81_FR_32049 81 FR 31951 - Notice of Issuance of Final Determination Concerning Certain Intermodal Containers

81 FR 31951 - Notice of Issuance of Final Determination Concerning Certain Intermodal Containers

DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection

Federal Register Volume 81, Issue 98 (May 20, 2016)

Page Range31951-31953
FR Document2016-11947

This document provides notice that U.S. Customs and Border Protection (``CBP'') has issued a final determination concerning the country of origin of a twenty foot long intermodal container. Based upon the facts presented, CBP has concluded that the country of origin of the intermodal container is the Republic of Korea for purposes of U.S. Government procurement.

Federal Register, Volume 81 Issue 98 (Friday, May 20, 2016)
[Federal Register Volume 81, Number 98 (Friday, May 20, 2016)]
[Notices]
[Pages 31951-31953]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-11947]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning Certain 
Intermodal Containers

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security.

ACTION: Notice of final determination.

-----------------------------------------------------------------------

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 twenty foot long intermodal container. Based 
upon the facts presented, CBP has concluded that the country of origin 
of the intermodal container is the Republic of Korea for purposes of 
U.S. Government procurement.

DATES: The final determination was issued on May 13, 2016. 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 June 20, 2016.

FOR FURTHER INFORMATION CONTACT: Teresa M. Frazier, Valuation and 
Special Programs Branch, Regulations and Rulings, Office of Trade (202) 
325-0139.

SUPPLEMENTARY INFORMATION: Notice is hereby given that pursuant to 
subpart B of Part 177, U.S. Customs and Border Protection Regulations 
(19 CFR part 177, subpart B), CBP issued a final determination 
concerning the country of origin of certain intermodal containers, 
which may be offered to the U.S. Government under an undesignated 
government procurement contract. This final determination, HQ H273529, 
was issued 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 the processing in Korea results in a substantial transformation. 
Therefore, the country of origin of the intermodal container is Korea 
for purposes of U.S. Government procurement.
    Section 177.29, CBP Regulations (19 CFR 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 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: May 13, 2016.
Myles B. Harmon,
Acting Executive Director, Regulations and Rulings, Office of Trade.

H273529

May 13, 2016

OT:RR:CTF:VS H273529 TMF

CATEGORY: Country of Origin

Michael G. McManus, Duane Morris LLP, 505 9th Street NW., Suite 
1000, Washington, DC 20004-2166
Re: U.S. Government Procurement; Title III, Trade Agreements Act of 
1979 (19 U.S.C. 2511); Substantial Transformation; Twenty Foot 
Intermodal Shipping Containers

    Dear Mr. McManus: This is in response to your correspondence of 
February 12, 2016, requesting a final determination on behalf of 
your client, Sea Box, Inc. (``Sea Box''), pursuant to subpart B of 
part 177, U.S. Customs and Border Protection (CBP) Regulations (19 
CFR 177.21 et seq.). Under 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 a twenty foot long Sea Box 
shipping container that is claimed to be a product of the Republic 
of South Korea or the United States. We note that Sea Box, Inc. is a 
party-at-interest within the meaning of 19 CFR 177.22(d)(1) and is 
entitled to request this determination.

[[Page 31952]]

FACTS:

    Your client requests a country of origin determination 
concerning a twenty foot long intermodal container. You state that 
the twenty foot shipping container is a 20 foot, International 
Organization for Standardization (ISO) compliant container 
possessing the following external measurements: 19' 10.5'' in length 
with a tolerance of +0, -1/4 of an inch; 8.0' in width with a 
tolerance of +0, -3/16 of an inch; 8.0' in height with a tolerance 
of +0, -3/16 of an inch. The internal dimensions are: 19'4 11/64'' 
(L); 7'8 17/32'' (W); 7'4 3/16''(H). The 20 foot container is 
comprised of corrugated steel sides and roofing which give it a 
favorable strength to weight ratio; two sets of forklift ``pockets'' 
that permit forklifts to lift and move laden or unladen containers; 
wooden flooring tested to withstand 16,000 lbs. per square foot (144 
square inches); 24 top and bottom wall tie down steel lashing rings 
each having a capacity of 4,000 lbs.; and two vents. The twenty foot 
containers weigh 5,000 lbs. each and can accommodate a payload of 
47,910 lbs.
    You state that your client intends to assemble the containers 
from parts originating in South Korea, the People's Republic of 
China (PRC) and the United States. You state three of the four 
principal components (the right and left sidewalls and the roof) of 
the twenty foot container will be made in Korea. You state that the 
container floor is made in China as well as the two container ends, 
which includes the doors. The U.S. components are prime and finish 
coatings, decals, tie backs/welding wire, aluminum shot blast media 
and sealant.

Manufacturing Process

    You describe Sea Box's manufacturing of the container to be a 
complex industrial process which takes more than day to complete. 
You list fourteen manufacturing steps that require the manipulation 
of large components to form a structurally sound container to its 
precise size in accordance with ISO specifications.
    You state that the container must be capable of being stacked up 
to nine units high, with the base of a stack strong enough to 
support 423,280 static lbs. above it (8 containers x 58,800 lbs. per 
container). In addition, the container must be able to support a 
dynamic load taking into account a vessel's motion in conformity 
with the American Bureau of Shipping (ABS). You also advise that the 
containers must be International Container Safety Convention (CSC) 
certified and manufactured according to ISO standards.
    You state in order to be CSC certified in the United States, the 
manufacturer's facility must be pre-approved for manufacturing CSC-
certified containers by a testing and certification organization 
sanctioned by the U.S. Coast Guard. You also state that the 
manufacturer must design and build prototype containers of the 
specific kind and type proposed in the specific facility to be 
certified and then submit them for testing by the approved 
organization. You note that only after successful completion of 
these prerequisites will a company be authorized to manufacture and 
furnish containers to be included in the internationally accepted 
ISO system of transportation.

ISSUE:

    Whether the twenty foot intermodal container is considered to be 
a product of the United States or Korea for U.S. Government 
procurement purposes.

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 a 
product of a designated country for the purpose of granting waivers 
of certain ``Buy American'' restrictions on U.S. Government 
procurement.
    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 
CFR 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 CFR 
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 name, character, or use distinct from that of the 
article or articles from which it was transformed.'' See 48 CFR 
25.003.
    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 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. Substantial 
transformation occurs when an article emerges from a process with a 
new name, character or use different from that possessed by the 
article prior to processing. A substantial transformation will not 
result from a minor manufacturing or combining process that leaves 
the identity of the article intact. See United States v. Gibson-
Thomsen Co., 27 C.C.P.A. 267 (1940). 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. See Belcrest Linens v. United 
States, 6 Ct. Int'l Trade 204, 573 F. Supp. 1149 (1983), aff'd, 741 
F.2d 1368 (Fed. Cir. 1984). Additionally, factors such as the 
resources expended on product design and development, the extent and 
nature of post-assembly inspection and testing procedures, and 
worker skill required during the actual manufacturing process will 
be considered when determining whether a substantial transformation 
has occurred. No one factor is determinative.
    In Uniroyal, Inc. v. United States, the Court of International 
Trade held that no substantial transformation occurred because the 
attachment of a footwear upper from Indonesia to its outsole in the 
United States was a minor manufacturing or combining process which 
left the identity of the upper intact. Uniroyal, Inc. v. United 
States, 3 CIT 220, 224, 542 F. Supp. 1026, 1029 (1982), aff'd, 702 
F.2d 1022 (Fed. Cir. 1983). The court found that the upper was 
readily recognizable as a distinct item apart from the outsole to 
which it was attached, it did not lose its identity in the 
manufacture of the finished shoe in the United States, and the upper 
did not undergo a physical change or a change in use. Also, under 
Uniroyal, the change in name from ``upper'' to ``shoe'' was not 
significant. The court concluded that the upper was the essence of 
the completed shoe, and was not substantially transformed.
    In National Hand Tool Corp. v. United States, 16 CIT 308 (1992), 
aff'd, 989 F.2d 1201 (Fed. Cir. 1993), the court considered sockets 
and flex handles which were either cold formed or hot forged into 
their final shape prior to importation, speeder handles which were 
reshaped by a power press after importation, and the grip of flex 
handles which were knurled in the United States. The imported 
articles were heat treated, cleaned by sandblasting, tumbling, and/
or chemical vibration before being electroplated. In certain 
instances, various components were assembled together which the 
court stated required some skill and dexterity. The court determined 
that the imported articles were not substantially transformed and 
that they remained products of Taiwan. In making its determination, 
the court focused on the fact that the components had been cold 
formed or hot forged ``into their final shape before importation'', 
and that ``the form of the components remained the same'' after the 
assembly and heat treatment processes performed in the United 
States.
    It is your position that the country of origin of the intermodal 
containers is South Korea because three of the container's 
components (the roof and two side panels), like National Hand Tool 
and Uniroyal, impart the container's essential character because 
they are already formed in the final shape prior to importation into 
the United States. You also state that the three Korean components--
the roof and side panels predominate in value since they cost more 
than the Chinese components (front end, door end and floor). In sum, 
you argue that the country of origin is South Korea, or in the 
alternative, the United States.
    In HQ 555111, dated March 14, 1989, CBP determined that shearing 
steel sheets to size, along with bending, notching or drilling of 
the sheared pieces constituted a substantial transformation, such 
that the container parts were different in character and use from 
the originally imported steel sheets. It was also

[[Page 31953]]

determined that the container parts were distinct articles of 
commerce that were bought and sold in the trade. CBP also found a 
second substantial transformation occurred when the container parts 
were assembled into finished steel storage containers. It was also 
determined that the container parts were distinct articles of 
commerce that were bought and sold in the trade. CBP found that the 
assembly was complex, involving a large number of components and a 
significant number of different operations, requiring a relatively 
significant period of time as well as skill, attention to detail and 
quality control.
    In HQ 557607, dated December 18, 1993, CBP determined that steel 
plates imported into Mexico and used in the production of certain 
railway freight cars (referred therein as ``railcar tanks'') 
underwent a double substantial transformation. The steel plates were 
sandblasted to remove any foreign debris and particles; cut to same 
length and width in varying sizes; rolled and cold-formed into 
cylindrical or near-cylindrical shape; tack-welded to hold their 
shape with seams, then permanently welded using a design-specific 
welding fixture. Thereafter, the rings were permanently welded in 
place; and holes were cut into the tank shell in accordance with 
design specifications for the placement of miscellaneous parts that 
were also permanently welded. The seams were then subject to X-ray 
analysis to ensure against any defects, followed by painting with 
rust-resistant paint primer. CBP determined that the welding and 
complex assembling of the steel container parts resulted in a new, 
finished and different article of commerce possessing a distinct 
name, character and use.
    We find that the essential character of the container is 
imparted by the Korean-origin roof, and two side panels, which, as 
in National Hand Tool, are already formed in their final shapes 
prior to importation. Further, the twenty foot containers are 
similar to the final goods discussed in HQ 555111 and HQ 567607. 
While these two decisions pertained to the Generalized System of 
Preferences (GSP), and the GSP often considers whether the second 
substantial transformation is not just a ``pass-through'' operation, 
we note that in those two decisions it was important that the 
components were formed and created in the final country of assembly. 
Similarly, in this case we find that the Sea Box container will 
mostly be comprised of components from Korea, especially when 
comparing these components to the container's finished surface area, 
such that the origin of the finished container may be considered 
Korea. As noted in our ruling to you, HQ H267876, dated December 23, 
2015, the operations in the United States are not sufficient to 
result in a substantial transformation; therefore, we find that the 
country of origin of the finished twenty foot intermodal containers 
will be Korea for government procurement purposes.

HOLDING:

    Based upon the specific facts of this case, we find that the 
country of origin of the intermodal containers for purposes of U.S. 
Government procurement is Korea.
    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 of publication of the Federal 
Register Notice referenced above, seek judicial review of this final 
determination before the Court of International Trade.

Sincerely,

Myles B. Harmon,
Acting Executive Director, Regulations and Rulings, Office of Trade.

[FR Doc. 2016-11947 Filed 5-19-16; 8:45 am]
 BILLING CODE P



                                                                                   Federal Register / Vol. 81, No. 98 / Friday, May 20, 2016 / Notices                                                 31951

                                                    Place: Embassy Suites Alexandria Old                    Date: June 14, 2016.                                origin of certain intermodal containers,
                                                  Town, 1900 Diagonal Road, Alexandria, VA                  Time: 11:00 a.m. to 5:00 p.m.                       which may be offered to the U.S.
                                                  22314.                                                    Agenda: To review and evaluate grant                Government under an undesignated
                                                    Contact Person: Elizabeth A. Webber,                  applications.
                                                                                                                                                                government procurement contract. This
                                                  Ph.D., Scientific Review Administrator,                   Place: National Institutes of Health, 4H100,
                                                  Scientific Review Branch, NINDS/NIH/                    5601 Fishers Lane, Rockville, MD 20892,               final determination, HQ H273529, was
                                                  DHHS, Neuroscience Center, 6001 Executive               (Telephone Conference Call).                          issued under procedures set forth at 19
                                                  Blvd., Suite 3204, MSC 9529, Bethesda, MD                 Contact Person: Jay R. Radke, Ph.D.,                CFR part 177, subpart B, which
                                                  20892–9529, 301–496–1917, webbere@                      Scientific Review Officer, Scientific Review          implements Title III of the Trade
                                                  mail.nih.gov.                                           Program, Division of Extramural Activities,           Agreements Act of 1979, as amended
                                                    Name of Committee: National Institute of              Room #3G11B, National Institutes of Health,           (19 U.S.C. 2511–18). In the final
                                                  Neurological Disorders and Stroke Special               NIAID, 5601 Fishers Lane MSC–9823,                    determination, CBP concluded that the
                                                  Emphasis Panel; NINDS Diversity R25                     Bethesda, MD 20892–9823, (240) 669–5046,
                                                                                                                                                                processing in Korea results in a
                                                  Review.                                                 jay.radke@nih.gov.
                                                                                                                                                                substantial transformation. Therefore,
                                                    Date: June 30, 2016.                                  (Catalogue of Federal Domestic Assistance
                                                    Time: 10:00 a.m. to 12:00 p.m.                        Program Nos. 93.855, Allergy, Immunology,
                                                                                                                                                                the country of origin of the intermodal
                                                    Agenda: To review and evaluate grant                  and Transplantation Research; 93.856,                 container is Korea for purposes of U.S.
                                                  applications.                                           Microbiology and Infectious Diseases                  Government procurement.
                                                    Place: National Institutes of Health,                 Research, National Institutes of Health, HHS)            Section 177.29, CBP Regulations (19
                                                  Neuroscience Center, 6001 Executive                       Dated: May 16, 2016.                                CFR 177.29), provides that a notice of
                                                  Boulevard, Rockville, MD 20852, (Telephone
                                                                                                          Natasha M. Copeland,                                  final determination shall be published
                                                  Conference Call).
                                                    Contact Person: Ernest W. Lyons, Ph.D.,               Program Analyst, Office of Federal Advisory           in the Federal Register within 60 days
                                                  Scientific Review Administrator, Scientific             Committee Policy.                                     of the date the final determination is
                                                  Review Branch, NINDS/NIH/DHHS,                          [FR Doc. 2016–11901 Filed 5–19–16; 8:45 am]           issued. Section 177.30, CBP Regulations
                                                  Neuroscience Center, 6001 Executive Blvd.,              BILLING CODE 4140–01–P
                                                                                                                                                                (19 CFR 177.30), provides that any
                                                  Suite 3204, MSC 9529, Bethesda, MD 20892–                                                                     party-at-interest, as defined in 19 CFR
                                                  9529, 301–496–4056, lyonse@ninds.nih.gov.                                                                     177.22(d), may seek judicial review of a
                                                  (Catalogue of Federal Domestic Assistance                                                                     final determination within 30 days of
                                                  Program Nos. 93.853, Clinical Research                  DEPARTMENT OF HOMELAND
                                                                                                          SECURITY                                              publication of such determination in the
                                                  Related to Neurological Disorders; 93.854,                                                                    Federal Register.
                                                  Biological Basis Research in the
                                                  Neurosciences, National Institutes of Health,           U.S. Customs and Border Protection                      Dated: May 13, 2016.
                                                  HHS)                                                                                                          Myles B. Harmon,
                                                                                                          Notice of Issuance of Final
                                                    Dated: May 16, 2016.                                                                                        Acting Executive Director, Regulations and
                                                                                                          Determination Concerning Certain                      Rulings, Office of Trade.
                                                  Sylvia L. Neal,                                         Intermodal Containers
                                                  Program Analyst, Office of Federal Advisory                                                                   H273529
                                                  Committee Policy.                                       AGENCY:  U.S. Customs and Border                      May 13, 2016
                                                  [FR Doc. 2016–11903 Filed 5–19–16; 8:45 am]
                                                                                                          Protection, Department of Homeland
                                                                                                                                                                OT:RR:CTF:VS H273529 TMF
                                                                                                          Security.
                                                  BILLING CODE 4140–01–P                                                                                        CATEGORY: Country of Origin
                                                                                                          ACTION: Notice of final determination.
                                                                                                                                                                Michael G. McManus, Duane Morris LLP, 505
                                                                                                          SUMMARY:    This document provides                          9th Street NW., Suite 1000, Washington,
                                                  DEPARTMENT OF HEALTH AND                                                                                            DC 20004–2166
                                                                                                          notice that U.S. Customs and Border
                                                  HUMAN SERVICES                                                                                                Re: U.S. Government Procurement; Title III,
                                                                                                          Protection (‘‘CBP’’) has issued a final
                                                                                                          determination concerning the country of                     Trade Agreements Act of 1979 (19 U.S.C.
                                                  National Institutes of Health                                                                                       2511); Substantial Transformation;
                                                                                                          origin of a twenty foot long intermodal
                                                                                                                                                                      Twenty Foot Intermodal Shipping
                                                  National Institute of Allergy and                       container. Based upon the facts                             Containers
                                                  Infectious Diseases Notice of Closed                    presented, CBP has concluded that the
                                                                                                                                                                   Dear Mr. McManus: This is in response to
                                                  Meeting                                                 country of origin of the intermodal                   your correspondence of February 12, 2016,
                                                                                                          container is the Republic of Korea for                requesting a final determination on behalf of
                                                    Pursuant to section 10(d) of the                      purposes of U.S. Government
                                                  Federal Advisory Committee Act, as                                                                            your client, Sea Box, Inc. (‘‘Sea Box’’),
                                                                                                          procurement.                                          pursuant to subpart B of part 177, U.S.
                                                  amended (5 U.S.C. App.), notice is
                                                                                                          DATES: The final determination was                    Customs and Border Protection (CBP)
                                                  hereby given of the following meeting.                                                                        Regulations (19 CFR 177.21 et seq.). Under
                                                    The meeting will be closed to the                     issued on May 13, 2016. A copy of the
                                                                                                          final determination is attached. Any                  pertinent regulations, which implement Title
                                                  public in accordance with the                                                                                 III of the Trade Agreements Act of 1979, as
                                                  provisions set forth in sections                        party-at-interest, as defined in 19 CFR
                                                                                                                                                                amended (19 U.S.C. 2511 et seq.), CBP issues
                                                  552b(c)(4) and 552b(c)(6), Title 5 U.S.C.,              177.22(d), may seek judicial review of                country of origin advisory rulings and final
                                                  as amended. The grant applications and                  this final determination within June 20,              determinations as to whether an article is, or
                                                  the discussions could disclose                          2016.                                                 would be, a product of a designated country
                                                  confidential trade secrets or commercial                FOR FURTHER INFORMATION CONTACT:                      or instrumentality for the purpose of granting
                                                  property such as patentable material,                   Teresa M. Frazier, Valuation and                      waivers of certain ‘‘Buy American’’
                                                  and personal information concerning                     Special Programs Branch, Regulations                  restrictions in U.S. law or practice for
                                                  individuals associated with the grant                   and Rulings, Office of Trade (202) 325–               products offered for sale to the U.S.
mstockstill on DSK3G9T082PROD with NOTICES




                                                                                                          0139.                                                 Government.
                                                  applications, the disclosure of which
                                                                                                                                                                   This final determination concerns a twenty
                                                  would constitute a clearly unwarranted                  SUPPLEMENTARY INFORMATION: Notice is
                                                                                                                                                                foot long Sea Box shipping container that is
                                                  invasion of personal privacy.                           hereby given that pursuant to subpart B               claimed to be a product of the Republic of
                                                    Name of Committee: National Institute of              of Part 177, U.S. Customs and Border                  South Korea or the United States. We note
                                                  Allergy and Infectious Diseases Special                 Protection Regulations (19 CFR part 177,              that Sea Box, Inc. is a party-at-interest within
                                                  Emphasis Panel; Rapid Assessment of Zika                subpart B), CBP issued a final                        the meaning of 19 CFR 177.22(d)(1) and is
                                                  Virus (ZIKV) Complications (R21).                       determination concerning the country of               entitled to request this determination.



                                             VerDate Sep<11>2014   17:40 May 19, 2016   Jkt 238001   PO 00000   Frm 00043   Fmt 4703   Sfmt 4703   E:\FR\FM\20MYN1.SGM   20MYN1


                                                  31952                            Federal Register / Vol. 81, No. 98 / Friday, May 20, 2016 / Notices

                                                  FACTS:                                                  included in the internationally accepted ISO          resources expended on product design and
                                                     Your client requests a country of origin             system of transportation.                             development, the extent and nature of post-
                                                  determination concerning a twenty foot long                                                                   assembly inspection and testing procedures,
                                                                                                          ISSUE:                                                and worker skill required during the actual
                                                  intermodal container. You state that the
                                                  twenty foot shipping container is a 20 foot,              Whether the twenty foot intermodal                  manufacturing process will be considered
                                                  International Organization for                          container is considered to be a product of the        when determining whether a substantial
                                                  Standardization (ISO) compliant container               United States or Korea for U.S. Government            transformation has occurred. No one factor is
                                                  possessing the following external                       procurement purposes.                                 determinative.
                                                  measurements: 19′ 10.5″ in length with a                                                                         In Uniroyal, Inc. v. United States, the Court
                                                                                                          LAW AND ANALYSIS:
                                                  tolerance of +0, ¥1/4 of an inch; 8.0′ in                                                                     of International Trade held that no
                                                                                                             Pursuant to Subpart B of Part 177, 19 CFR          substantial transformation occurred because
                                                  width with a tolerance of +0, ¥3/16 of an
                                                                                                          177.21 et seq., which implements Title III of         the attachment of a footwear upper from
                                                  inch; 8.0′ in height with a tolerance of +0,
                                                  ¥3/16 of an inch. The internal dimensions               the Trade Agreements Act of 1979, as                  Indonesia to its outsole in the United States
                                                  are: 19′4 11/64″ (L); 7′8 17/32″ (W); 7′4 3/            amended (19 U.S.C. 2511 et seq.), CBP issues          was a minor manufacturing or combining
                                                  16″(H). The 20 foot container is comprised of           country-of-origin advisory rulings and final          process which left the identity of the upper
                                                  corrugated steel sides and roofing which give           determinations as to whether an article is a          intact. Uniroyal, Inc. v. United States, 3 CIT
                                                  it a favorable strength to weight ratio; two            product of a designated country for the               220, 224, 542 F. Supp. 1026, 1029 (1982),
                                                  sets of forklift ‘‘pockets’’ that permit forklifts      purpose of granting waivers of certain ‘‘Buy          aff’d, 702 F.2d 1022 (Fed. Cir. 1983). The
                                                  to lift and move laden or unladen containers;           American’’ restrictions on U.S. Government            court found that the upper was readily
                                                  wooden flooring tested to withstand 16,000              procurement.                                          recognizable as a distinct item apart from the
                                                  lbs. per square foot (144 square inches); 24               In rendering final determinations for              outsole to which it was attached, it did not
                                                  top and bottom wall tie down steel lashing              purposes of U.S. Government procurement,              lose its identity in the manufacture of the
                                                  rings each having a capacity of 4,000 lbs.;             CBP applies the provisions of Subpart B of            finished shoe in the United States, and the
                                                  and two vents. The twenty foot containers               Part 177 consistent with the Federal                  upper did not undergo a physical change or
                                                  weigh 5,000 lbs. each and can accommodate               Procurement Regulations. See 19 CFR 177.21.           a change in use. Also, under Uniroyal, the
                                                  a payload of 47,910 lbs.                                In this regard, CBP recognizes that the               change in name from ‘‘upper’’ to ‘‘shoe’’ was
                                                     You state that your client intends to                Federal Acquisition Regulations restrict the          not significant. The court concluded that the
                                                  assemble the containers from parts                      U.S. Government’s purchase of products to             upper was the essence of the completed shoe,
                                                  originating in South Korea, the People’s                U.S.-made or designated country end                   and was not substantially transformed.
                                                  Republic of China (PRC) and the United                  products for acquisitions subject to the Trade           In National Hand Tool Corp. v. United
                                                  States. You state three of the four principal           Agreements Act. See 48 CFR 25.403(c)(1).              States, 16 CIT 308 (1992), aff’d, 989 F.2d
                                                  components (the right and left sidewalls and            The Federal Acquisition Regulations define            1201 (Fed. Cir. 1993), the court considered
                                                  the roof) of the twenty foot container will be          ‘‘U.S.-made end product’’ as ‘‘an article that        sockets and flex handles which were either
                                                  made in Korea. You state that the container             is mined, produced, or manufactured in the            cold formed or hot forged into their final
                                                  floor is made in China as well as the two               United States or that is substantially                shape prior to importation, speeder handles
                                                  container ends, which includes the doors.               transformed in the United States into a new           which were reshaped by a power press after
                                                  The U.S. components are prime and finish                and different article of commerce with name,          importation, and the grip of flex handles
                                                  coatings, decals, tie backs/welding wire,               character, or use distinct from that of the           which were knurled in the United States. The
                                                  aluminum shot blast media and sealant.                  article or articles from which it was                 imported articles were heat treated, cleaned
                                                                                                          transformed.’’ See 48 CFR 25.003.                     by sandblasting, tumbling, and/or chemical
                                                  Manufacturing Process                                      An article is a product of a country or            vibration before being electroplated. In
                                                    You describe Sea Box’s manufacturing of               instrumentality only if (i) it is wholly the          certain instances, various components were
                                                  the container to be a complex industrial                growth, product, or manufacture of that               assembled together which the court stated
                                                  process which takes more than day to                    country or instrumentality, or (ii) in the case       required some skill and dexterity. The court
                                                  complete. You list fourteen manufacturing               of an article which consists in whole or in           determined that the imported articles were
                                                  steps that require the manipulation of large            part of materials from another country or             not substantially transformed and that they
                                                  components to form a structurally sound                 instrumentality, it has been substantially            remained products of Taiwan. In making its
                                                  container to its precise size in accordance             transformed into a new and different article          determination, the court focused on the fact
                                                  with ISO specifications.                                of commerce with a name, character, or use            that the components had been cold formed or
                                                    You state that the container must be                  distinct from that of the article or articles         hot forged ‘‘into their final shape before
                                                  capable of being stacked up to nine units               from which it was so transformed. See also            importation’’, and that ‘‘the form of the
                                                  high, with the base of a stack strong enough            19 CFR 177.22(a).                                     components remained the same’’ after the
                                                  to support 423,280 static lbs. above it (8                 In order to determine whether a substantial        assembly and heat treatment processes
                                                  containers × 58,800 lbs. per container). In             transformation occurs when components of              performed in the United States.
                                                  addition, the container must be able to                 various origins are assembled into completed             It is your position that the country of origin
                                                  support a dynamic load taking into account              products, CBP considers the totality of the           of the intermodal containers is South Korea
                                                  a vessel’s motion in conformity with the                circumstances and makes such                          because three of the container’s components
                                                  American Bureau of Shipping (ABS). You                  determinations on a case-by-case basis.               (the roof and two side panels), like National
                                                  also advise that the containers must be                 Substantial transformation occurs when an             Hand Tool and Uniroyal, impart the
                                                  International Container Safety Convention               article emerges from a process with a new             container’s essential character because they
                                                  (CSC) certified and manufactured according              name, character or use different from that            are already formed in the final shape prior to
                                                  to ISO standards.                                       possessed by the article prior to processing.         importation into the United States. You also
                                                    You state in order to be CSC certified in             A substantial transformation will not result          state that the three Korean components—the
                                                  the United States, the manufacturer’s facility          from a minor manufacturing or combining               roof and side panels predominate in value
                                                  must be pre-approved for manufacturing                  process that leaves the identity of the article       since they cost more than the Chinese
                                                  CSC-certified containers by a testing and               intact. See United States v. Gibson-Thomsen           components (front end, door end and floor).
                                                  certification organization sanctioned by the            Co., 27 C.C.P.A. 267 (1940). In determining           In sum, you argue that the country of origin
                                                  U.S. Coast Guard. You also state that the               whether the combining of parts or materials           is South Korea, or in the alternative, the
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                                                  manufacturer must design and build                      constitutes a substantial transformation, the         United States.
                                                  prototype containers of the specific kind and           determinative issue is the extent of                     In HQ 555111, dated March 14, 1989, CBP
                                                  type proposed in the specific facility to be            operations performed and whether the parts            determined that shearing steel sheets to size,
                                                  certified and then submit them for testing by           lose their identity and become an integral            along with bending, notching or drilling of
                                                  the approved organization. You note that                part of the new article. See Belcrest Linens          the sheared pieces constituted a substantial
                                                  only after successful completion of these               v. United States, 6 Ct. Int’l Trade 204, 573 F.       transformation, such that the container parts
                                                  prerequisites will a company be authorized              Supp. 1149 (1983), aff’d, 741 F.2d 1368 (Fed.         were different in character and use from the
                                                  to manufacture and furnish containers to be             Cir. 1984). Additionally, factors such as the         originally imported steel sheets. It was also



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                                                                                   Federal Register / Vol. 81, No. 98 / Friday, May 20, 2016 / Notices                                             31953

                                                  determined that the container parts were                  Notice of this final determination will be          Monday, May 30, 2016. Written
                                                  distinct articles of commerce that were                 given in the Federal Register, as required by         comments to be considered by the
                                                  bought and sold in the trade. CBP also found            19 CFR 177.29. Any party-at-interest other            committee at the time of the meeting
                                                  a second substantial transformation occurred            than the party which requested this final
                                                                                                                                                                must be received by Thursday, June 2,
                                                  when the container parts were assembled                 determination may request, pursuant to 19
                                                  into finished steel storage containers. It was          CFR 177.31, that CBP reexamine the matter             2016, identified by Docket ID FEMA–
                                                  also determined that the container parts were           anew and issue a new final determination.             2014–0022, and submitted by one of the
                                                  distinct articles of commerce that were                 Pursuant to 19 CFR 177.30, any party-at-              following methods:
                                                  bought and sold in the trade. CBP found that            interest may, within 30 days of publication              • Federal eRulemaking Portal: http://
                                                  the assembly was complex, involving a large             of the Federal Register Notice referenced             www.regulations.gov. Follow the
                                                  number of components and a significant                  above, seek judicial review of this final             instructions for submitting comments.
                                                  number of different operations, requiring a             determination before the Court of                        • Email: Address the email TO:
                                                  relatively significant period of time as well           International Trade.                                  FEMA–RULES@fema.dhs.gov and CC:
                                                  as skill, attention to detail and quality               Sincerely,                                            FEMA–TMAC@fema.dhs.gov. Include
                                                  control.                                                Myles B. Harmon,
                                                     In HQ 557607, dated December 18, 1993,                                                                     the docket number in the subject line of
                                                                                                          Acting Executive Director, Regulations and            the message. Include name and contact
                                                  CBP determined that steel plates imported               Rulings, Office of Trade.
                                                  into Mexico and used in the production of                                                                     detail in the body of the email.
                                                  certain railway freight cars (referred therein          [FR Doc. 2016–11947 Filed 5–19–16; 8:45 am]              • Mail: Regulatory Affairs Division,
                                                  as ‘‘railcar tanks’’) underwent a double                BILLING CODE P                                        Office of Chief Counsel, FEMA, 500 C
                                                  substantial transformation. The steel plates                                                                  Street SW., Room 8NE, Washington, DC
                                                  were sandblasted to remove any foreign                                                                        20472–3100.
                                                  debris and particles; cut to same length and            DEPARTMENT OF HOMELAND                                   Instructions: All submissions received
                                                  width in varying sizes; rolled and cold-                SECURITY                                              must include the words ‘‘Federal
                                                  formed into cylindrical or near-cylindrical
                                                  shape; tack-welded to hold their shape with
                                                                                                                                                                Emergency Management Agency’’ and
                                                                                                          Federal Emergency Management                          the docket number for this action.
                                                  seams, then permanently welded using a                  Agency
                                                  design-specific welding fixture. Thereafter,                                                                  Comments received will be posted
                                                  the rings were permanently welded in place;             [Docket ID FEMA–2014–0022]                            without alteration at http://
                                                  and holes were cut into the tank shell in                                                                     www.regulations.gov, including any
                                                  accordance with design specifications for the           Technical Mapping Advisory Council                    personal information provided. Docket:
                                                  placement of miscellaneous parts that were                                                                    For docket access to read background
                                                  also permanently welded. The seams were                 AGENCY:  Federal Emergency
                                                                                                          Management Agency, DHS.                               documents or comments received by the
                                                  then subject to X-ray analysis to ensure                                                                      TMAC, go to http://www.regulations.gov
                                                  against any defects, followed by painting               ACTION: Committee Management; Notice
                                                  with rust-resistant paint primer. CBP
                                                                                                                                                                and search for the Docket ID FEMA–
                                                                                                          of Federal Advisory Committee Meeting.
                                                  determined that the welding and complex                                                                       2014–0022.
                                                  assembling of the steel container parts                 SUMMARY:    The Federal Emergency                        A public comment period will be held
                                                  resulted in a new, finished and different               Management Agency (FEMA) Technical                    on June 6, 2016, from 11:00–11:20 a.m.
                                                  article of commerce possessing a distinct               Mapping Advisory Council (TMAC) will                  and June 7, 2016 from 11:00–11:20 a.m.
                                                  name, character and use.                                meet via conference call on June 6 and                EDT. Speakers are requested to limit
                                                     We find that the essential character of the          7, 2016. The meeting will be open to the              their comments to no more than two
                                                  container is imparted by the Korean-origin                                                                    minutes. Each public comment period
                                                                                                          public.
                                                  roof, and two side panels, which, as in                                                                       will not exceed 20 minutes. Please note
                                                  National Hand Tool, are already formed in               DATES: The TMAC will meet via
                                                  their final shapes prior to importation.                conference call on Monday, June 6, 2016               that the public comment periods may
                                                  Further, the twenty foot containers are                 from 10:00 a.m. to 5:00 p.m. Eastern                  end before the time indicated, following
                                                  similar to the final goods discussed in HQ              Daylight Time (EDT), and on Tuesday,                  the last call for comments. Contact the
                                                  555111 and HQ 567607. While these two                   June 7, 2016 from 10:00 a.m. to 5:00                  individual listed below to register as a
                                                  decisions pertained to the Generalized                  p.m. EDT. Please note that the meeting                speaker by close of business on
                                                  System of Preferences (GSP), and the GSP                will close early if the TMAC has                      Thursday, June 2, 2016.
                                                  often considers whether the second                                                                            FOR FURTHER INFORMATION CONTACT:
                                                  substantial transformation is not just a ‘‘pass-
                                                                                                          completed its business.
                                                                                                          ADDRESSES: For information on how to                  Kathleen Boyer, Designated Federal
                                                  through’’ operation, we note that in those two
                                                  decisions it was important that the                     access to the conference call,                        Officer for the TMAC, FEMA, 1800
                                                  components were formed and created in the               information on services for individuals               South Bell Street Arlington, VA 22202,
                                                  final country of assembly. Similarly, in this           with disabilities, or to request special              telephone (202) 646–4023, and email
                                                  case we find that the Sea Box container will            assistance for the meeting, contact the               kathleen.boyer@fema.dhs.gov. The
                                                  mostly be comprised of components from                  person listed in FOR FURTHER                          TMAC Web site is: http://
                                                  Korea, especially when comparing these                  INFORMATION CONTACT below as soon as                  www.fema.gov/TMAC.
                                                  components to the container’s finished
                                                                                                          possible. Members of the public who                   SUPPLEMENTARY INFORMATION: Notice of
                                                  surface area, such that the origin of the
                                                  finished container may be considered Korea.             wish to dial in for the meeting must                  this meeting is given under the Federal
                                                  As noted in our ruling to you, HQ H267876,              register in advance by sending an email               Advisory Committee Act, 5 U.S.C.
                                                  dated December 23, 2015, the operations in              to FEMA–TMAC@fema.dhs.gov                             Appendix.
                                                  the United States are not sufficient to result          (attention Kathleen Boyer) by 11 a.m.                    As required by the Biggert-Waters
                                                  in a substantial transformation; therefore, we          EDT on Wednesday, June 1, 2016.                       Flood Insurance Reform Act of 2012, the
                                                  find that the country of origin of the finished            To facilitate public participation,                TMAC makes recommendations to the
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                                                  twenty foot intermodal containers will be               members of the public are invited to                  FEMA Administrator on: (1) How to
                                                  Korea for government procurement purposes.              provide written comments on the issues                improve, in a cost-effective manner, the
                                                  HOLDING:                                                to be considered by the TMAC, as listed               (a) accuracy, general quality, ease of use,
                                                    Based upon the specific facts of this case,           in the SUPPLEMENTARY INFORMATION                      and distribution and dissemination of
                                                  we find that the country of origin of the               section below. The Agenda and other                   flood insurance rate maps and risk data;
                                                  intermodal containers for purposes of U.S.              associated material will be available for             and (b) performance metrics and
                                                  Government procurement is Korea.                        review at www.fema.gov/TMAC by                        milestones required to effectively and


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Document Created: 2016-05-20 01:59:49
Document Modified: 2016-05-20 01:59:49
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionNotices
ActionNotice of final determination.
DatesThe final determination was issued on May 13, 2016. 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 June 20, 2016.
ContactTeresa M. Frazier, Valuation and Special Programs Branch, Regulations and Rulings, Office of Trade (202) 325-0139.
FR Citation81 FR 31951 

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