[Federal Register Volume 75, Number 22 (Wednesday, February 3, 2010)]
[Notices]
[Pages 5618-5620]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-2305]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning a Certain 
Alternator

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 a certain alternator. Based upon the facts 
presented, CBP has concluded in the final determination that the U.S. 
is the country of origin of the alternator for purposes of U.S. 
government procurement.

DATE: The final determination was issued on January 21, 2010. 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 March 5, 2010.

FOR FURTHER INFORMATION CONTACT: Elif Eroglu, Valuation and Special 
Programs Branch: (202) 325-0277.

SUPPLEMENTARY INFORMATION: Notice is hereby given that on January 21, 
2010, 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 the alternator which may be offered to the U.S. 
Government under an undesignated government procurement contract. This 
final determination, in HQ H075667, was issued at the request of Ecoair 
Corp. 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 has concluded 
that, based upon the facts presented, the alternator, assembled in the 
U.S. from parts made in China and the U.S., is substantially 
transformed in the U.S., such that the U.S. is the country of origin of 
the finished article 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: January 21, 2010.
Sandra L. Bell,
Executive Director, Regulations and Rulings, Office of International 
Trade.
Attachment

H075667

January 21, 2010
OT:RR:CTF:VS H075667 EE
CATEGORY: Marking
Mr. Peter S. Knudsen, Jr.
Ecoair Corp.
Four Industrial Circle
Hamden, CT 06517-3152

RE: U.S. Government Procurement; Title III, Trade Agreements Act of 
1979 (19 U.S.C. Sec.  2511); Subpart B, Part 177, CBP Regulations; 
Country of Origin; Eco-Tech Heavy Duty Alternator

    Dear Mr. Knudsen: This is in response to your correspondence of 
October 31, 2009, in which you requested a final determination on 
behalf of Ecoair Corp. (``Ecoair''), pursuant to subpart B of part 177, 
Customs and Border Protection (``CBP'') Regulations (19 C.F.R. Sec.  
177.21 et seq.). Under the pertinent regulations, which implement Title 
III of the Trade Agreements Act of 1979, as amended (19 U.S.C. Sec.  
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 the Eco-
Tech Heavy Duty Alternator. We note that Ecoair is a party-at-interest 
within the meaning of 19 C.F.R. Sec.  177.22(d)(1) and is entitled to 
request this final determination.

FACTS:

    You describe the pertinent facts as follows. Eco-Tech Alternators 
operate in diesel powered military boats, fire trucks, ambulances, 
utility trucks, school shuttles, party buses, and commercial fishing 
boats; all applications where significant operating time is spent at 
idle and where electric power needs are independent of the

[[Page 5619]]

engine speed. Eco-Tech alternators provide 80% of maximum electrical 
output at idle versus 30% for typical conventional alternators. 
Therefore, all of the on-board electronics of emergency vehicles can be 
supported while vehicles are operating at idle, instead of keeping 
their engines racing in high idle operation.
    You advise that there are two important parts of alternators: 1. 
the electro/mechanical parts including the rotor, stator, and end 
frames; and, 2. the electronic component, i.e. the regulator. The 
regulator controls the alternator by enabling it to supply the amount 
of electric power that matches the needs of the vehicle. Should the 
regulator not supply enough power, the battery will get depleted and 
the vehicle will stop operating. If the regulator supplies too much 
electrical power, the battery and the wiring will get hot and fail. You 
state that the electro/mechanical parts of the alternator are 
manufactured by Dehong Eco-Tech, a joint venture company in China. The 
electronic portion, the regulator, is manufactured in the U.S. by 
Carleton Industries. The electro/mechanical parts will be shipped to 
the Ecoair facility in Hamden, Connecticut where they will be assembled 
with the U.S. manufactured regulator into the alternator. The 
alternator will be tested and packaged in the U.S.
    You have submitted the bill of materials for the alternator. Some 
of the components from China include the following: stator assembly, 
rotor assembly, rectifier, regulator base assembly, insulators, rear 
cover, outer package, and inner package. Components sourced in the U.S. 
include overvoltage transient suppressor, retainer ring, bearings, 
regulator, and cable. Drive end housing and diode end housing are 
sourced both in China and the U.S. You submitted schematics, 
photographs, specifications, and the step-by-step assembly process of 
the regulator and the alternator in the U.S. The assembly of the 
alternator, from components including the regulator, is comprised of 
thirty-one discrete steps and fifty-two parts, takes approximately 169 
minutes. You claim that each step is completed by skilled workers who 
undergo an extensive training process.
    Alternator assembly process involves pressing the bearing to the 
drive end housing; installing the snap ring, the heilicoil, and the 
stator; measuring the stator resistance and stator AUX winding 
resistance; using fluke meter to measure the rotor resistance; a hi-pot 
test to check insulation between each phase to ground; pressing the 
rotor into the stator/drive end housing assembly; installing the SRE 
housing, installing the air flow deflector; installing the rectifier 
sub-assembly; installing the heat shrink tubing; and, installing the 
regulator back plate and the ignition protect parts.

ISSUE:

    What is the country of origin of the Eco-Tech Heavy Duty Alternator 
for the purpose of U.S. government procurement?

LAW AND ANALYSIS:

    Pursuant to subpart B of part 177, 19 C.F.R. Sec.  177.21 et seq., 
which implements Title III of the Trade Agreements Act of 1979, as 
amended (19 U.S.C. Sec.  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. Sec.  
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 C.F.R. Sec.  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 Acquisition Regulations. See 19 
C.F.R. Sec.  177.21. In this regard, CBP recognizes that the Federal 
Acquisition 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 C.F.R. Sec.  25.403(c)(1). The 
Federal Acquisition 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 C.F.R. Sec.  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. Factors which may be 
relevant in this evaluation may include the nature of the operation 
(including the number of components assembled), the number of different 
operations involved, and whether a significant period of time, skill, 
detail, and quality control are necessary for the assembly operation. 
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 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.
    In a number of rulings (e.g., HQ 735608, dated April 27, 1995 and 
HQ 559089 dated August 24, 1995), CBP has stated: ``in our experience 
these inquiries are highly fact and product specific; generalizations 
are troublesome and potentially misleading. The determination is in 
this instance `a mixed question of technology and Customs law, mostly 
the latter.' '' Texas Instruments, Inc. v. United States, 681 F.2d 778, 
783 (CCPA 1982).
    This case involves fifty-three components which are proposed to be 
assembled in the U.S., largely by skilled workers. The regulator, 
manufactured in the U.S., is the electronic component of

[[Page 5620]]

the alternator, which controls the electrical output of the alternator 
to match the electrical load of the vehicle. The regulator is a key 
component of the alternator. Should the alternator not supply enough 
power, the battery will get depleted and the vehicle will stop 
operating. The regulator will be assembled with fifty-two other 
components, into the alternator in a thirty-one step process which will 
take approximately 169 minutes. Under the described assembly process, 
the foreign components lose their individual identities and become an 
integral part of a new article, the alternator, possessing a new name, 
character and use. Based upon the information before us, we find that 
the components that are used to manufacture the alternator, including 
the regulator manufactured in the U.S., are substantially transformed 
as a result of the assembly operations performed in the U.S., and that 
the country of origin of the alternator for government procurement 
purposes is the U.S.

HOLDING:

    The components that are used to manufacture the alternator are 
substantially transformed as a result of the assembly operations 
performed in the U.S. Therefore, the country of origin of the 
alternator for government procurement purposes is the U.S.
    Notice of this final determination will be given in the Federal 
Register, as required by 19 C.F.R. Sec.  177.29. Any party-at-interest 
other than the party which requested this final determination may 
request, pursuant to 19 C.F.R. Sec.  177.31, that CBP reexamine the 
matter anew and issue a new final determination. Pursuant to 19 C.F.R. 
Sec.  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, Regulations and Rulings, Office of International 
Trade.

[FR Doc. 2010-2305 Filed 2-2-10; 8:45 am]
BILLING CODE P