[Federal Register Volume 73, Number 30 (Wednesday, February 13, 2008)]
[Notices]
[Pages 8339-8341]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-2631]


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DEPARTMENT OF HOMELAND SECURITY

 Customs and Border Protection


Notice of Issuance of Final Determination Concerning; Standard 
and Rolled-Edge Ball Seals

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security.

ACTION: Notice of final determination.

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SUMMARY: This document provides notice that the Bureau of Customs and 
Border Protection (CBP) has issued a final determination concerning the 
country of origin of two types of ball seals to be offered to the 
United States Government under an undesignated government procurement 
contract. Based on the facts presented, CBP has concluded that the 
operations performed in China do not result in a substantial 
transformation of the U.S. components. Therefore, the assembled ball 
seals will not be considered to be products of China.

DATES: The final determination was issued on February 6, 2008. 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, 2008.

FOR FURTHER INFORMATION CONTACT: Holly Files, Valuation and Special 
Programs Branch, Regulations and Rulings, Office of International Trade 
(202-572-8740).

SUPPLEMENTARY INFORMATION: Notice is hereby given that on February 6, 
2008, pursuant to subpart B of part 177, Customs Regulations (19 CFR 
part 177, subpart B), CBP issued a final determination concerning the 
country of origin of two types of ball seals to be offered to the 
United States Government under an undesignated government procurement 
contract. The CBP ruling number is H021398. This final determination 
was issued at the request of Brammall, Inc. d/b/a/ TydenBrammall 
(``TydenBrammall'') 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 simple assembly in China of three major U.S.-origin 
components with two minor Chinese-origin components does not result in 
a substantial transformation of the U.S.-origin components. Therefore, 
the assembled ball seals will not be considered to be products of China 
for purposes of U.S. Government procurement.
    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, CBP 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.

    Dated: February 6, 2008.
Myles B. Harmon,
Acting Executive Director, Office of Regulations and Rulings, Office of 
International Trade.

Attachment: HQ H021398

February 6, 2008
MAR-2-05 OT:RR:CTF:VS H021398 HEF
CATEGORY: Marking.
Ms. Linda M. Weinberg,
Barnes & Thornburg LLP, Suite 900, 750 17th Street, NW., Washington, 
DC 20006.

RE: U.S. Government Procurement; Final Determination; country of 
origin of ball seals; substantial transformation; 19 CFR Part 177.
    Dear Ms. Weinberg: This is in response to your letter dated 
December 21, 2007, requesting a final determination on behalf of 
Brammall, Inc. d/b/a TydenBrammall (``TydenBrammall''), pursuant to 
subpart B of Part 177, Customs and Border Protection (``CBP'') 
Regulations (19 CFR 177.21 et seq.). Under these regulations, which 
implement Title III of the Trade Agreements Act of 1979, as amended 
(19 U.S.C. 2511 et seq.), CBP 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 
purpose of granting waivers of certain ``Buy American'' restrictions 
in U.S. law or practice for products offered for sale to the U.S. 
Government.
    This final determination concerns the country of origin of 
certain ball seals. We note that TydenBrammall is a party-at-
interest within the meaning of 19 CFR 177.22(d)(1) and is entitled 
to request this final determination. Samples of the ball seals, at 
various stages of the manufacturing process, were also submitted 
with your request. In preparing this final determination, 
consideration was given to your supplemental submission dated 
January 9, 2008.

Facts

    The products subject to this final determination are two types 
of ball seals known as the ``Tyden Standard Ball Seal'' and the 
``Tyden Rolled-Edge Ball Seal.'' The ball seals are used to secure 
rail, container, and truck cargo shipments. The ``ball'' of a seal 
is comprised of metal top and bottom caps. A metal strap runs 
through the center of the ball and extends at length from the bottom 
cap. The metal strap may have a custom seal number embossed on it 
and/or a printed bar code. A die cut notch at the end of the metal 
strap is used to engage with two interlocking D-shaped rings, 
located inside the ball, to form a functional security lock. The 
ball itself is slotted to provide visible proof to the user that the 
seal is locked.
    You advise that TydenBrammall uses identical materials and 
components in the manufacture of both the Tyden Standard Ball Seal 
and the Tyden Rolled-Edge Ball Seal. The manufacturing processes for 
the two products are also identical, with the exception that the 
Rolled-Edge Ball Seal requires the additional step of having its 
edges rolled under at the end of the U.S. processing. The ball seals 
are assembled from five components. You advise that the seals' three 
major components are produced in the United States from U.S. 
materials. The other two components are sourced in China.
    To produce the U.S.-origin components, TydenBrammall purchases 
rolls of coiled steel from a U.S. steel producer. You note that 
highly trained operators and maintenance die technicians load the 
steel coils onto two computer-controlled presses and dies at 
TydenBrammall's U.S. facility. The presses and dies are used to 
stamp the strap, ball seal top cap, and ball seal bottom cap from 
the coiled steel into specific sizes and subject to precise 
tolerances. You assert that the U.S.-origin components have no other 
use other than as components of the finished ball seals due to their 
specific shapes, sizes, and tolerances.
    Next, the three U.S.-origin components are shipped to China for 
a simple assembly process. You state that in China, unskilled 
laborers manually assemble two Chinese-origin ``D'' shaped locking 
rings with the U.S.-origin strap. After the rings are attached to 
the strap, the top and bottom caps are manually attached using a 
small hand press that seals the caps together by slightly bending 
the top cap around the bottom cap.
    The assembled ball seals are then returned to TydenBrammall's 
U.S. facility where they are stored until ordered by specific end-
customers. When a customer places an order, assembled seals are 
removed from storage and placed on a machine that die cuts a notch 
into the ``male'' end of the strap. You explain that the notch, like 
the teeth on a key, makes the seal a functional security lock. You 
also advise that prior to the die cutting of the notch, the seal is 
not functional. The same machine used to die cut the notch also 
embosses and/or inkjet prints

[[Page 8340]]

a unique serial number and/or bar code onto the strap of the seal. 
The operator of the machine then bundles the ball seals in 
sequential numbered order in groups of 100 seals.

Issue

    What is the country of origin of the assembled ball seals for 
purposes of U.S. Government procurement?

Law and Analysis

    Pursuant to subpart B of Part 177, 19 CFR 177.21 et seq., which 
implements Title III of the Trade Agreements Act of 1979, as amended 
(``TAA''; 19 U.S.C. 2511 et seq.), CBP 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 at 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).

    In rendering advisory rulings and final determinations for 
purposes of U.S. Government procurement, CBP applies the provisions 
of subpart B of Part 177 consistent with the Federal Procurement 
Regulations. See 19 CFR 177.21. In this regard, CBP recognizes that 
the Federal Procurement Regulations restrict the U.S. Government's 
purchase of products to U.S.-made or designated country end products 
for acquisitions subject to the TAA. See 48 CFR 25.403(c)(1). The 
Federal Procurement Regulations define ``U.S.-made end product'' as:

    * * * an article that is mined, produced, or manufactured in the 
United States or that is substantially transformed in the United 
States 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 transformed.

48 CFR 25.003

    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. Belcrest 
Linens v. United States, 6 Ct. Int'l Trade 204, 573 F. Supp. 1149 
(1983), aff'd, 741 F.2d 1368 (Fed. Cir. 1984). 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. Uniroyal, Inc. v. United States, 3 Ct. Int'l Trade 220, 
542 F. Supp. 1026 (1982). In Uniroyal, the court determined that a 
substantial transformation did not occur when an imported footwear 
upper, the essence of the finished article, was combined with a 
domestically produced outsole to form a shoe. See id. Assembly 
operations that 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.
    In order to determine whether a substantial transformation 
occurs when components of various origins are assembled to form 
completed articles, CBP considers the totality of the circumstances 
and makes such decisions on a case-by-case basis. The country of 
origin of the article's components, the extent of the processing 
that occurs within a given country, and whether such processing 
renders a product with a new name, character, and use are primary 
considerations in such cases. Additionally, facts such as resources 
expended on product design and development, extent and nature of 
post-assembly inspection procedures, and worker skill required 
during the actual manufacturing process will be considered when 
analyzing whether a substantial transformation has occurred; 
however, no one such factor is determinative.
    CBP has considered a number of different scenarios involving the 
assembly of locking apparatus. In Headquarters Ruling Letter 
(``HRL'') 734440, dated March 30, 1992, CBP found that a lock 
apparatus was substantially transformed in the United States as a 
result of combining it with pieces manufactured in the United 
States. In rendering the country of origin marking decision, CBP 
noted that the predominant expense of the assembled lock was from 
the parts produced in the United States, which required extensive 
manufacturing and development. By contrast, the imported piece was a 
generic mechanism that was inserted into the U.S. piece.
    In another country of origin marking case, HRL 734923, dated May 
14, 1993, CBP determined that imported components of a door lockset, 
the rosettes and parts of the latch, were substantially transformed 
when they were assembled together with significant U.S. components 
in the United States to make the finished door lockset. CBP found 
the manufacture of the rosettes in China to be relatively simple and 
that it did not require a great deal of precision as compared to the 
manufacture of the other components in the United States, which 
required significant precision and substantial machinery and 
tooling.
    In HRL 735133, dated May 5, 1994, CBP held that imported lock 
parts and assemblies were not substantially transformed when 
assembled in the United States with a U.S.-origin coverplate screw. 
CBP noted that most of the cost in making the finished lock was 
attributable to operations performed in Taiwan and that the 
production in the United States was a simple manual assembly 
operation of basically finished parts.
    Most recently, in HRL W563587, dated February 8, 2007, CBP 
issued another government procurement final determination to 
TydenBrammall concerning bolt container seals and cable seals. In 
HRL W563587, CBP considered two different manufacturing scenarios 
for each of the two products: one where the seals were assembled in 
the United States from imported components and another where the 
seals were assembled in the United States from imported components 
and a U.S.-origin lock body. In each instance, the U.S. operations 
involved the simple assembly of only four or five parts. The 
production of the bolt container seal involved the assembly of four 
parts to form a lock body assembly and the packaging of the assembly 
with a finished bolt shank of Chinese-origin. CBP found that 
packaging the bolt shank with the assembly did not substantially 
transform the bolt shank. Thus, the bolt shank retained its Chinese 
origin under both manufacturing scenarios, and the country of origin 
of the lock body assembly was determined separately. Where the 
products were produced entirely from foreign components, CBP found 
the U.S. assembly operations insufficient to substantially transform 
the foreign components into products of the United States. After 
finding that the Chinese-origin lock bodies imparted the essential 
character of both the cable seal and the lock body assembly, CBP 
determined that their country of origin was China. Where U.S. lock 
bodies were used, CBP determined that the country of origin of the 
cable seal and the lock body assembly was the United States. In 
reaching this determination, CBP noted that the U.S.-origin parts 
and the U.S. labor accounted for most of the cost of making the 
seals.
    In the instant case, the major components of the ball seals are 
stamped in the United States from U.S.-origin steel to precise sizes 
and tolerances by skilled technicians using relatively sophisticated 
machinery. Next, the three U.S.-origin components are shipped to 
China where unskilled workers perform a simple manual assembly of 
the three components with two minor Chinese-origin components. The 
seals are then returned to the United States where notches are die 
cut into the straps to make the products functional locking 
mechanisms. We find that the U.S.-origin components impart the 
essential character to the assembled seals. Based on our previous 
rulings and the facts presented in the instant case, we also find 
that the operations performed in China are not complex or 
meaningful. The Chinese operations are simple assembly operations 
that involve a small number of components and do not appear to 
require a considerable amount of time, skill, or attention to 
detail. As such, the assembled ball seals, upon importation to the 
United States, will not be considered to be products of China.

Holding

    Based on the facts provided, the U.S.-origin components impart 
the essential character to the assembled ball seals. The operations 
performed in China do not result in a substantial transformation of 
the U.S.-origin components. As such, the assembled ball seals, upon 
importation to the United States, will not be considered to be 
products of China.
    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

[[Page 8341]]

CFR 177.31, that CBP 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,

Myles B. Harmon,
Acting Executive Director, Office of Regulations and Rulings, Office 
of International Trade.
 [FR Doc. E8-2631 Filed 2-12-08; 8:45 am]
BILLING CODE 9111-14-P