Country of Origin of Automobile Wire Harnesses

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• HQ H
• Sep 11,

• Type : ORIGIN • HTSUS :

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Mike Kim
K&G Customs Service Inc.
Buford Highway, Suite 300
Norcross, Georgia

RE: Country of Origin of Automobile Wire Harnesses

Dear Mr. Kim:

This is in response to your electronic request submitted on October 22, , for a binding ruling on behalf of SL Alabama, LLC regarding the country of origin of automobile wire harnesses. The National Commodity Specialist Division forwarded your ruling request to Regulations and Rulings in Customs Border Protection (CBP) Headquarters for a response.

FACTS:

The two products that are the subject of this ruling are wire harnesses used in the production of automobiles. The two products have been identified as ADA- and UMA-. The wire harness are used for automotive lighting systems. These wire harnesses attach the front headlights of an automobile to its rear taillights so that power can be transferred between these two automotive lighting systems when necessary. Both of the wire harnesses are assembled together in China with parts of South Korean origin. All of the South Korean materials are sent to China for assembly into the finished wire harness. For ADA-, the South Korean origin parts are as follows: insulated wire, connectors, socket holders terminal, bulbs, wire guide, and wire seal. The only Chinese origin component in the ADA- wire harness is a grommet.

For the UMA- wire harness, all the parts assembled to make the product are of South Korean origin. The specific parts used in the production of this type of automotive wire harness are insulated wire, brackets, grommets, housings, terminals, seals, wire holders, and retainers. No Chinese made materials are included in the assembly of the product.

The manufacturing process is the same for both types of wire harnesses. The insulated wire is cut to length. After the cutting, the wire is then sealed, crimped and bunched together. Next, the wires are then attached to a connector in place. The wire is installed into the connector housing and attached with the retainer clips to secure it. The harnesses are then taped and tied together to complete the finished article. The completed wire harnesses are shipped from China to the United States.

ISSUE:

What is the country of origin of the two subject wire harnesses for 19 U.S.C. and Section 301 purposes?

LAW AND ANALYSIS:

Section 304 of the Tariff Act of , as amended (19 U.S.C. § ), provides that, unless excepted, 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 a manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article. By enacting 19 U.S.C. § , Congress intended to ensure &#;that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that 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, 302 ().

The country of origin marking requirements and the exceptions of 19 U.S.C. § are set forth in Part 134, Customs and Border Protection (CBP) Regulations (19 C.F.R. Part 134). Section 134.1(b), CBP 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&#; within the meaning of the marking laws and regulations. A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, or use which differs from the original material subjected to the process. United States v. GibsonThomsen Co., 27 C.C.P.A. 267 (C.A.D. 98) ().

When determining the country of origin for purposes of applying current 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 possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 69 C.C.P.A. 151, 681 F.2d 778, 782 (). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (), aff&#;d, 989 F.2d (Fed. Cir. ). In determining whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. Id. at . Assembly operations that are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. 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, or 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 may be considered when determining whether a substantial transformation has occurred. No one factor is determinative. CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis.

The Court of International Trade (&#;CIT&#;) has applied the &#;essence test&#; to determine whether the identity of an article is changed through assembly or processing. For example, in Uniroyal, Inc. v. United States, 3 C.I.T. 220, 225 (), aff&#;d, 702 F.2d (Fed. Cir. ), the court held that imported shoe uppers added to an outer sole in the United States were the &#;very essence of the finished shoe&#; and thus were not substantially transformed into a product of the United States. Further, the court noted that the attachment of the outsole to the upper was a minor manufacturing or combining process which left the identity of the upper intact.

In Energizer Battery, Inc. v. United States, 190 F. Supp. 3d (), the CIT found that articles imported in a pre-fabricated form with a predetermined use are not substantially transformed by assembly into the final product, without more. In Energizer, the CIT interpreted the meaning of the term &#;substantial transformation&#; as used in the Trade Agreements Act of (&#;TAA&#;) for purposes of government procurement. Energizer involved the determination of the country of origin of a flashlight, referred to as the Generation II flashlight, under the TAA. All of the components of the Generation II flashlight were of Chinese origin, except for a white LED and a hydrogen getter. The components were imported into the United States where they were assembled into the finished Generation II flashlight. In reaching its decision in Energizer, the court expressed the question as one of whether the imported components retained their names after they were assembled into the finished Generation II flashlights. The court found &#;[t]he constitutive components of the Generation II flashlight do not lose their individual names as a result [of] the post-importation assembly.&#; The court also found that the components had a predetermined end-use as parts and components of a Generation II flashlight at the time of importation and did not undergo a change in use due to the post-importation assembly process. Finally, the court did not find the assembly process to be sufficiently complex as to constitute a substantial transformation. Thus, the court found that Energizer&#;s imported components did not undergo a change in name, character, or use as a result of the post-importation assembly of the components into a finished Generation II flashlight. Virtually all of the components of the military Generation II flashlight, including the most important component, the LED, were of Chinese origin. Thus, the court determined that China was the correct country of origin of the finished Generation II flashlights for purposes of government procurement.

In accordance with these principles, CBP has ruled in a number of different cases, where parts of a product were imported from one or more countries, fully assembled in another country, and were not deemed to have substantially transformed in the country of assembly because the manufacturing process was minimal and simple. For example, in C.S.D. 80-111, dated September 24, , CBP ruled that the U.S. assembly of a fan with imported components did not constitute a substantial transformation. The ceiling fan motors were assembled in a 20-step assembly line procedure and the fan blades in 5-step procedure. CBP found that the fans did not undergo substantial transformation in the United States because the manufacturing processes of the fans consisted of &#;basically assembly line procedures&#; that did not require large amounts of skilled labor or specialized equipment. Also, in HQ H, dated November 6, , CBP found that an electric motor made from components of China and assembled in Mexico was a product of China because the production process consisted of simple assembly. CBP stated that &#;the foreign subassemblies had a pre-determined end-use and did not undergo a change in use due to the assembly process in Mexico. Based on the information provided, the production process performed in Mexico is mere simple assembly and the foreign subassemblies are not substantially transformed.&#;

Similarly, in HQ H, dated August 2, , CBP found that final assembly in the United States of remanufactured cartridge subassemblies of various origins, imported in a pre-fabricated form with restored functionality, did not result in a substantial transformation. In HQ H, empty toner cartridges of various origins were collected, and sent to a foreign country where damaged parts were removed. After being rebuilt with a clean blade, roller and gears, the developer section was temporarily assembled with the rebuilt waste hopper and a &#;host&#; toner section, which was used repeatedly for testing purposes only. The temporarily assembled unit was tested, and then the main sub-assembly components (the developer section, the toner hopper, and the waste hopper) were shipped to the United States, where they were reassembled, filled with toner and retested. CBP found that, even when the toner was of U.S. origin, the U.S.-operations were not complex enough to result in a substantial transformation of the sub-assemblies of various origin because the sub-assemblies, while not fully functional at the time of import, were essentially made functional again at the foreign facility.

In the instant case, we find that the assembly of the two types of automotive wire harnesses under consideration is not complex, and the South Korean-origin components are not substantially transformed in China. We note that all of the components used in the production of the wire harness, ADA-, is of South Korean origin, except for one part, the grommet, which is made in China. For the other wire harness under consideration, UMA-, all the parts are of South Korean origin. While the manufacturing of the wire harnesses involves several steps, the processing is not complicated. It consists of simple cutting of wires to length, and then sealing, crimping and bunching these wires together. In addition, the various components are attached to a connector to put them in place. The wire is installed into the connector housing and attached by the retainer clips to secure it. Finally, the harnesses are then taped and tied together. These assembly operations of the wire with the other various items of the wire harnesses do not involve either complex processing or highly skilled labor, as the insulated wire and the other components are imported into China in a state ready for assembly into the finished products. In other words, when they are sent from South Korea to China, the South Korean origin components have a pre-determined use for the production of the wire harnesses, and they are not changed when they are used in the manufacturing of the automotive wire harnesses in China. Therefore, the South Korean-origin components are not substantially transformed when they are used in the manufacture and the automobile wire harness in China, and thus, we find the country of origin of the two automobile wire harnesses under consideration is South Korea.

HOLDING:

Based on the information provided, the country of origin of the two subject automotive wire harnesses, ADA- and UMA-, for the marking requirements of 19 U.S.C. and the trade remedies under Section 301 purposes is South Korea.

Please note that 19 C.F.R. § 177.9(b)(1) provides that &#;[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a CBP field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.&#;

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.

Sincerely,

Monika R. Brenner, Chief                             Valuation and Special Programs Branch

HongHao offers a maintenance contract, which costs you a flat-rate sum to cover maintenance and relevant issues, to ensure that your machines receive the optimal level of care after the end of the ONE-YEAR guarantee, including

On-site installation

Regular, preventative over-the- service

Corrective maintenance

Routine Maintenance

HongHao will attend the job site to do the maintenance regularly as long as the customer bears all the relative expense including labor, travel tickets, and all spare parts, etc.. Or the customer may send his engineers or operators to accept training at the workshops of HongHao at his own cost.

24 Hours Emergency Response Services:

HongHao will provide a 24-hour emergency service in the event that the equipment cannot operate properly by means of , call, video, etc.. If necessary, HongHao will send engineers to shoot the trouble for the customers at site at customer&#;s cost.

Additional Maintenance Requested by Customers:

HongHao shall not, unless specifically requested in writing by, and at the expense of the customer, carry out any statutory safety tests and structural or other alterations, increase new attachments, or make any parts replacements with a different design after the commencement of this Agreement;

HongHao shall not carry out repairs, renewals or replacements by reasons of nature disaster or force majeure.

General Provisions:

HongHao reserves the right to charge, on a time and materials basis, for any additional work over and above the service package.

HongHao reserves the right to re-price this service if the customer does not schedule and provide for subsequent delivery within 30 days of purchase.

HongHao&#;s ability to deliver this service is dependent upon the customer&#;s full and timely cooperation with HongHao, as well as the accuracy and completeness of any information and data the customer provides to HongHao.

Activities such as, but not limited to, the following are excluded from this service:

Service deployment on machine hardware not covered by HongHao warranty or service maintenance contract.

Service deployment on machine hardware covered by a third-party maintenance contract.

Services that, in the opinion of HongHao, are required due to unauthorized attempts by Non-HongHao personnel to install, repair, maintain, or modify machine hardware or software, etc..

Any service not clearly specified in this document.

Site Discipline:

If you are looking for more details, kindly visit china processing wire harness manufacturers.

The site representative of HongHao must contact relevant personnel of the customer company in the event he reaches the site, or leaves the site during or after completion of the installation service, and shall not leave the site without authorization.

The site supervisor of HongHao conducts construction on the site on behalf of the customer, and shall maintain desirable and cooperative relations with the customer.

The site supervisor and construction personnel of HongHao shall not engage in any activities that are not relevant to the project while or on the installation site.

HongHao shall maintain sanitary conditions in the workshop as required by the customer, and shall not damage the property of the customer, otherwise HongHao shall be fully responsible for any losses caused due to violation of the aforesaid conditions.

Insurance and Safety:

HongHao shall buy sufficient commercial insurance(such as contractor&#;s all-risk insurance, and third-party insurance, etc) for the installation service undertaken by itself, and HongHao shall be responsible for buying personal commercial insurance(such as employee liability insurance and personal accident insurance, etc.) of a certain amount for all the employees of HongHao that participate in the service.

HongHao shall maintain all the aforesaid insurance coverage until final completion of the service.

HongHao&#;s safety representative shall submit written or oral work progress report, including the number of personnel on the site, and any positive or negative influence on environmental protection, health and safety on the construction site.

In case of accidents involving the employees appointed by HongHao or personnel or property of the customer, the project manager of the customer shall submit a brief accident report within 24 hours and a more detailed report within 72 hours thereafter.

In case of accident or personal injury, all work shall be suspended immediately. HongHao&#;s installation staff shall seek assistance immediately while taking care of the injured personnel.

Customer Responsibilities:

Contact one of our service specialist within 30 days of date of purchase to schedule the delivery of the service.

Ensure that all service prerequisites as identified in the service eligibility section have been met.

Unpack and place the machine in the right location where the installation service will take place.

Provide necessary technical data, materials(such as wire and terminal samples for testing) required for installation.

Determine and correct the installation inspection criteria, and conduct delivery inspection for the installation completed by HongHao.

Assign a designated person from the customer&#;s staff who, on behalf of the customer, will assist our technical specialist in facilitating the delivery of this service.

Adhere to licensing terms and conditions regarding the use of any of our service tools to facilitate the delivery of this service, if applicable.

Be responsible for all data backup and restore operations.

Provide a suitable work area for delivery of the service, including access to network connection, power supply, air compressor,etc.

Grant HongHao staff full and unrestricted access to all locations where the service is to be performed.

HongHao Statements

Without HongHao&#;s consent, such consent not to be unreasonably withheld, the customer shall not direct or permit any third party to repair, alteration, replacement or any interference with any of the equipment.

Without HongHao&#;s permission, the customer&#;s spare parts are not able to be transferred or resold to a third party.

For More Information:

For more information on HongHao service, please contact any of our worldwide sales offices.

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