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U.S. Parts, Finishing Operations Confer Origin on Scissor Lifts, CBP Rules

Thursday, May 31, 2018
Sandler, Travis & Rosenberg Trade Report

U.S. Customs and Border Protection has issued a final determination concerning the country of origin of electric scissor lifts that may be offered to the U.S. government under an undesignated government procurement contract. Any party-at-interest may seek judicial review of this determination by June 29. CBP issues country of origin advisory rulings and final determinations as to whether an article is or would be a product of a designated country or instrumentality for the purposes of granting waivers of certain “Buy American” restrictions in U.S. law or practice for products offered for sale to the U.S. government.

The items under consideration are partially assembled in China and then shipped to the U.S. for additional manufacturing, testing, and final assembly. Approximately 40 percent of the parts are of U.S. origin and 60 percent are of Chinese origin. The remaining few components are sourced from South Korea, Italy, Ireland, and Germany (all designated countries for U.S. government procurement purposes). CBP previously determined that other models of the petitioner’s scissor lifts are of U.S. origin and the petitioner states that 95 percent of the processing for the models at issue is the same, with a slight increase in the low-level, unskilled assembly in China and an increase in high-level skilled work on the brain of the product performed in the U.S.

In ruling HQ H294980 CBP concludes that the country of origin of these products for government procurement purposes is the U.S. CBP explains that while many important components are of Chinese origin and many significant processing operations occur in China, the Chinese operations require less skill and precision and the product remains inoperable when imported into the U.S. In contrast, the final assembly of the product, 15 out of 25 operational sequences of which are performed in the U.S., requires a good deal more skill, precision, and technical expertise. In addition, many of the critical operations involved in completing the product, such as installing the work platforms’ software, manufacturing the “brain” of the system, and attaching the modules to the product, are also performed in the U.S. More importantly, CBP states, 40 percent of the remaining components are of U.S. origin, including the three control modules that act as the “brain.”

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