[Federal Register: February 13, 2003 (Volume 68, Number 30)]
[Notices]
[Page 7407-7409]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13fe03-82]
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DEPARTMENT OF THE TREASURY
Customs Service
Notice of Issuance of Final Determination Concerning Bowling
Pinsetters
AGENCY: Customs Service, Department of the Treasury.
ACTION: Notice of final determination.
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SUMMARY: This document provides notice that Customs has issued a final
determination concerning the country of origin of certain bowling
pinsetters which are installed at military facilities in the United
States and which will be offered to the United States Government. The
final determination found that based upon the facts presented, the
country of origin of the bowling pinsetters is the United States.
DATES: The final determination was issued on February 7, 2003. A copy
of the final determination is attached. Any party-at-interest, as
defined in 19 CFR 177.22(d), may seek judicial review of this final
determination within 30 days of February 13, 2003.
FOR FURTHER INFORMATION CONTACT: Karen S. Greene, Special
Classification and Marking Branch, Office of Regulations and Rulings
(202-572-8838).
SUPPLEMENTARY INFORMATION: Notice is hereby given that on February 7,
2003, pursuant to subpart B of part 177, Customs Regulations (19 CFR
part 177, subpart B), Customs issued a final determination concerning
the country of origin of certain bowling pinsetters offered to the
United States Government. The U.S. Customs ruling number is HQ 562583.
This final determination was issued at the request of Brunswick
Corporation, under procedures set forth at 19 CFR part 177, subpart B,
which implements Title III of the Trade Agreements Act of 1979, as
amended (19 U.S.C. 2511-18). The final determination concluded that,
based upon the facts presented, the assembly in the United States of
numerous foreign and U.S. subassemblies and parts to create the
pinsetters and the installation of the pinsetters in facilities in the
United States result in a substantial transformation of the foreign
subassemblies. Accordingly, the country of origin of the bowling
pinsetters is the United States.
Section 177.29, Customs Regulations (19 CFR 177.29), provides that
notice of final determinations shall be published in the Federal
Register within 60 days of the date the final determination is issued.
Section 177.30, Customs Regulations (19 CFR 177.30), states that any
party-at-interest, as defined in 19 CFR 177.22(d), may seek judicial
review of a final determination within 30 days of publication of such
determination in the Federal Register.
Any party-at-interest, as defined in 19 CFR 177.22(d), may seek
judicial review of this final determination within 30 days of (date of
publication in the Federal Register).
Dated: February 7, 2003.
Michael T. Schmitz,
Assistant Commissioner, Office of Regulations and Rulings.
Attachment.
HQ 562583
MAR-05 RR:CR:SM 562583 KSG
February 7, 2003.
Category: Marking
Richard M. Belanger, Esq.,
Sidley Austin Brown & Wood LLP, 1501 K Street, NW., Washington, DC
20005.
Re: Country of origin of bowling pinsetters; substantial
transformation; 19 CFR 177.22; procurement.
Dear Mr. Belanger: This is in response to your letters dated
November 18, 2002, and January 17, 2003, on behalf of Brunswick
Corporation, requesting a final determination of origin pursuant to
19 CFR 177.22(c) regarding U.S. Government procurement of certain
bowling pinsetters assembled in the United States.
Facts
Brunswick Corporation is the importer of the components of the
bowling pinsetters and therefore, is a party-in-interest as defined
in 19 CFR 177.22(d).
This case involves the GS-X model of bowling pinsetters, which
are automated machines designed to return bowling balls, pick up
standing bowling pins and clear the deck at bowling facilities. The
pinsetters are sold to military installations and other U.S.
Government entities. This request involves a contract for
installation of the GS-X pinsetters at bowling alleys located inside
the United States. Brunswick anticipates that it will enter into
contracts in the future for facilities at U.S. military bases in
foreign countries as well as in the United States.
The GS-X pinsetter is typically sold in sets of two mechanical
subassemblies and one electrical controller assembly plus other
parts, although Brunswick may occasionally sell a single mechanical
assembly with an attached electrical controller. The electrical
assembly is manufactured in the United States by Controls, Inc., an
unrelated company.
The mechanical assemblies are comprised of seven subassemblies
consisting of thousands of components from numerous countries. The
mechanical assemblies consist of three major parts: (1) The central
block; (2) the ``six-pack''; and (3) the ball accelerator. The
central block is a large steel box that contains four subassemblies:
the sweep wagon subassembly; the setting table subassembly; the
drive frame sub-assembly; and the distributor subassemblies.
Included in the drive frame subassembly are three
[[Page 7408]]
motors, including the distributor motor, the sweep motor and the
table motor. The distributor subassembly, which resembles a conveyor
belt assembly line, takes the pins from the pin elevator subassembly
and places them in the setting table subassembly. The setting table
subassembly picks up the standing pins from the lane and takes them
again from the distributor subassembly before setting them down on
the lane. Between the time when the setting table picks up the
standing pins and sets them down again, the sweep wagon subassembly
sweeps away felled pins. The drive frame subassembly houses three of
the motors that are needed to run the central block and six-pack.
The six-pack assembly contains the pin elevator subassembly with
two pin elevators and the ball pit subassembly with two ball
cushions and two rollers. The pin elevator subassembly receives the
pins from the ball pit subassembly and raises them into the
distributor subassembly. The ball pit subassembly handles the
initial impact of the pins and ball and cycles them through the
pinsetter to get ready for the next ball.
The ball accelerator includes the ball accelerator motor. The
ball accelerator subassembly returns the ball to the bowler.
In addition to the above-described mechanical subassemblies, the
complete pinsetter, as installed, contains the U.S.-origin
electrical controller assembly as well as other U.S. parts.
In foreign country X, Brunswick constructs the large steel frame
that houses the central block. Numerous other parts from various
countries are also shipped to foreign country X for assembly of the
seven principal subassemblies of the mechanical assembly. Brunswick
then attaches the distributor subassembly to the steel casing of the
central block. The six remaining subassemblies and the central block
casing are then shipped to a manufacturing facility in Muskegon,
Michigan.
I. Processing Performed at Michigan Plant
In the United States (Muskegon, Michigan), Brunswick integrates
the sweep wagon and setting table subassemblies, as well as the
three motors of the drive frame subassembly, into the central block.
The integration of the sweep wagon mechanical subassembly
involves installing it into the central block in a front orientation
at a 45 degree diagonal position, with the right end being placed
into the right sweep track first. Brunswick then adjusts the rollers
to a minimum clearance of five millimeters on each side between the
roller screw, taking care to ensure that adequate clearance is
maintained during the entire length of travel by manually running
the wagon forward and aft. Brunswick then attaches the sweep wagon
to the sweep crank arms with nylon bushings, large flat shim washers
and retaining rings. This procedure is then repeated on the opposite
side. Finally, Brunswick adjusts the clearance to an average of ten
millimeters between the gutter adapter and the flat gutter, with
slots and screws provided in both adapters. This final adjustment
must be made at the midpoint of wagon travel to allow the necessary
clearance at extreme front and rear positions.
Brunswick integrates the setting table mechanical subassembly
into the central block. This process involves the initial placement
of spacers onto the corners of the test stand deck. The assembly
team then delivers the setting table to the test stand deck and sets
it onto the spacers, ensuring that the spacers are clear of the
spotting tong attachment screws that protrude from the underside of
the setting table. Brunswick then manually turns the setting table
drive pulley on the left side of the drive frame to drop the left
and right deck racks to the lowest point. The deck rack teeth are
aligned to the drive gear teeth and plumb. Brunswick removes the hex
nuts and lock washers from the setting table studs and installs the
feet of the deck rack onto studs. Brunswick then rotates the bottom
hex nuts until the first interference is detected against the deck
rack feet. The top hardware is reinstalled and tightened. Brunswick
manually turns the setting table drive pulley in the opposite
direction to raise the setting table slightly so that the spacers
can be removed. The setting table is re-lowered to the lowest
position. Brunswick verifies that a 5 to 15 millimeter gap exists on
all points between the setting table frame and the deck of the test
stand. If proper clearance is not correct, or if the table frame is
not level, appropriate adjustments are made. The top sections are
then assembled for the telescoping square drive shafts for each of
the setting table pivot shafts, and the spotting tongs with hardware
are provided. Finally, Brunswick assembles and routes the setting
table function switch and solenoid cable into the panduit channel at
the front of the machine.
Brunswick integrates the distributor motor of the drive frame
subassembly into the central block. This involves the assembly and
placement of the motor pulley to the motor shaft. A 60 Hz sheave
must be facing away from the motor assembly. The motor and mount
assembly must first be placed into the forward motor location in the
left drive frame and then be assembled into the frame with bushing,
spacer and hitch pins. Brunswick then assembles the tension spring
from the mount to the frame. Brunswick assembles the V-belt to the
motor pulley and drive pulley.
The sweep motor of the drive frame subassembly is integrated
into the central block. This involves a process identical to the
assembly of the distributor motor described above except that the
assembly is located in the middle motor location of the drive frame.
The setting table step motor of the drive frame subassembly is
integrated into the central block. This involves a process identical
to the assembly of the distributor and sweep motors described above
except that the assembly is located in the rear motor location of
the drive frame.
After assembly of the three subassemblies into the central
block, the fully assembled central block is quality tested at the
Michigan facility. Each central block undergoes 400 cycles of
testing, which can take several hours.
Counsel states that the processing performed at the Michigan
facility requires complex and detail-oriented labor and precise
calibrations performed by highly skilled employees.
II. Processing Performed at Bowling Facility
At the bowling facility, the ball pit and pin elevator
subassemblies are joined to create the six-pack component of the
mechanical assembly. The central block, six-pack, and ball
accelerator are then assembled to form the mechanical assemblies,
after which the U.S.-made electrical controller assembly and other
miscellaneous parts are integrated into the mechanical assemblies to
form the GS-X pinsetter.
The GS-X pinsetter is installed into the bowling facility. This
process takes approximately 20 hours of skilled labor per pinsetter,
using tools and large moving equipment specially constructed for
that particular installation. The project manager and field foreman
manage the quality-assurance procedures and certify that each
pinsetter is installed and functioning according to Brunswick
specifications, which counsel states surpass those of the American
Bowling Congress.
Issue
Whether the bowling pinsetters are substantially transformed in
the United States so that they become products of the United States
for U.S. Government procurement purposes.
Law and Analysis
Under subpart B of part 177, 19 CFR 177.21 et seq., which
implements Title III of the Trade Agreements Act of 1979, as amended
(19 U.S.C. 2511 et seq.), the Customs Service issues country of
origin advisory rulings and final determinations on whether an
article is or would be a product of a designated country or
instrumentality for the purposes of granting waivers of certain
``Buy American'' restrictions in U.S. law or practice for products
offered for sale to the U.S. Government.
Under the rule of origin set forth under 19 U.S.C. 2518(4)(B):
``An article is a product of a country or instrumentality only if
(i) it is wholly the growth, product, or manufacture of that country
or instrumentality, or (ii) in the case of an article which consists
in whole or in part of materials from another country or
instrumentality, it has been substantially transformed into a new
and different article of commerce with a name, character, or use
distinct from that of the article or articles from which it was so
transformed.''
See also 19 CFR 177.22(a).
If the manufacturing or combining process is a minor one which
leaves the identity of the imported article intact, a substantial
transformation has not occurred. See Uniroyal Inc. v. United States,
3 CIT 220, 542 F. Supp. 1026 (CIT 1982). Assembly operations which
are minimal or simple, as opposed to complex or meaningful, will
generally not result in a substantial transformation. See C.S.D. 80-
111, C.S.D. 85-25, and C.S.D. 90-97.
Customs ruled in Headquarters Ruling Letter (``HRL'') 561734,
dated March 22, 2001, 66 FR 17222, that Sharp multifunctional
machines (printer, copier and fax machine) assembled in Japan were a
product of Japan for procurement purposes. The machines were
comprised of 227 parts (108 parts sourced from Japan, 92 parts from
[[Page 7409]]
Thailand, 3 parts from China, and 24 parts from other countries) and
eight subassemblies, each of which was also assembled in Japan.
Further, the scanner unit (one of the eight subassemblies) which was
assembled in Japan was characterized as ``the heart of the
machine.'' See also HRL 561568, dated March 22, 2001, 66 FR 17222.
In HRL 560433, dated September 19, 1997, Customs held that the
assembly in the United Kingdom of audio/video stereo receivers from
16 subassemblies and other components originating from various
countries resulted in a substantial transformation. Customs noted in
that ruling that numerous skilled workers assembled the stereo
receivers from numerous components and hundreds of raw materials. In
HRL 734045, dated October 8, 1991, Customs held that foreign
subassemblies and other components imported into Hong Kong which
were processed and assembled with other Hong Kong components to make
laptop and notebook personal computers were substantially
transformed as a result of the Hong Kong operations.
In HRL 558919, dated March 20, 1995, Customs held that an
extruder subassembly manufactured in England was substantially
transformed in the United States when it was wired and combined with
U.S. components (motor, electrical controls and extruder screw) to
create a vertical extruder. In HRL 559887, dated October 3, 1996,
Customs held that swivel joints and torsion spring balance
assemblies from India were substantially transformed when assembled
in the U.S. with U.S.-origin components to produce top and bottom
loading/unloading arms (petroleum handling equipment). Therefore,
the loading arms were considered products of the United States.
Customs recently ruled in HRL 562502, dated November 8, 2002, that a
Chinese-origin transfer feeder unit and Chinese-origin outer covers
were substantially transformed when assembled in Japan with a
Japanese-origin laser scanner unit to produce a printer engine.
``When taken together, the manufacture of the laser scanner unit and
the final assembly of the printer engine is complex and
meaningful.'' Therefore, for procurement purposes, the printer
engines were considered to be products of Japan.
In this case, the complex assembly of the central block from
three subassemblies, including the incorporation of three motors
from the drive frame subassembly into the central block, combined
with the subsequent assembly of the central block, six-pack, ball
accelerator, and U.S.-origin electrical controller assembly and the
installation of the pinsetters in bowling facilities in the United
States, when taken together, result in a substantial transformation
of the foreign-origin subassemblies involved. The processing in the
United States requires precise calibration and involves the assembly
of numerous parts and subassemblies and highly skilled labor. The
name, character and use of the foreign-origin subassemblies and
parts change as a result of the processing and other assembly
operations performed in the United States. Therefore, pursuant to 19
U.S.C. 2518(4)(B), and 19 CFR 177.22(a), we find that the country of
origin of the bowling pinsetters is the United States.
Holding
Based on the facts presented, the components imported into the
United States that are used in the manufacture of the bowling
pinsetters involved in this case are substantially transformed in
the United States. Accordingly, pursuant to 19 U.S.C. 2518(4)(B),
and 19 CFR 177.22(a), the country of origin of the bowling
pinsetters is the United States.
Notice of this final determination will be given in the Federal
Register as required by 19 CFR 177.29. Any party-at-interest other
than the party which requested this final determination may request,
pursuant to 19 CFR 177.31, that Customs reexamine the matter anew
and issue a new final determination.
Any party-at-interest may, within 30 days after publication of
the Federal Register notice referenced above, seek judicial review
of this final determination before the Court of International Trade.
Sincerely,
Michael T. Schmitz,
Assistant Commissioner, Office of Regulations & Rulings.
[FR Doc. 03-3510 Filed 2-12-03; 8:45 am]
BILLING CODE 4820-02-P