[Federal Register Volume 73, Number 212 (Friday, October 31, 2008)]
[Notices]
[Pages 64978-64979]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-25979]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning Walkers

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 U.S. Customs and Border 
Protection (``CBP'') has issued a final determination concerning the 
country of origin of certain walkers which may be offered to the United 
States Government under a government procurement contract. Based upon 
the facts presented, in the final determination CBP concluded that Hong 
Kong is the country of origin of the walkers for purposes of U.S. 
Government procurement.

DATES: The final determination was issued on October 22, 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 December 1, 2008.

FOR FURTHER INFORMATION CONTACT: Gerry O'Brien, Valuation and Special 
Programs Branch, Regulations and Rulings, Office of International Trade 
(202-572-8792).

SUPPLEMENTARY INFORMATION: Notice is hereby given that on October 22, 
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 certain walkers which may be offered to the United 
States Government under a government procurement contract. This final 
determination, in HQ H033839, was issued at the request of Drive 
Medical Design and Manufacturing 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). In the final 
determination, CBP concluded that, based upon the facts presented, 
certain articles will be substantially transformed in Hong Kong. 
Therefore, CBP found that Hong Kong is the country of origin of the 
finished articles 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), provides 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: October 22, 2008.
Sandra L. Bell,
Executive Director, Office of Regulations and Rulings, Office of 
International Trade.

Attachment

HQ H033839

October 22, 2008

MAR-2-05 OT:RR:CTF:VS H033839 GOB

Category: Marking. Beth C. Ring, Esq., Sandler, Travis & Rosenberg, 
P.A., 551 Fifth Avenue, New York, NY 10176.

Re: U.S. Government Procurement; Title III, Trade Agreements Act of 
1979 (19 U.S.C. 2511); Subpart B, Part 177, CBP Regulations; Walkers

    Dear Ms. Ring: This is in response to your letter of July 18, 
2008, requesting a final determination on behalf of Drive Medical 
Design and Manufacturing (``Drive Medical''), pursuant to subpart B 
of Part 177, Customs and Border Protection (``CBP'') Regulations (19 
CFR 177.21 et seq.). You made a supplemental submission on September 
29, 2008. Under the pertinent 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 as to 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 walkers. We note that Drive Medical is a party-at-interest 
within the meaning of 19 CFR 177.22(d)(1) and is entitled to request 
this final determination.

Facts

    You describe the pertinent facts as follows. Drive Medical will 
assemble the walkers at a facility in Hong Kong. You state that the 
two ``U'' frame side pieces will be manufactured in Hong Kong. All 
of the other parts will be manufactured in China. The parts consist 
of the following:
     two ``U'' frame side pieces
     two release pins
     two springs
     four brass pins
     four stainless steel wire springs
     four crossbars
     one ``H'' frame
     four silencer caps
     four rubber tips
     two composite plastic hand grips
     two plastic push buttons
     an assortment of steel screws and nuts
    You describe the manufacturing process as follows:
     The side frame is fitted with a handle grip using high 
pressure air to seat the handle in the proper position, The handle 
grip is heated prior to this process for better malleability.
     The top cross brace is secured to the side frame using 
a stainless steel star nut applied with an air screwdriver with a 
predetermined torque setting. This process is carried out on both 
front and back of the side frame and on both the left and right 
side.
     The side frames are placed through the ends of the 
center ``H'' frame. During this process a silencer ring is placed on 
the bottom tubes of the ``H'' frame, and an internal spacer is 
wrapped on the inside of the top of the ``H'' frame to reduce 
``wobble.''
     A rivet with plastic guide is now mounted under the 
``H'' frame directly to the side frame on both sides. These rivets 
hold the ``H'' frame in place.
     The lower side ``U'' frame support is now riveted to 
the side frame, front and back, on both sides of the walker.
     Release pins are dropped into both sides of the ``H'' 
frame to create the folding

[[Page 64979]]

mechanism catch. A spring and ``C'' clamp are added to the release 
pin on both sides of the walker.
     A flat folding guide plate is riveted to both sides on 
top of the release pins. Two rivets are used to secure the plate. 
One rivet is used to secure the side frame. The other is used to 
secure the folding guide plate to the ``H'' frame.
     The rivet that holds the flat folding guide plate to 
the ``H'' frame is outfitted with a plastic guide washer by placing 
the guide washer over the rivet during installation. This process 
allows for smooth operation when opening and folding the walker. The 
rivet is calibrated in tension for smooth operation and to reduce 
``wobble.''
     A plastic release button is riveted to the flat folding 
guide that initiates the folding mechanism. Pushing the plastic 
release activates the release pin.
     The rivet that secures the plastic release pad is 
calibrated to ensure a positive ``click'' when securely opened and 
for easy functioning.
     Four brass buttons are inserted into the four legs of 
the side frames. The brass buttons are inserted into the leg of the 
walker. A wire spring is added to the button before insertion.
     Four anti-rattle bushings are pressed and hammered to 
the bottom of each side frame leg.
     A silencer cap and tip are pressed and hammered to each 
external adjustable height leg and assembled to the walker.
     A rubber tip is heated in this process to ensure a snug 
fit.
     The legs are attached to the walker to ensure the 
proper fit and are then removed for shipping.
     Operation stickers and manuals are added to the walker.
     The walker is individually bagged, boxed and shipped.
    You further state as follows. The walker is manufactured to 
Drive Medical's specifications in order to impart characteristics of 
strength, durability, and flexibility. The design of the front cross 
frame was developed in the U.S. The calibration of the opening and 
closing mechanism is important to the operation of the walker in 
that it is essential that the user of the walker be able to open and 
close it with little effort. You state that the cost of the two 
``U'' frame side pieces is approximately 52 percent of the total 
cost of the components and the cost of manufacturing in Hong Kong 
(including the cost of the two ``U'' frame side pieces) is 70 to 80 
percent of the total cost of the walker.

Issue

    What is the country of origin of the subject walkers for the 
purpose 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 
(19 U.S.C. 2511 et seq.), CBP issues country of origin advisory 
rulings and final determinations as to 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).
    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, 573 F. Supp. 1149 (Ct. Int'l Trade 1983), 
aff'd, 741 F.2d 1368 (Fed. Cir. 1984). 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, C.S.D. 89-110, C.S.D. 89-118, C.S.D. 90-51, 
and C.S.D. 90-97. If the manufacturing or combining process is a 
minor one which leaves the identity of the article intact, a 
substantial transformation has not occurred. Uniroyal, Inc. v. 
United States, 3 CIT 220, 542 F. Supp. 1026 (1982), aff'd 702 F. 2d 
1022 (Fed. Cir. 1983). In Uniroyal, the court determined that a 
substantial transformation did not occur when an imported upper, the 
essence of the finished article, was combined with a domestically 
produced outsole to form a shoe.
    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, extent and 
nature of post-assembly inspection and testing procedures, and the 
degree of skill required during the actual manufacturing process may 
be relevant when determining whether a substantial transformation 
has occurred. No one factor is determinative.
    You cite HQ H017620, dated February 5, 2008, where CBP held that 
certain imported components of a flashlight and replacement lens 
head subassembly were substantially transformed as a result of 
manufacturing operations in the U.S. In that ruling, CBP stated:

    In support of this conclusion, we agree that the U.S.-origin LED 
imparts the essential character to both the replacement part and the 
finished product, as it generates the primary light of both 
products. We also recognize that Energizer has expended significant 
resources in connection with the design and development of the 
subject flashlight in the United States. Moreover, the U.S.-origin 
LED and the labor performed in the United States during the assembly 
and testing operations represent a majority of the costs associated 
with the production of both the replacement lens head subassembly 
and the finished flashlight.

    After a consideration of the evidence of record, we find that 
the operations in Hong Kong, including the manufacture in Hong Kong 
of the two ``U'' side frame pieces, will result in a substantial 
transformation of the components imported into Hong Kong. In making 
this finding, we note that all of the assembly operations will occur 
in Hong Kong and that the two ``U'' side frame pieces, which are 
manufactured in Hong Kong, are extremely vital parts of the walkers.
    Based upon this finding, we determine that the country of origin 
of the walkers for the purpose of government procurement is Hong 
Kong.

Holding

    The operations to be performed in Hong Kong will result in a 
substantial transformation of the goods imported into Hong Kong from 
China. Therefore, the country of origin of the walkers for the 
purpose of government procurement is Hong Kong.
    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 CBP reexamine the matter anew and 
issue a new final determination. Pursuant to 19 CFR 177.30, 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,
Sandra L. Bell
Executive Director
Office of Regulations and Rulings
Office of International Trade.

[FR Doc. E8-25979 Filed 10-30-08; 8:45 am]
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