[Federal Register Volume 83, Number 104 (Wednesday, May 30, 2018)]
[Notices]
[Pages 24811-24813]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-11504]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning Certain 
Electric Scissor Lifts

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 electric scissor lifts. Based upon the 
facts presented, CBP has concluded that the country of origin of the 
electric scissor lifts in question is the United States, for purposes 
of U.S. Government procurement.

DATES: The final determination was issued on May 21, 2018. A copy of 
the final determination is attached. Any party-at-interest, as defined 
in 19 C.F.R. 177.22(d), may seek judicial review of this final 
determination within June 29, 2018.

FOR FURTHER INFORMATION CONTACT: Yuliya A. Gulis, Valuation and Special 
Programs Branch, Regulations and Rulings, Office of Trade, at (202) 
325-0042.

SUPPLEMENTARY INFORMATION: Notice is hereby given that on May 21, 2018 
pursuant to subpart B of Part 177, U.S. Customs and Border Protection 
Regulations (19 C.F.R. part 177, subpart B), CBP issued a final 
determination concerning the country of origin of certain electric 
scissor lifts (R Series Scissor Lift models 2632R, 3246R, and 4045R), 
produced by JLG Industries, Inc., which may be offered to the U.S. 
Government under an undesignated government procurement contract. This 
final determination, HQ H294980, was issued under procedures set forth 
at 19 C.F.R. 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 the country of origin of the 
electric scissor lifts is the United States for purposes of U.S. 
Government procurement.
    Section 177.29, CBP Regulations (19 C.F.R. 177.29), provides that a 
notice of final determination shall be published in the Federal 
Register within 60 days of the date the final determination is issued. 
Section 177.30, CBP Regulations (19 C.F.R. 177.30), provides that any 
party-at-interest, as defined in 19 C.F.R. 177.22(d), may seek judicial 
review of a final determination within 30 days of publication of such 
determination in the Federal Register.

    Dated: May 21, 2018.
Alice A. Kipel,
Executive Director, Regulations and Rulings, Office of Trade.

HQ H294980

May 21, 2018

OT:RR:CTF:VS H294980 YAG

CATEGORY: Origin

Mr. Thomas A. Coulter 411 East Franklin Street, Suite 500 Richmond, VA 
23219

RE: U.S. Government Procurement; Country of Origin of Electric Scissor 
Lifts; Title III, Trade Agreements Act of 1979 (19 U.S.C. Sec.  2511 et 
seq.); Subpart B, Part 177, CBP Regulations

Dear Mr. Coulter:
    This is in response to your correspondence dated March 1, 2018, 
requesting a final determination, on behalf of your client, JLG 
Industries, Inc. (``JLG''), concerning the country of origin of certain 
electric scissor lifts, pursuant to subpart B of Part 177 of the U.S. 
Customs and Border Protection (``CBP'') Regulations (19 C.F.R. Sec.  
177.21 et seq.).
    We note that JLG 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:

    JLG is an Oshkosh Corporation Company, headquartered in 
McConnellsburg, Pennsylvania, and a global leader in the manufacture of 
electric powered and engine powered aerial work platforms. The electric 
scissor lifts under consideration are part of the JLG R Series family 
of Scissor Lift products. The R Series is partially assembled in 
Tianjin, China and then shipped to the United States for additional 
manufacturing and testing, and final assembly. Once completed, the 
product will be introduced in commerce and offered for sale, lease, or 
rental to the U.S. Government.
    CBP has previously issued an advisory country of origin ruling 
concerning JLG's electric scissor lifts and determined them to be of 
U.S.-origin. The R Series under review in this case are stated to be 
new models and 95 percent of the processing is the same, except there 
is a slight increase in the low-level, unskilled assembly in China and 
an increase in high-level skilled work on the brain of the product 
performed in the United States.
    The three R Series Scissor Lift models that JLG plans to 
manufacture are the 2632R, the 3246R, and the 4045R models. While the 
function of all three models is the same, the models differ in 
specifications, such as size and platform capacity. A Bill of Material 
was submitted for Model 4045R. You state that the Bills of Material for 
the other two R Series Scissor Lift models are substantially the same. 
As reflected in the detailed Bill of Material, there are 29 separate 
sub-assemblies/components, in varying quantities, of the R Series 
Scissor Lift. Approximately 40 percent of the parts are of U.S.-origin 
and 60

[[Page 24812]]

percent of Chinese origin. The remaining few components are sourced 
from South Korea, Italy, Ireland, and Germany (all designated countries 
for U.S. Government procurement purposes).
    JLG also submitted charts outlining the 25 separate operational 
sequences, man hours and skill level, for the operations performed in 
China and the United States in the manufacture of the R Series Scissor 
Lift. You state that the 15 operations performed in the United States 
are complex and meaningful, and require medium skill to accomplish, 
while the 10 operations performed in China are relatively simple 
hardware assembly and packaging. The following processes are performed 
in China: assembling the front and rear frame, assembling components 
(doors, etc.), assembling hydraulic tank and steering hose, building up 
and installing arm, building up routing and frame covers, installing 
rails and packaging the partially assembled unit into a cargo container 
for shipment to the United States. As imported, the Chinese good is 
stated to be a non-operable platform. You assert that the operations 
performed in the United States result in a ``self-propelled, saleable, 
scissor lift.'' Further, you claim a significant part of the final 
manufacturing and assembly process of JLG's electric scissor lift 
occurring in the United States consists of functional testing, quality 
verification, machine calibration, dimensional and structural 
inspection, and testing, requiring specialized employee training and 
skill.
    The electric scissor lifts have three control modules that act as 
the ``brain'' of the machine. It is stated that these modules are the 
most critical components in controlling the machine's functions. These 
modules are: (1) the platform module, (2) the power controller module, 
and (3) the logic module. With the exception of the shell of the logic 
module, which is manufactured in Mexico, all three control modules are 
manufactured in the United States. The other smart components that 
interface with the modules referenced above, are also manufactured, 
assembled, and installed in the United States. These components include 
batteries, a platform control box (allows the user to lift and lower 
the platform, and drive and steer the machine), and ground control 
panel (a secondary operator interface that allows the user to lift and 
lower the platform while not in the work platform). Finally, all 
software contained in the ``brain'' is developed and programmed 
entirely in the United States. The software and module development 
consumed over 8,000 hours of engineering time. The modules are 
installed and tested in the United States. Final machine calibration of 
the electric scissor lifts is also performed subsequent to importation.

ISSUE:

    What is the country of origin of the electric scissor lifts for 
purposes of U.S. Government procurement?

LAW AND ANALYSIS:

    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, 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 (``TAA''), as 
amended (19 U.S.C. Sec.  2511 et seq.).
    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 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 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 Trade Agreements Act. 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.'' See 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 the operations performed and whether the parts lose their 
identity and become an integral part of the new article. Belcrest 
Linens v. United States, 6 C.I.T. 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 that leaves the identity of the imported article 
intact, a substantial transformation has not occurred. Uniroyal, Inc. 
v. United States, 3 C.I.T. 220, 542 F. Supp. 1026 (1982).
    In Headquarters Ruling Letter (``HQ'') H022169, dated May 2, 2008, 
a glider (consisting of a frame, finished cab, axels, and wheels) was 
imported into the United States and assembled with approximately 87 
different component parts (including the essential parts: a motor, 
controller, and charger of Canadian origin; a gear box and axel of U.S. 
origin; and brakes of Indian origin) into an electric mini-truck. The 
process consisted of eight assembly work stations involving attachment 
and installation operations, as well as quality control and testing of 
the product. CBP held that the imported glider and other foreign 
components were substantially transformed into an electric mini-truck 
by the assembly operations that took place in the United States. Our 
decision was based on finding that the imported glider lost its 
individual identity and became an integral part of a new article 
possessing a new name, character, and use. Likewise, in HQ H155115, 
dated May 24, 2011, CBP found that assembly in the United States of an 
imported glider, and other imported and U.S.-origin parts constituted a 
substantial transformation into an article with a new name, character, 
and use. The assembly process in the United States was complex and 
time-consuming and involved a significant U.S. contribution in both 
parts and labor.
    Similarly, in HQ H118435, dated October 13, 2010, the assembly of a 
chassis, plastic body parts, and various miscellaneous pieces of 
plastic trim from China and U.S.-origin battery packs, motors, 
electronics, wiring assemblies, seats, and chargers into electric golf 
and recreational vehicles was considered a substantial transformation. 
CBP found that a substantial transformation occurred in the United 
States given the complexity and duration of the U.S. manufacturing 
process, along with the fact that between 12 and 17 of the 53 to 62 
components were U.S. components and critical in making the electric 
vehicle.
    Based on the information provided in your letter and consistent 
with CBP rulings cited above, we note that while many important 
components of the R Series Scissor Lift products are of

[[Page 24813]]

Chinese origin, and many significant processing operations occur in 
China, the Chinese operations require less skill and precision, and the 
product remains inoperable when imported into the United States. In 
contrast, the final assembly of the product, 15 out of 25 operational 
sequences of which are performed in the United States, requires a good 
deal more skill, precision and technical expertise. Many of the 
critical operations involved in completing the product, such as 
installing the work platforms' software, manufacturing the ``brain'' of 
the system and attaching the modules to the product, are also performed 
in the United States. More importantly, 40 percent of the remaining 
components of the electric scissor lifts are of U.S.-origin. This 
includes the three control modules, which act as the ``brain'' of the 
machine, without which the machine cannot function; batteries; the 
platform control box; and, the ground control panel. We also recognize 
that the software contained in the three modules is completely 
developed and programmed in the United States. In addition, significant 
operations to produce the product are performed in the United States, 
such as sophisticated testing, inspection, calibration and preparation 
of the product. Consequently, we find that the imported partially 
assembled R Series lifts are substantially transformed as a result of 
the assembly operations performed in the United States to produce the 
fully functional and operational electric scissor lifts. Based on the 
information presented, it is our opinion that the country of origin of 
the RS Scissor Lift is the United States.

HOLDING:

    Based on the facts provided, the finished electric scissor lifts 
will be considered a product of the United States for purposes of U.S. 
Government procurement.
    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 of publication 
of the Federal Register Notice referenced above, seek judicial review 
of this final determination before the Court of International Trade.
Sincerely,
Alice A. Kipel, Executive Director Regulations and Rulings Office of 
Trade

[FR Doc. 2018-11504 Filed 5-29-18; 8:45 am]
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