[Federal Register: February 13, 2003 (Volume 68, Number 30)]
[Notices]               
[Page 7407-7409]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13fe03-82]                         


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DEPARTMENT OF THE TREASURY


Customs Service


 
Notice of Issuance of Final Determination Concerning Bowling 
Pinsetters


AGENCY: Customs Service, Department of the Treasury.


ACTION: Notice of final determination.


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SUMMARY: This document provides notice that Customs has issued a final 
determination concerning the country of origin of certain bowling 
pinsetters which are installed at military facilities in the United 
States and which will be offered to the United States Government. The 
final determination found that based upon the facts presented, the 
country of origin of the bowling pinsetters is the United States.


DATES: The final determination was issued on February 7, 2003. 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, 2003.


FOR FURTHER INFORMATION CONTACT: Karen S. Greene, Special 
Classification and Marking Branch, Office of Regulations and Rulings 
(202-572-8838).


SUPPLEMENTARY INFORMATION: Notice is hereby given that on February 7, 
2003, pursuant to subpart B of part 177, Customs Regulations (19 CFR 
part 177, subpart B), Customs issued a final determination concerning 
the country of origin of certain bowling pinsetters offered to the 
United States Government. The U.S. Customs ruling number is HQ 562583. 
This final determination was issued at the request of Brunswick 
Corporation, 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 assembly in the United States of 
numerous foreign and U.S. subassemblies and parts to create the 
pinsetters and the installation of the pinsetters in facilities in the 
United States result in a substantial transformation of the foreign 
subassemblies. Accordingly, the country of origin of the bowling 
pinsetters is the United States.
    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, Customs 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.
    Any party-at-interest, as defined in 19 CFR 177.22(d), may seek 
judicial review of this final determination within 30 days of (date of 
publication in the Federal Register).


    Dated: February 7, 2003.
Michael T. Schmitz,
Assistant Commissioner, Office of Regulations and Rulings.
    Attachment.


HQ 562583


MAR-05 RR:CR:SM 562583 KSG
February 7, 2003.
Category: Marking


Richard M. Belanger, Esq.,
Sidley Austin Brown & Wood LLP, 1501 K Street, NW., Washington, DC 
20005.
Re: Country of origin of bowling pinsetters; substantial 
transformation; 19 CFR 177.22; procurement.


    Dear Mr. Belanger: This is in response to your letters dated 
November 18, 2002, and January 17, 2003, on behalf of Brunswick 
Corporation, requesting a final determination of origin pursuant to 
19 CFR 177.22(c) regarding U.S. Government procurement of certain 
bowling pinsetters assembled in the United States.


Facts


    Brunswick Corporation is the importer of the components of the 
bowling pinsetters and therefore, is a party-in-interest as defined 
in 19 CFR 177.22(d).
    This case involves the GS-X model of bowling pinsetters, which 
are automated machines designed to return bowling balls, pick up 
standing bowling pins and clear the deck at bowling facilities. The 
pinsetters are sold to military installations and other U.S. 
Government entities. This request involves a contract for 
installation of the GS-X pinsetters at bowling alleys located inside 
the United States. Brunswick anticipates that it will enter into 
contracts in the future for facilities at U.S. military bases in 
foreign countries as well as in the United States.
    The GS-X pinsetter is typically sold in sets of two mechanical 
subassemblies and one electrical controller assembly plus other 
parts, although Brunswick may occasionally sell a single mechanical 
assembly with an attached electrical controller. The electrical 
assembly is manufactured in the United States by Controls, Inc., an 
unrelated company.
    The mechanical assemblies are comprised of seven subassemblies 
consisting of thousands of components from numerous countries. The 
mechanical assemblies consist of three major parts: (1) The central 
block; (2) the ``six-pack''; and (3) the ball accelerator. The 
central block is a large steel box that contains four subassemblies: 
the sweep wagon subassembly; the setting table subassembly; the 
drive frame sub-assembly; and the distributor subassemblies. 
Included in the drive frame subassembly are three


[[Page 7408]]


motors, including the distributor motor, the sweep motor and the 
table motor. The distributor subassembly, which resembles a conveyor 
belt assembly line, takes the pins from the pin elevator subassembly 
and places them in the setting table subassembly. The setting table 
subassembly picks up the standing pins from the lane and takes them 
again from the distributor subassembly before setting them down on 
the lane. Between the time when the setting table picks up the 
standing pins and sets them down again, the sweep wagon subassembly 
sweeps away felled pins. The drive frame subassembly houses three of 
the motors that are needed to run the central block and six-pack.
    The six-pack assembly contains the pin elevator subassembly with 
two pin elevators and the ball pit subassembly with two ball 
cushions and two rollers. The pin elevator subassembly receives the 
pins from the ball pit subassembly and raises them into the 
distributor subassembly. The ball pit subassembly handles the 
initial impact of the pins and ball and cycles them through the 
pinsetter to get ready for the next ball.
    The ball accelerator includes the ball accelerator motor. The 
ball accelerator subassembly returns the ball to the bowler.
    In addition to the above-described mechanical subassemblies, the 
complete pinsetter, as installed, contains the U.S.-origin 
electrical controller assembly as well as other U.S. parts.
    In foreign country X, Brunswick constructs the large steel frame 
that houses the central block. Numerous other parts from various 
countries are also shipped to foreign country X for assembly of the 
seven principal subassemblies of the mechanical assembly. Brunswick 
then attaches the distributor subassembly to the steel casing of the 
central block. The six remaining subassemblies and the central block 
casing are then shipped to a manufacturing facility in Muskegon, 
Michigan.


I. Processing Performed at Michigan Plant


    In the United States (Muskegon, Michigan), Brunswick integrates 
the sweep wagon and setting table subassemblies, as well as the 
three motors of the drive frame subassembly, into the central block.
    The integration of the sweep wagon mechanical subassembly 
involves installing it into the central block in a front orientation 
at a 45 degree diagonal position, with the right end being placed 
into the right sweep track first. Brunswick then adjusts the rollers 
to a minimum clearance of five millimeters on each side between the 
roller screw, taking care to ensure that adequate clearance is 
maintained during the entire length of travel by manually running 
the wagon forward and aft. Brunswick then attaches the sweep wagon 
to the sweep crank arms with nylon bushings, large flat shim washers 
and retaining rings. This procedure is then repeated on the opposite 
side. Finally, Brunswick adjusts the clearance to an average of ten 
millimeters between the gutter adapter and the flat gutter, with 
slots and screws provided in both adapters. This final adjustment 
must be made at the midpoint of wagon travel to allow the necessary 
clearance at extreme front and rear positions.
    Brunswick integrates the setting table mechanical subassembly 
into the central block. This process involves the initial placement 
of spacers onto the corners of the test stand deck. The assembly 
team then delivers the setting table to the test stand deck and sets 
it onto the spacers, ensuring that the spacers are clear of the 
spotting tong attachment screws that protrude from the underside of 
the setting table. Brunswick then manually turns the setting table 
drive pulley on the left side of the drive frame to drop the left 
and right deck racks to the lowest point. The deck rack teeth are 
aligned to the drive gear teeth and plumb. Brunswick removes the hex 
nuts and lock washers from the setting table studs and installs the 
feet of the deck rack onto studs. Brunswick then rotates the bottom 
hex nuts until the first interference is detected against the deck 
rack feet. The top hardware is reinstalled and tightened. Brunswick 
manually turns the setting table drive pulley in the opposite 
direction to raise the setting table slightly so that the spacers 
can be removed. The setting table is re-lowered to the lowest 
position. Brunswick verifies that a 5 to 15 millimeter gap exists on 
all points between the setting table frame and the deck of the test 
stand. If proper clearance is not correct, or if the table frame is 
not level, appropriate adjustments are made. The top sections are 
then assembled for the telescoping square drive shafts for each of 
the setting table pivot shafts, and the spotting tongs with hardware 
are provided. Finally, Brunswick assembles and routes the setting 
table function switch and solenoid cable into the panduit channel at 
the front of the machine.
    Brunswick integrates the distributor motor of the drive frame 
subassembly into the central block. This involves the assembly and 
placement of the motor pulley to the motor shaft. A 60 Hz sheave 
must be facing away from the motor assembly. The motor and mount 
assembly must first be placed into the forward motor location in the 
left drive frame and then be assembled into the frame with bushing, 
spacer and hitch pins. Brunswick then assembles the tension spring 
from the mount to the frame. Brunswick assembles the V-belt to the 
motor pulley and drive pulley.
    The sweep motor of the drive frame subassembly is integrated 
into the central block. This involves a process identical to the 
assembly of the distributor motor described above except that the 
assembly is located in the middle motor location of the drive frame.
    The setting table step motor of the drive frame subassembly is 
integrated into the central block. This involves a process identical 
to the assembly of the distributor and sweep motors described above 
except that the assembly is located in the rear motor location of 
the drive frame.
    After assembly of the three subassemblies into the central 
block, the fully assembled central block is quality tested at the 
Michigan facility. Each central block undergoes 400 cycles of 
testing, which can take several hours.
    Counsel states that the processing performed at the Michigan 
facility requires complex and detail-oriented labor and precise 
calibrations performed by highly skilled employees.


II. Processing Performed at Bowling Facility


    At the bowling facility, the ball pit and pin elevator 
subassemblies are joined to create the six-pack component of the 
mechanical assembly. The central block, six-pack, and ball 
accelerator are then assembled to form the mechanical assemblies, 
after which the U.S.-made electrical controller assembly and other 
miscellaneous parts are integrated into the mechanical assemblies to 
form the GS-X pinsetter.
    The GS-X pinsetter is installed into the bowling facility. This 
process takes approximately 20 hours of skilled labor per pinsetter, 
using tools and large moving equipment specially constructed for 
that particular installation. The project manager and field foreman 
manage the quality-assurance procedures and certify that each 
pinsetter is installed and functioning according to Brunswick 
specifications, which counsel states surpass those of the American 
Bowling Congress.


Issue


    Whether the bowling pinsetters are substantially transformed in 
the United States so that they become products of the United States 
for U.S. Government procurement purposes.


Law and Analysis


    Under 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.), the Customs Service 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 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).
    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. See Uniroyal Inc. v. United States, 
3 CIT 220, 542 F. Supp. 1026 (CIT 1982). Assembly operations which 
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.
    Customs ruled in Headquarters Ruling Letter (``HRL'') 561734, 
dated March 22, 2001, 66 FR 17222, that Sharp multifunctional 
machines (printer, copier and fax machine) assembled in Japan were a 
product of Japan for procurement purposes. The machines were 
comprised of 227 parts (108 parts sourced from Japan, 92 parts from


[[Page 7409]]


Thailand, 3 parts from China, and 24 parts from other countries) and 
eight subassemblies, each of which was also assembled in Japan. 
Further, the scanner unit (one of the eight subassemblies) which was 
assembled in Japan was characterized as ``the heart of the 
machine.'' See also HRL 561568, dated March 22, 2001, 66 FR 17222.
    In HRL 560433, dated September 19, 1997, Customs held that the 
assembly in the United Kingdom of audio/video stereo receivers from 
16 subassemblies and other components originating from various 
countries resulted in a substantial transformation. Customs noted in 
that ruling that numerous skilled workers assembled the stereo 
receivers from numerous components and hundreds of raw materials. In 
HRL 734045, dated October 8, 1991, Customs held that foreign 
subassemblies and other components imported into Hong Kong which 
were processed and assembled with other Hong Kong components to make 
laptop and notebook personal computers were substantially 
transformed as a result of the Hong Kong operations.
    In HRL 558919, dated March 20, 1995, Customs held that an 
extruder subassembly manufactured in England was substantially 
transformed in the United States when it was wired and combined with 
U.S. components (motor, electrical controls and extruder screw) to 
create a vertical extruder. In HRL 559887, dated October 3, 1996, 
Customs held that swivel joints and torsion spring balance 
assemblies from India were substantially transformed when assembled 
in the U.S. with U.S.-origin components to produce top and bottom 
loading/unloading arms (petroleum handling equipment). Therefore, 
the loading arms were considered products of the United States. 
Customs recently ruled in HRL 562502, dated November 8, 2002, that a 
Chinese-origin transfer feeder unit and Chinese-origin outer covers 
were substantially transformed when assembled in Japan with a 
Japanese-origin laser scanner unit to produce a printer engine. 
``When taken together, the manufacture of the laser scanner unit and 
the final assembly of the printer engine is complex and 
meaningful.'' Therefore, for procurement purposes, the printer 
engines were considered to be products of Japan.
    In this case, the complex assembly of the central block from 
three subassemblies, including the incorporation of three motors 
from the drive frame subassembly into the central block, combined 
with the subsequent assembly of the central block, six-pack, ball 
accelerator, and U.S.-origin electrical controller assembly and the 
installation of the pinsetters in bowling facilities in the United 
States, when taken together, result in a substantial transformation 
of the foreign-origin subassemblies involved. The processing in the 
United States requires precise calibration and involves the assembly 
of numerous parts and subassemblies and highly skilled labor. The 
name, character and use of the foreign-origin subassemblies and 
parts change as a result of the processing and other assembly 
operations performed in the United States. Therefore, pursuant to 19 
U.S.C. 2518(4)(B), and 19 CFR 177.22(a), we find that the country of 
origin of the bowling pinsetters is the United States.


Holding


    Based on the facts presented, the components imported into the 
United States that are used in the manufacture of the bowling 
pinsetters involved in this case are substantially transformed in 
the United States. Accordingly, pursuant to 19 U.S.C. 2518(4)(B), 
and 19 CFR 177.22(a), the country of origin of the bowling 
pinsetters is the United States.
    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 Customs 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,
Michael T. Schmitz,
Assistant Commissioner, Office of Regulations & Rulings.


[FR Doc. 03-3510 Filed 2-12-03; 8:45 am]

BILLING CODE 4820-02-P