Federal Register, Volume 78 Issue 124 (Thursday, June 27, 2013)

[Federal Register Volume 78, Number 124 (Thursday, June 27, 2013)]
[Notices]
[Pages 38728-38730]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-15357]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning Valves

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

[[Page 38729]]

Protection (CBP) has issued a final determination concerning the 
country of origin of certain valves to be offered to the U.S. 
Government under an undesignated government procurement contract. The 
final determination found that based upon the facts presented, the 
country of origin of the subject valve is the United States.

DATES: The final determination was issued on June 14, 2013. A copy of 
the final determination is attached. Any party-at-interest as defined 
in 19 CFR 177.22(d), may seek judicial review of this final 
determination within 30 days of June 27, 2013.

FOR FURTHER INFORMATION CONTACT: Fernando Pe[ntilde]a, Esq., Valuation 
and Special Programs Branch, Office of International Trade; telephone 
(202) 325-1511.

SUPPLEMENTARY INFORMATION: Notice is hereby given that on June 14, 
2013, pursuant to subpart B of part 177, Customs Regulations (19 CFR 
part 177, subpart B), CBP issued a final determination concerning the 
country of origin of certain valves to be offered to the U.S. 
Government under an undesignated government procurement contract. The 
final determination, Headquarters Ruling Letter H233698, was issued at 
the request of Omni Valve Company, LLC, 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, based upon the 
facts presented, the assembly in the United States of an automatic 
differential thermal relief system (``ADTR'') into an imported valve 
body to create the subject ``Omni Double Block & Bleed Valve'' 
substantially transformed the foreign body valve into a product of the 
U.S. for purposes of U.S. government procurement.
    Section 177.29, Customs Regulations (19 CFR 177.29), provides that 
notice of final determinations shall be published in the Federal 
Register within 60 days of the date the final determination is issued. 
Section 177.30, Customs Regulations (19 CFR 177.30), 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: June 14, 2013.
Sandra L. Bell,
Executive Director, Regulations and Rulings, Office of International 
Trade.

Attachment[Follow Lit]

HQ H233698

June 14, 2013

OT:RR:CTF:VS H233698 FP

CATEGORY: Marking

Mr. Richard O. Wolf
Moore & Lee, LLP
1650 Tysons Boulevard, Suite 1150
McLean, VA 22102-4225

RE: U.S. Government Procurement; Final Determination; Country of 
origin of valves; substantial transformation; 19 CFR Part 177

Dear Mr. Wolf:

    This is in response to your letter on behalf of Omni Valve 
Company, LLC (hereinafter ``Omni''), in which you seek a final 
determination pursuant to subpart B of Part 177, Customs 
Regulations, 19 CFR 177.21 et seq. Under these regulations, which 
implement Title III of the Trade Agreements Act of 1979, as amended, 
(19 U.S.C. Sec.  2411 et seq.), U.S. Customs and Border Protection 
(``CBP'') issues country of origin advisory rulings and final 
determinations on whether an article is or would be a product of a 
designated foreign 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 the 
Omni Double Block & Bleed Valve, a plug-type valve sold as the 
``OmniSeal DBB'', which Omni is considering selling to the U.S. 
Government. We note that Omni is a party-at-interest within the 
meaning of 19 CFR 177.22(d)(1) and is entitled to request this final 
determination.

FACTS:

    According to your submission and information provided by Omni, 
the ``OmniSeal DBB'' (``DBB'') is a plug-type valve often used in 
fuel storage and disbursing systems. The DBB expanding plug valve is 
designed for applications where positive shut-off, verifiable zero 
leakage and double block and bleed capabilities are required. It is 
a single valve solution that simultaneously blocks both the upstream 
and downstream flow while allowing the user to verify seal integrity 
using a manual or automatic body bleed system.
    The valve body of the DBB is purchased by Omni in India and 
imported into the United States. The valve body is usable as an 
isolation valve. At Omni's Oklahoma facility, Omni fabricates and 
adds an automatic differential thermal relief system (``ADTR'') to 
the imported valve. The ADTR system is a multi-joint, multi-
instrument system with various elbow, needle valves and pressure 
gauges. Depending on the needs of the customer, there can be 30 
different ADTR system components. One example of an ADTR consists of 
10 separate Swedgeloc connections, 6 separate tub sections, 4 small 
valves, 2 tees and one check valve. The ADTR system is procured and 
fabricated in the U.S. This process involves bending pipe and 
attaching the connections and fittings. Some customers require all 
joints on the ADTR system to be welded. After the ADTR system is 
fabricated, it is installed onto the valve body of Indian origin.
    It is claimed the ADTR allows the valve to be bled in order to 
test seal integrity in conformance to a prevailing industry 
standard. It is at this point, that the finished article is capable 
of being used for applications which require double isolation and 
bleed functionality.

ISSUE:

    Whether the OmniSeal DBB valves are considered to be products of 
the United States for purposes of U.S. Government procurement.

LAW AND ANALYSIS:

    Under subpart B of part 177, 19 CFR 177.21 et seq., which 
implements Title III of the Trade Agreements Act of 1979, as amended 
(``TAA''; 19 U.S.C. 2511 et seq.), CBP issues country of origin 
advisory rulings and final determinations on whether an article is 
or would be a product of a designated country or instrumentality for 
the purposes of granting waivers of certain ``Buy American'' 
restrictions in U.S. law or practice for products offered for sale 
to the U.S. Government.
    Under the rule of origin set forth under 19 U.S.C. 2518(4)(B):

An article is a product of a country or instrumentality only if (i) 
it is wholly the growth, product, or manufacture of that country or 
instrumentality, or (ii) in the case of an article which consists in 
whole or in part of materials from another country 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 rendering advisory rulings and 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 C.F.R. Sec.  177.21. In this regard, CBP 
recognizes that the Federal Procurement Regulations restrict the 
U.S. Government's purchase of products to U.S.-made or designated 
country end products for acquisitions subject to the TAA. See 48 
C.F.R. Sec.  25.403(c)(1). The Federal Procurement Regulations 
define ``U.S.-made end product'' as:

[A]n 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 a name, character, 
or use distinct from that of the article or articles from which it 
was transformed.

48 C.F.R. Sec.  25.003.

    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

[[Page 38730]]

integral part of the new article. Belcrest Linens v. Unites States, 
573 F. Supp. 1149 (CIT 1983), aff'd, 741 F.2d 1368 (Fed. Cir. 1984). 
CBP considers the totality of the circumstances and makes such 
decisions on a case-by-case basis. The country of origin of the 
article's components, extent of the processing that occurs within a 
given country, and whether such processing renders a product with a 
new name, character, or use are primary considerations in such 
cases. Additionally, facts such as resources expended on product 
design and development, extent and nature of post-assembly 
inspection procedures, and worker skill required during the actual 
manufacturing process will be considered when analyzing whether a 
substantial transformation has occurred; however, no one such factor 
is determinative.
    CBP's predecessor agency, the U.S. Customs Service 
(``Customs''), previously found imported valve components to have 
been substantially transformed when used in the manufacture of 
finished valves. See Headquarters Ruling Letter (``HRL'') 729335 
(April 18, 1986); HRL 731828 (January 30, 1990); and HRL 558008 
(November 16, 1994). In HRL 729335 dated April 18, 1986, Customs 
found that a substantial transformation had taken place when 
finished body castings and bonnet castings were combined in the U.S. 
with valve stems, discs, disc screws and handwheels to produce 
complete plumbing valves. In HRL 731828 it was determined that the 
production of ball valves using foreign valve bodies and bonnets 
combined with U.S. origin balls, seats, stems, and various seals and 
washers effected substantial transformation of the foreign 
materials. Finally, in HRL 558008 Customs considered the assembly of 
water system valves using imported valve body castings and other 
internal components. It was concluded that an assembly entailing the 
installation of various subassemblies, gaskets, bolts, seals and 
other parts resulted in substantial transformation of the imported 
components.
    It is our conclusion that the assembly operations carried out by 
Omni on the imported components are closely comparable to those 
considered in the rulings cited. The number of parts assembled, 
including significant numbers of U.S.-origin parts, and the relative 
complexity of the operations carried out, indicate that the imported 
components have undergone a substantial transformation by reason of 
the operations carried out in the United States. Accordingly, the 
finished DBB will be considered a product of the United States for 
purposes of U.S. Government procurement in making this 
determination.

HOLDING:

    On the basis of the information provided, we find that the 
assembly in the U.S. substantially transforms the components of 
foreign origin in DBB valves with an ADTR system. Therefore, the 
country of origin of Omni's DBB is the United States for purposes of 
U.S. Government procurement.
    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. Any party-at-interest may, within 
30 days after publication of the Federal Register notice referenced 
above, seek judicial review of this final determination before the 
Court of International Trade.

Sincerely,

Sandra L. Bell,

Executive Director, Regulations and Rulings, Office of International 
Trade.

[FR Doc. 2013-15357 Filed 6-26-13; 8:45 am]
BILLING CODE 9111-14-P