United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1991 HQ Rulings > HQ 0732986 - HQ 0733301 > HQ 0733251

Previous Ruling Next Ruling

HQ 733251

December 10, 1990
MAR 2-05 CO:R:C:V 733251 NL


Mr. Richard G. Seley
Rudolph Miles & Sons, Inc.
4950 Gateway East, P.O. Box 144
El Paso, Texas 79942

RE: Country of Origin Marking - Electric Fans for Cooling Computers and Copiers; Ball Bearings; Assembly; 19 CFR 134.35; Antidumping and Countervailing Duties

Dear Mr. Seley:

This is in response to your letter of March 20, 1990, requesting a ruling on the country of origin marking requirements applicable to small electric cooling fans assembled in Mexico from components of U.S., Japanese, and Singapore origin.


Your client, Nidec Corporation, is proposing to import small electric fans from Mexico suitable for cooling machines such as computers and photocopiers. It is your assumption that the finished fans would be classifiable under subheading 8414.59.80, Harmonized Tariff Schedule of the United States (HTSUS), which provides for "fans...other". Nidec would supply the components to the Mexican assembler, including ball bearings from Singapore, retaining rings from Japan, and the remaining components from the U.S. You estimate the value of the components from Japan and Singapore at approximately 19 percent of the value of the finished fans. The value of the labor performed in Mexico will represent approximately 20 percent of the value of the finished article. From these representations we deduce that the value of U.S. components will be approximately 60 percent of the total value.

Samples were submitted. Each fan consists of a housing, approximately 4" x 4", enclosing fan blades which evidently turn on the ball bearings. The process of assembly has not been described. Special tariff treatment will be sought for the U.S. components under subheading 9802.00.80, HTSUS, which provides an exemption from duty for the cost or value of U.S.-origin components returned to the U.S. as parts of articles assembled abroad.

It is your position that the completed fan will be a product of Mexico for country of origin marking purposes, and you request a ruling to this effect. It is further your position that the ball bearings from Singapore lose their identity upon incorporation into the cooling fans, and acquire Mexican origin derived from the Mexican origin of the cooling fan for entry purposes.

The other principal issue raised in your ruling request concerns antidumping and countervailing duties currently applicable to the subject ball bearings. In this regard two questions arise. First, does the presence of the bearings in the cooling fans result in an additional liability for duty based upon the antidumping and countervailing duty orders? Second, if additional duty is to be assessed, is the dutiable value the value of the bearing or the value of the completed cooling fan?


1) What country of origin marking requirements are applicable to the cooling fans assembled in Mexico from U.S. and foreign components?

2) Are the cooling fans subject to antidumping and countervailing duties by reason of the bearings from Singapore from which they are assembled?


Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. "Country of Origin" is defined in 19 CFR 134.1(b) as the country of manufacture, production, or growth of an article, or the country in which the article last underwent a substantial transformation. A substantial transformation is said to occur when, after processing, an article emerges having a new name, character, or use. See, 19 CFR 134.35.

In this case, the required marking of the fan is prescribed under the regulatory provisions governing subheading 9802.00.80., HTSUS. Section 10.22, Customs Regulations (19 CFR 10.22) provides that for articles assembled abroad from U.S. parts, and eligible for special tariff treatment pursuant to HTSUS subheading 9802.00.80, the country of assembly is considered the
country of origin for purposes of the country of origin marking requirements. This rule applies even if the foreign assembly does not result in a substantial transformation of the U.S. materials. Assuming the completed cooling fans are entitled to a partial duty exemption under subheading 9802.00.80, HTSUS, they must be marked to indicate they are a product of Mexico, whether or not the Mexican production operations effect a substantial transformation of the bearings or other materials.

With regard to your inquiry concerning antidumping and countervailing duties on bearings from Singapore, we are able to state that at this time the Customs Service has received no instructions from the Department of Commerce which would result in the assessment of such duties on cooling fans assembled in Mexico. The current instructions indicate that bearings variously classified under subheadings 8482, 8483, 8485, and 8708 HTSUS, when imported from Singapore, are subject to additional duty. See, Scope Appendices for Commerce Department Orders Nos. A-559-201 and C-559-201, circulated through the Customs Information Exchange (C.I.E.). These instructions do not refer to electric cooling fans containing antifriction bearings.

Absent such instructions, it is for Customs to determine the classification and dutiability of the cooling fans. For these purposes the key question is whether the bearings from Singapore lose their separate identity and are substantially transformed into the cooling fans by the assembly in Mexico. Since you have not asked for a ruling as to the classification of the fans, it is assumed for purposes of this ruling that upon importation into the U.S. the fans are classifiable at HTSUS subheading 8414.59.80, as stated in your request.

Customs recently addressed a similar issue in two recent rulings concerning the assembly of bearings in Mexico from foreign components. In HQ 083455 (September 6, 1990), Customs ruled that tapered roller bearings were not substantially transformed when assembled in Mexico from components of various foreign origins. The simple assembly of finished components, consisting of a cone, cage, rollers, and cup, was found to create a tapered roller bearing whose components retained their foreign origins. In HQ 087462 (October 22, 1990), Customs reached a similar conclusion with respect to pillow block ball bearing assemblies. The components consisted of antifriction balls separated by plastic elements enclosed in an inner and outer race, and grease nipples called Zerk fittings, both of Japanese origin, which were assembled in Mexico by incorporation into a machined block housing of Mexican origin. It was concluded that the essence of the pillow block is the ball bearing, which is clearly identifiable in the assembly and is the actual anti- friction element.

In this case, by contrast, the ball bearings in the cooling
fan constitute only a part of the assembled article, albeit an important one. The name, character, and use of the ball bearings are all changed so as to effect a substantial transformation, and the bearings lose their identity as separate articles. Accordingly, it is our opinion that the country of origin of the assembled cooling fan is Mexico, and that the fan is wholly different article from the bearings originating in Singapore which are incorporated into the fan. In the absence of further instructions from the Department of Commerce as to the scope of the antidumping and countervailing duties affecting bearings from Singapore, Customs would not assess such duties on these cooling fans imported from Mexico.

You are cautioned that pursuant to section 781 of the Tariff Act of 1930 (19 U.S.C. 1677j), the Department of Commerce is authorized, subject to certain limitations and standards, to prevent evasion of an antidumping or countervailing duty order by including within the scope of such an order mechandise which is completed or assembled in other foreign countries from merchandise subject to such orders. As previously stated, Customs has received no instructions from the Department of Commerce which would result in the assessment of duties on cooling fans assembled from bearings originating in Singapore. However, inasmuch as the authority to determine the scope of the relevant orders is vested in the Department of Commerce, this Customs Service ruling does not bind that Department, and pursuant to the above-referenced authority it could at a later date determine that the cooling fans are within the scope of the antidumping and countervailing duty findings affecting bearings imported from Singapore. Further questions you may have in this regard may be directed to the Office of Investigations, Import Administration, Department of Commerce, Washington, D.C. 20230.

Finally, you have asked whether, if the cooling fans were subject to the Department of Commerce orders governing bearings from Singapore, the antidumping and countervailing duties would be assessed on the entire cost or value of the cooling fans or only on the value of the bearings. Although that issue is not reached in this ruling, it is noted that previously Customs has ruled that such duties, if applicable to the imported article, will be assessed on the entire cost or value of the article. See, HQ 087462, supra (pillow blocks assembled in Mexico from Japanese bearings subject to antidumping and countervailing duties on their entire cost or value.)


Electrical cooling fans assembled in Mexico are subject to country of origin marking as products of that country. Antifriction bearings from Singapore which are incorporated into the cooling fans are substantially transformed by assembly into the fans. As imported into the U.S. the fans are not at this
time subject to the antidumping and countervailing duties applicable to antifriction bearings from Singapore.


John Durant, Director
Commercial Rulings Division

Previous Ruling Next Ruling

See also: