81 FR 787 - 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 4 (January 7, 2016)

Page Range		787-789
FR Document		2015-33244
This document provides notice that U.S. Customs and Border Protection (``CBP'') has issued a final determination concerning the country of origin of certain intermodal containers. Based upon the facts presented, CBP has concluded that the country of origin of the intermodal containers is the country of origin of the imported panels for purposes of U.S. Government procurement.
Federal Register, Volume 81 Issue 4 (Thursday, January 7, 2016)
[Federal Register Volume 81, Number 4 (Thursday, January 7, 2016)]
[Notices]
[Pages 787-789]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-33244]


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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.

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SUMMARY: This document provides notice that U.S. Customs and Border 
Protection (``CBP'') has issued a final determination concerning the 
country of origin of certain intermodal containers. Based upon the 
facts presented, CBP has concluded that the country of origin of the 
intermodal containers is the country of origin of the imported panels 
for purposes of U.S. Government procurement.

DATES: The final determination was issued on December 23, 2015. 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 February 8, 2016.

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

SUPPLEMENTARY INFORMATION: Notice is hereby given that on December 23, 
2015, 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 H267876, 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 the United States does not result in a 
substantial transformation. Therefore, the country of origin of the 
intermodal containers is the country of origin of the imported panels 
for purposes of U.S. Government procurement 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: December 23, 2015.
Myles B. Harmon,
Acting Executive Director, Regulations and Rulings, Office of 
International Trade.

H267876

OT:RR:CTF:VS H267876 TMF

CATEGORY: Country of Origin

Michael G. McManus
Duane Morris LLP
505 9th Street, N. W., 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; Intermodal 
Shipping Containers

Dear Mr. McManus:

    This is in response to your correspondence of July 29, 2015, 
supplemented by your letter of September 30, 2015, requesting a 
final determination on behalf of 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 II 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 the country of origin of Sea 
Box shipping containers. We note that Sea Box, Inc. is a

[[Page 788]]

party-at-interest within the meaning of 19 CFR 177.22(d)(1) and is 
entitled to request this final determination. A meeting was held 
November 4, 2015.

FACTS:

    You state that the subject containers are made in various sizes: 
20 foot long; Bicon; Tricon and Quadcon. The 20' shipping container 
is considered to be a standard unit in the shipping industry.

1. Twenty Foot Shipping Containers

    You state that a 20 foot ISO \1\-compliant container has the 
following external measurements:
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    \1\ International Organization for Standardization set standard 
sizes and manufacturing specifications for all containers.
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    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 gives 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.

2. Bicons

    You state that a Bicon is a shipping container that is 
approximately half the size of a 20 foot container and manufactured 
to precise dimensions such that when two are linked together by 
connecting couplers, they form a 20 foot equivalent unit (``TEU'') 
and may be transported as if the combination were a single 20 foot 
container. The ISO-compliant Bicon container has the following 
external dimensions: 9'9 3/4'' in length with a tolerance of +0, -3/
16 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: 9'3 1/2'' (L); 7'8 17/32'' (W); 7'4 3/16'' 
(H). You state that the Bicon has similar features to the 20 foot 
unit, except that the Bicon only has one set of forklift ``pockets'' 
and uses several tie down steel lashings. You state that the Bicon 
has a weight of 2,900 lbs. and can accommodate a payload of 23,555 
lbs., and has a storage capacity of 527 cubic feet.

3. Tricons

    You state that a Tricon is approximately one-third the size of a 
20 foot container and that it is manufactured to precise dimensions 
such that when three Tricons are linked together by connecting 
couplers, a TEU is formed and may be transported as if the 
combination was a single 20 foot container. The ISO-compliant Tricon 
container has the following external dimensions: 6'5 9/16'' in 
length with a tolerance of +0, -3/16 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: 6'3 25/64'' 
(L); 7'7 22/32'' (W); 7'5 9/64'' (H). You state that the Tricon has 
similar features to the 20 foot unit and the Bicon, except that 
instead of a wooden flooring, the Tricon has heavy duty steel 
flooring. You state the Tricon has a weight of 2,600 lbs. each laden 
and may accommodate a payload of 13,300 lbs., and has a storage 
capacity of 356 cubic feet.

4. Quadcons

    You state that a Quadcon is approximately one-fourth the size of 
a twenty foot container and that it is manufactured to precise 
dimension such that when four Quadcons are linked together by 
connecting couplers, a TEU is formed and may be transported as if 
the combination were a single 20 foot container. The ISO-compliant 
Quadcon container has the following external dimensions: 4'9 7/16'' 
in length with a tolerance of +0, -3/16 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: 4'7 
3/4'' (L); 7'6 9/16'' (W); 7'5'' (H). You state that the Quadcon has 
similar features to the Tricon, except that it also has swing doors 
on both sides for convenient access. You state the Quadcon has a 
weight of 2,300 lbs. each unladed and may accommodate a payload of 
8,900 lbs., and has a storage capacity of 260 cubic feet.

Manufacturing Process

    In your submission, you described Sea Box's manufacturing 
facilities to include a separate, free-standing, testing center with 
equipment capable of testing containers for ISO compliance to 1.8 
times the maximum required load (which is equivalent to 846,720 
lbs.). You advise that the manufacturing process requires the 
manipulation of large components to form a structurally sound 
container to its precise size in accordance with ISO specifications, 
allowing containers to be capable of transport by rail, truck and 
ship with uniform fitting on preexisting truck and rail support 
structures. You provided a list of the 43 components of the 
containers. We note that that the front wall panel, side wall panel, 
right-hand door, right-hand door gasket, left-hand door gasket, roof 
panel, floor panel, lashing rings, front corner post tie downs, and 
corner blocks, all originate from one foreign country. Connecting 
couplers, hand assembly restraint bar, tie-back, rivets nuts and 
bolts, hinges, amongst other components, originate from the U.S. You 
indicate that by using grinders and/or cutting wheels, the 
components are ground to bare steel where welding is required. 
Specifically, the floor sections, wall section, front and rear-end 
sections, and roof section are ground to bare steel where welding is 
required. Next, the components are loaded into the Jig and once the 
dimensional tolerances are verified and adjusted, the components are 
tacked and stich-welded together, vertical seams are welded, and all 
outside components are fully welded. If required, roof corner plates 
and floor gussets are welded, and door tieback hooks are welded. 
Next, pilot holes are drilled into the floor and steel cross-members 
and doors are secured. The container is then moved to the blast 
booth for painting with primer and a top coat. You indicate that the 
particular steel that is used in the roof and sides is not available 
in the U.S.
    You state that the containers must be capable of being stacked 
up to nine units high, with the base of a stack strong enough to 
support 470,400 static lbs. above a container (8 containers x 58,800 
lbs. per container). You also state 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 CSC \2\ certified at a CSC 
certified, manufacturer's facility that is preapproved by the U.S. 
Coast Guard.
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    \2\ International Container Safety Convention concerning 
testing, inspection, approval and maintenance of shipping 
containers.
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ISSUE:

    Whether the intermodal containers are considered to be products 
of the United States 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 C.F.R 
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. The country 
of origin of the item's components,

[[Page 789]]

extent of the processing that occurs within a country, and whether 
such processing renders a product with a new name, character, and 
use are primary considerations in such cases. Additionally, factors 
such as the resources expended on product design and development, 
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.
    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).
    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 U.S. 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 U.S.
    It is your position that the country of origin of the intermodal 
containers is the U.S. because your client's operations are 
``plainly complex and meaningful'' in that every component loses its 
identity and becomes an integral part of the shipping container. You 
state that this process is more complex than processes found to 
effect a substantial transformation in certain past rulings, and you 
cite to Headquarters Ruling Letters (HQ) H248850, dated November 7, 
2014; H259326, dated April 13, 2015; H192144, dated October 22, 
2014; and H251592, dated June 24, 2014. You also state that the 
large scale industrial process that is employed to manipulate 
components weighing hundreds to thousands of pounds to manufacture a 
shipping container to narrow tolerances is surely a ``complex 
operation requiring skilled workers.'' You also advise that this 
``large scale industrial'' manufacturing process requires skilled 
labor, special equipment, facilities, labor resources and in-process 
quality assurance techniques and precision subject to ISO 
specifications and rigorous CSC certification. You argue that the 
strict dimensional tolerances that are required for safety and to 
assure compliance with ISO and CSC standards for use in 
international commerce makes the process precise, expensive, complex 
and meaningful. We reviewed your submission and note that although 
the large scale assembly requires skilled labor for safety and 
compliance with certain ISO and CSC certification requirements, this 
does not result in a substantial transformation of the non-U.S. 
components. Rather, the container assembly is distinguishable from 
the aforementioned cases where CBP found substantial transformation.
    In H259326, the exoskeleton assistive walking device assembly 
consisted of hundreds of parts sourced from U.S. manufacturers, with 
the exception of three parts, all of which were assembled in the 
U.S. In H259326, CBP found the inclusion of the two of the three 
non-U.S. parts (a heat diffuser/shield, foot straps/binding) would 
be permanently attached to the finished devices such that they would 
``lose their separate identities and be subsumed into the finished 
exoskeleton,'' thereby resulting in a substantial transformation 
when used in the manufacturer of the finished exoskeleton. However, 
in this case, the foreign-origin front, side and roof and floor 
panels are not subsumed into a complex device.
    Further, there is not complex assembly of the container like in 
H248850, dated November 7, 2014, in which CBP found a substantial 
transformation involving U.S. patented operations which consisted of 
bending of the HEX; brazing of various connections; and installing a 
control box which contained U.S. developed software. With the 
intermodal containers, although skilled workers are required to 
ensure safety and accuracy in accordance with ISO and CSC 
requirements, the grinding, welding and assembly processes 
essentially do not change the predetermined use of the panels, all 
of which originate from one foreign country. In regard to H251592, 
CBP determined that certain AIO cartridges assembled with toner 
powder from Japan, a cleaning unit from Thailand, and a development 
unit from China, were substantially transformed because the toner 
powder was found to be the most critical element of the AIO 
cartridge. As in Uniroyal, the essential character of the container 
is imparted by the foreign-origin roof, side and bottom panels, 
which, like National Handtool, are already formed in the final shape 
prior to importation. In H192144, CBP found imported coated, optical 
lenses underwent a double substantial transformation in a 
beneficiary country to meet the 35 percent value-content GSP 
requirement, which is not at issue here. Therefore, we do not find a 
substantial transformation in the manufacture of the subject 
intermodal containers.

HOLDING:

    Based upon the specific facts of this case, we find that the 
imported panels are not substantially transformed as a result of the 
described operations performed in the United States. The country of 
origin of the intermodal containers for purposes of U.S. Government 
procurement is imparted by the roof, side and floor panels, which 
are of non-U.S. origin.
    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 & Rulings 
Office of International Trade

[FR Doc. 2015-33244 Filed 1-6-16; 8:45 am]
BILLING CODE 9111-14-P
788 Federal Register / Vol. 81, No. 4 / Thursday, January 7, 2016 / Notices

party-at-interest within the meaning of 19 internal dimensions are: 6′3 25/64″ (L); 7′7 primer and a top coat. You indicate that the
CFR 177.22(d)(1) and is entitled to request 22/32″ (W); 7′5 9/64″ (H). You state that the particular steel that is used in the roof and
this final determination. A meeting was held Tricon has similar features to the 20 foot unit sides is not available in the U.S.
November 4, 2015. and the Bicon, except that instead of a You state that the containers must be
wooden flooring, the Tricon has heavy duty capable of being stacked up to nine units
FACTS: high, with the base of a stack strong enough
steel flooring. You state the Tricon has a
You state that the subject containers are weight of 2,600 lbs. each laden and may to support 470,400 static lbs. above a
made in various sizes: 20 foot long; Bicon; accommodate a payload of 13,300 lbs., and container (8 containers x 58,800 lbs. per
Tricon and Quadcon. The 20′ shipping has a storage capacity of 356 cubic feet. container). You also state the container must
container is considered to be a standard unit be able to support a dynamic load taking into
in the shipping industry. 4. Quadcons account a vessel’s motion in conformity with
You state that a Quadcon is approximately the American Bureau of Shipping (ABS). You
1. Twenty Foot Shipping Containers also advise that the containers must be CSC 2
one-fourth the size of a twenty foot container
You state that a 20 foot ISO 1-compliant and that it is manufactured to precise certified at a CSC certified, manufacturer’s
container has the following external dimension such that when four Quadcons are facility that is preapproved by the U.S. Coast
measurements: linked together by connecting couplers, a Guard.
19′ 10.5″ in length with a tolerance of +0, TEU is formed and may be transported as if
¥1/4 of an inch; 8.0′ in width with a ISSUE:
the combination were a single 20 foot
tolerance of +0, ¥3/16 of an inch; 8.0′ in container. The ISO-compliant Quadcon Whether the intermodal containers are
height with a tolerance of +0, ¥3/16 of an container has the following external considered to be products of the United
inch. The internal dimensions are: 19′4 11/ dimensions: 4′9 7/16″ in length with a States for U.S. Government procurement
64″ (L); 7′8 17/32″ (W); 7′4 3/16″ (H). The 20 tolerance of +0, ¥3/16 of an inch; 8.0′ in purposes.
foot container is comprised of corrugated width with a tolerance of +0, ¥3/16 of an LAW AND ANALYSIS:
steel sides and roofing which gives it a inch; 8.0′ in height with a tolerance of +0,
favorable strength to weight ratio; two sets of Pursuant to Subpart B of Part 177, 19 CFR
¥3/16 of an inch. The internal dimensions
forklift ‘‘pockets’’ that permit forklifts to lift 177.21 et seq., which implements Title III of
are: 4′7 3/4″ (L); 7′6 9/16″ (W); 7′5″ (H). You
and move laden or unladen containers; the Trade Agreements Act of 1979, as
state that the Quadcon has similar features to
wooden flooring tested to withstand 16,000 amended (19 U.S.C. 2511 et seq.), CBP issues
the Tricon, except that it also has swing
lbs. per square foot (144 square inches); 24 country-of-origin advisory rulings and final
doors on both sides for convenient access. determinations as to whether an article is a
top and bottom wall tie down steel lashing You state the Quadcon has a weight of 2,300
rings each having a capacity of 4,000 lbs.; product of a designated country for the
lbs. each unladed and may accommodate a purpose of granting waivers of certain ‘‘Buy
and two vents. The twenty foot containers payload of 8,900 lbs., and has a storage
weigh 5,000 lbs. each and can accommodate American’’ restrictions on U.S. Government
capacity of 260 cubic feet. procurement.
a payload of 47,910 lbs.
Manufacturing Process In rendering final determinations for
2. Bicons purposes of U.S. Government procurement,
In your submission, you described Sea
You state that a Bicon is a shipping CBP applies the provisions of Subpart B of
Box’s manufacturing facilities to include a
container that is approximately half the size Part 177 consistent with the Federal
separate, free-standing, testing center with
of a 20 foot container and manufactured to Procurement Regulations. See 19 CFR 177.21.
equipment capable of testing containers for In this regard, CBP recognizes that the
precise dimensions such that when two are
ISO compliance to 1.8 times the maximum Federal Acquisition Regulations restrict the
linked together by connecting couplers, they
required load (which is equivalent to 846,720 U.S. Government’s purchase of products to
form a 20 foot equivalent unit (‘‘TEU’’) and
lbs.). You advise that the manufacturing U.S.-made or designated country end
may be transported as if the combination
process requires the manipulation of large products for acquisitions subject to the Trade
were a single 20 foot container. The ISO-
compliant Bicon container has the following components to form a structurally sound Agreements Act. See 48 CFR 25.403(c)(1).
external dimensions: 9′9 3/4″ in length with container to its precise size in accordance The Federal Acquisition Regulations define
a tolerance of +0, ¥3/16 of an inch; 8.0′ in with ISO specifications, allowing containers ‘‘U.S.-made end product’’ as ‘‘an article that
width with a tolerance of +0, ¥3/16 of an to be capable of transport by rail, truck and is mined, produced, or manufactured in the
inch; 8.0′ in height with a tolerance of +0, ship with uniform fitting on preexisting truck United States or that is substantially
¥3/16 of an inch. The internal dimensions and rail support structures. You provided a transformed in the United States into a new
are: 9′3 1/2″ (L); 7′8 17/32″ (W); 7′4 3/16″ (H). list of the 43 components of the containers. and different article of commerce with name,
You state that the Bicon has similar features We note that that the front wall panel, side character, or use distinct from that of the
to the 20 foot unit, except that the Bicon only wall panel, right-hand door, right-hand door article or articles from which it was
has one set of forklift ‘‘pockets’’ and uses gasket, left-hand door gasket, roof panel, floor transformed.’’ See 48 C.F.R 25.003.
several tie down steel lashings. You state that panel, lashing rings, front corner post tie An article is a product of a country or
the Bicon has a weight of 2,900 lbs. and can downs, and corner blocks, all originate from instrumentality only if (i) it is wholly the
accommodate a payload of 23,555 lbs., and one foreign country. Connecting couplers, growth, product, or manufacture of that
has a storage capacity of 527 cubic feet. hand assembly restraint bar, tie-back, rivets country or instrumentality, or (ii) in the case
nuts and bolts, hinges, amongst other of an article which consists in whole or in
3. Tricons components, originate from the U.S. You part of materials from another country or
You state that a Tricon is approximately indicate that by using grinders and/or cutting instrumentality, it has been substantially
one-third the size of a 20 foot container and wheels, the components are ground to bare transformed into a new and different article
that it is manufactured to precise dimensions steel where welding is required. Specifically, of commerce with a name, character, or use
such that when three Tricons are linked the floor sections, wall section, front and distinct from that of the article or articles
together by connecting couplers, a TEU is rear-end sections, and roof section are ground from which it was so transformed. See also
formed and may be transported as if the to bare steel where welding is required. Next, 19 CFR 177.22(a).
combination was a single 20 foot container. the components are loaded into the Jig and In order to determine whether a substantial
The ISO-compliant Tricon container has the once the dimensional tolerances are verified transformation occurs when components of
following external dimensions: 6′5 9/16″ in and adjusted, the components are tacked and various origins are assembled into completed
rmajette on DSK2TPTVN1PROD with NOTICES

length with a tolerance of +0, ¥3/16 of an stich-welded together, vertical seams are products, CBP considers the totality of the
inch; 8.0′ in width with a tolerance of +0, welded, and all outside components are fully circumstances and makes such
¥3/16 of an inch; 8.0′ in height with a welded. If required, roof corner plates and determinations on a case-by-case basis. The
tolerance of +0, ¥3/16 of an inch. The floor gussets are welded, and door tieback country of origin of the item’s components,
hooks are welded. Next, pilot holes are
1 International Organization for Standardization drilled into the floor and steel cross-members 2 International Container Safety Convention

set standard sizes and manufacturing specifications and doors are secured. The container is then concerning testing, inspection, approval and
for all containers. moved to the blast booth for painting with maintenance of shipping containers.

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Federal Register / Vol. 81, No. 4 / Thursday, January 7, 2016 / Notices 789

extent of the processing that occurs within a It is your position that the country of origin Thailand, and a development unit from
country, and whether such processing of the intermodal containers is the U.S. China, were substantially transformed
renders a product with a new name, because your client’s operations are ‘‘plainly because the toner powder was found to be
character, and use are primary considerations complex and meaningful’’ in that every the most critical element of the AIO
in such cases. Additionally, factors such as component loses its identity and becomes an cartridge. As in Uniroyal, the essential
the resources expended on product design integral part of the shipping container. You character of the container is imparted by the
and development, the extent and nature of state that this process is more complex than foreign-origin roof, side and bottom panels,
post-assembly inspection and testing processes found to effect a substantial which, like National Handtool, are already
procedures, and worker skill required during transformation in certain past rulings, and formed in the final shape prior to
the actual manufacturing process will be you cite to Headquarters Ruling Letters (HQ) importation. In H192144, CBP found
considered when determining whether a H248850, dated November 7, 2014; H259326, imported coated, optical lenses underwent a
substantial transformation has occurred. No dated April 13, 2015; H192144, dated double substantial transformation in a
one factor is determinative. October 22, 2014; and H251592, dated June beneficiary country to meet the 35 percent
Substantial transformation occurs when an 24, 2014. You also state that the large scale value-content GSP requirement, which is not
article emerges from a process with a new industrial process that is employed to at issue here. Therefore, we do not find a
name, character or use different from that manipulate components weighing hundreds substantial transformation in the
possessed by the article prior to processing. to thousands of pounds to manufacture a manufacture of the subject intermodal
A substantial transformation will not result shipping container to narrow tolerances is containers.
from a minor manufacturing or combining surely a ‘‘complex operation requiring skilled
process that leaves the identity of the article workers.’’ You also advise that this ‘‘large HOLDING:
intact. See United States v. Gibson-Thomsen scale industrial’’ manufacturing process Based upon the specific facts of this case,
Co., 27 C.C.P.A. 267 (1940). In determining requires skilled labor, special equipment, we find that the imported panels are not
whether the combining of parts or materials facilities, labor resources and in-process substantially transformed as a result of the
constitutes a substantial transformation, the quality assurance techniques and precision described operations performed in the United
determinative issue is the extent of subject to ISO specifications and rigorous States. The country of origin of the
operations performed and whether the parts CSC certification. You argue that the strict intermodal containers for purposes of U.S.
lose their identity and become an integral dimensional tolerances that are required for Government procurement is imparted by the
part of the new article. See Belcrest Linens safety and to assure compliance with ISO and roof, side and floor panels, which are of non-
v. United States, 6 Ct. Int’l Trade 204, 573 F. CSC standards for use in international U.S. origin.
Supp. 1149 (1983), aff’d, 741 F.2d 1368 (Fed. commerce makes the process precise, Notice of this final determination will be
Cir. 1984). expensive, complex and meaningful. We given in the Federal Register, as required by
In Uniroyal, Inc. v. United States, the Court reviewed your submission and note that 19 CFR 177.29. Any party-at-interest other
of International Trade held that no than the party which requested this final
although the large scale assembly requires
substantial transformation occurred because determination may request, pursuant to 19
skilled labor for safety and compliance with
the attachment of a footwear upper from CFR 177.31, that CBP reexamine the matter
certain ISO and CSC certification
Indonesia to its outsole in the United States anew and issue a new final determination.
requirements, this does not result in a
was a minor manufacturing or combining Pursuant to 19 CFR 177.30, any party-at-
substantial transformation of the non-U.S.
process which left the identity of the upper interest may, within 30 days of publication
components. Rather, the container assembly
intact. Uniroyal, Inc. v. United States, 3 CIT of the Federal Register Notice referenced
220, 224, 542 F. Supp. 1026, 1029 (1982), is distinguishable from the aforementioned
cases where CBP found substantial above, seek judicial review of this final
aff’d, 702 F.2d 1022 (Fed. Cir. 1983). The determination before the Court of
court found that the upper was readily transformation.
In H259326, the exoskeleton assistive International Trade.
recognizable as a distinct item apart from the
outsole to which it was attached, it did not walking device assembly consisted of Sincerely,
lose its identity in the manufacture of the hundreds of parts sourced from U.S. Myles B. Harmon, Acting Executive Director
finished shoe in the United States, and the manufacturers, with the exception of three Regulations & Rulings Office of
upper did not undergo a physical change or parts, all of which were assembled in the International Trade
a change in use. Also, under Uniroyal, the U.S. In H259326, CBP found the inclusion of
[FR Doc. 2015–33244 Filed 1–6–16; 8:45 am]
change in name from ‘‘upper’’ to ‘‘shoe’’ was the two of the three non-U.S. parts (a heat
not significant. The court concluded that the diffuser/shield, foot straps/binding) would be BILLING CODE 9111–14–P

upper was the essence of the completed shoe, permanently attached to the finished devices
and was not substantially transformed. such that they would ‘‘lose their separate
In National Hand Tool Corp. v. United identities and be subsumed into the finished DEPARTMENT OF HOMELAND
States, 16 CIT 308 (1992), aff’d, 989 F.2d exoskeleton,’’ thereby resulting in a SECURITY
1201 (Fed. Cir. 1993), the court considered substantial transformation when used in the
manufacturer of the finished exoskeleton. [Docket No. DHS–2015–0069]
sockets and flex handles which were either
cold formed or hot forged into their final However, in this case, the foreign-origin
front, side and roof and floor panels are not Meeting: Homeland Security Advisory
shape prior to importation, speeder handles
which were reshaped by a power press after subsumed into a complex device. Council
importation, and the grip of flex handles Further, there is not complex assembly of
AGENCY: The Office of Public
which were knurled in the U.S. The imported the container like in H248850, dated
November 7, 2014, in which CBP found a Engagement, DHS.
articles were heat treated, cleaned by
sandblasting, tumbling, and/or chemical substantial transformation involving U.S. ACTION: Notice of partially closed
vibration before being electroplated. In patented operations which consisted of Federal Advisory Committee meeting.
certain instances, various components were bending of the HEX; brazing of various
assembled together which the court stated connections; and installing a control box SUMMARY: The Homeland Security
required some skill and dexterity. The court which contained U.S. developed software. Advisory Council (‘‘Council’’) will meet
determined that the imported articles were With the intermodal containers, although in person on January 21, 2016. Members
not substantially transformed and that they skilled workers are required to ensure safety of the public may participate in person.
rmajette on DSK2TPTVN1PROD with NOTICES

remained products of Taiwan. In making its and accuracy in accordance with ISO and The meeting will be partially closed to
determination, the court focused on the fact CSC requirements, the grinding, welding and the public.
that the components had been cold formed or assembly processes essentially do not change
DATES: The Council will meet Thursday,
hot forged ‘‘into their final shape before the predetermined use of the panels, all of
importation’’, and that ‘‘the form of the which originate from one foreign country. In January 21, 2016, from 10:10 a.m. to
components remained the same’’ after the regard to H251592, CBP determined that 4:35 p.m. EST. The meeting will be
assembly and heat treatment processes certain AIO cartridges assembled with toner open to the public from 1:30 p.m. to
performed in the U.S. powder from Japan, a cleaning unit from 3:00 p.m. EST. Please note the meeting

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Document Created: 2016-01-07 00:12:55
Document Modified: 2016-01-07 00:12:55
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Notice of final determination.
Dates		The final determination was issued on December 23, 2015. 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 February 8, 2016.
Contact		Teresa M. Frazier, Valuation and Special Programs Branch, Regulations and Rulings, Office of International Trade (202) 325-0139.
FR Citation		81 FR 787
81 FR 787 - Notice of Issuance of Final Determination Concerning Certain Intermodal Containers

DEPARTMENT OF HOMELAND SECURITYU.S. Customs and Border Protection

Federal Register Volume 81, Issue 4 (January 7, 2016)

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