank and bit are sent to China where the exterior of the bit end of the socket blank is machined to make it thinner, and two grooves are machined into the exterior to make it less likely to slip from a user’s hand.  It is then heat treated, coated, and assembled with the Vietnamese origin bit by pressing the two pieces together. Production Scenario Two: Raw steel coil is molded into the bit in Vietnam where raw hexagonal bar is used to make the bit through processes of cutting, shaping and stamping that are completed in a CNC lathe machine. The bit is fully formed and has a head for turning a particular type of screw, i.e., a Torx screw.  The finished bit is sent to China.  In China, raw steel coil is molded in a socket blank with the 3/8” square hole on one end and the standard hexagonal end to receive the bit on the other end.  The socket blank’s exterior of the bit end is machined to make it thinner, and two grooves are machined into the exterior to make it less likely to slip from a user’s hand.  It is then heat treated, coated, and assembled with the Vietnamese origin bit by pressing the two pieces together. When determining the country of origin for purposes of applying current trade remedies under Section 301, the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling Letter (“HQ”) H301619, dated November 6, 2018. 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, 681 F.2d 778 (C.C.P.A. 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). Our office notes that in the case of the bit sockets, the tool is comprised of two main components, i.e., a bit holder socket and a Torx screw bit.  The bit holder socket allows for attachment to a handle or power tool for more torque.  In this particular case, we view that as an extension of the function and force of the Torx bit head.  The permanent attachment of the bit allows professional users to apply more force than a replaceable screw bit in a standard socket could apply.  The bit is more durable because of this, as well.  It is therefore our opinion that the processing of the raw hexagonal bar into a fully formed Torx screw bit in Vietnam, provides the essential characteristic of the finished bit sockets.  Accordingly, the county of origin for the finished bit sockets in both production scenarios is Vietnam for the purpose of Section 301 Trade Remedies. 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 of 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. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP. This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection Regulations (19 C.F.R. 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, please contact National Import Specialist Anthony Grossi at [email protected]. Sincerely, Steven A. Mack Director National Commodity Specialist Division