CLA-2 OT:RR:CTF:TCM H024323 HvB
Mr. Ed Baker
A.N. Deringer, Inc.
30 W. Service Road
Champlain, NY 12919
RE: Revocation of Headquarters Ruling Letter 735542; Classification and Country of Origin Marking of a Rubber Hose Assembly for a Vacuum Cleaner
Dear Mr. Baker:
This is in reference to Headquarters Ruling Letter (“HQ”) 735542, dated March 21, 1994, issued to you on behalf of Tiger-Vac, Inc., regarding the tariff classification and country of origin marking requirements of a rubber hose assembly for vacuum cleaners. In that ruling, U.S. Customs and Border Protection (“CBP”) classified the merchandise in heading 8509, Harmonized Tariff Schedule of the United States (“HTSUS”), as a “part” of a vacuum cleaner, and determined that it was a product of Canada. We have reviewed HQ 735542 and found it to be incorrect.
Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. §1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed revocation was published on June 23, 2010, in the Customs Bulletin, Volume 44, No. 26. No comments were received in response to this notice.
FACTS:
In HQ 735542, CBP described the merchandise as follows:
The article in question is a hose assembly for a vacuum cleaner, item #75A, P/N 381120. This article is assembled in Canada from:
1. U.S. origin Flexible Neoprene Hose (item #74D, P/N 381180)
2. U.S. origin Stainless Steel Male Connector (item #60, P/N 381147)
3. Metal Female Adaptor (item #73, P/N 381144) assembled in Canada from:
i. metal adaptor (Taiwanese origin) and
ii. aluminum tubing (Canadian origin).
In that ruling, CBP concluded that the hose assembly was a product of Canada for marking purposes because it satisfied the NAFTA tariff shift rule specified in section 102.20(p) of the CBP Regulations (19 C.F.R. §102.20(p)) for subheading 8509.90.15, HTSUS, which requires “[a] change to subheading 8509.90 from any other heading except heading 8501 when resulting from simple assembly.” CBP explained:
The foreign materials incorporated in the hose assembly are the Taiwanese-origin metal adapter, the U.S.-origin hose imported into Canada in 50 foot coils, and the U.S.-origin stainless steel male connector for one end of the hose. None of these materials is classified in heading 8509 or 8501. The U.S.-origin flexible neoprene hose is classified in heading 4006 or 4009. The exact classification is dependent upon whether the tube is vulcanized. The U.S.-origin stainless steel male connector and Taiwanese-origin base metal adaptor appear to be classified in heading 7326. Accordingly, each foreign material incorporated in the imported hoses undergoes an applicable change in tariff classification in Canada and the country of origin of the finished product for marking purposes is Canada.
ISSUES:
Whether the rubber hose assembly is classified in heading 4009, HTSUS, as a rubber hose with fittings, or in heading 8508, HTSUS, as a “part” of a vacuum cleaner?
Whether the rubber hose assembly was properly marked as a product of Canada?
LAW AND ANALYSIS:
CLASSIFICATION
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRIs”). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
The 2012 HTSUS provisions under consideration are as follows:
4009 Tubes, pipes and hoses, of vulcanized rubber other than hard rubber, with or without their fittings (for example, joints, elbows, flanges):
8508 Vacuum cleaners; parts thereof:
Legal Note 2 to Section XVI, HTSUS, provides:
Subject to note 1 to this section, note 1 to chapter 84 and to note 1 of chapter 85, parts of machines … are to be classified according to the following rules:
(a) Parts which are goods included in any of the
headings of chapters 84 and 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings;
Other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529, or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517;
All other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529, or 8538 as appropriate or, failing that, in heading 8487 or 8548.
Legal Note 2(d) to Chapter 40, HTSUS, provides:
This Chapter does not cover:
Mechanical and electrical appliances or parts thereof of Section XVI (including electrical goods of all kinds), of hard rubber.
Additional U.S. Rule of Interpretation 1(c) provides:
In the absence of special language or context which otherwise requires –
(c) A provision for parts of an article covers products solely or
principally used as a part of such articles but a provision for "parts" or "parts and accessories" shall not prevail over a specific provision for such part or accessory; …
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The General ENs to Chapter 40, HTSUS, provide, in relevant part:
Hard rubber, (for example, ebonite) is obtained by vulcanizing rubber with a high proportion of sulfur to the point where it becomes practically inflexible and inelastic.
The ENs to heading 8508, HTSUS, provide, in relevant part:
EQUIPMENT PRESENTED WITH THE APPLIANCES
OF THIS HEADING
Vacuum cleaners of this heading may be presented with auxiliary devices (accessories) (for brushing, polishing, insecticide spraying etc.) or interchangeable parts (carpet devices, rotary brushed, multi-function suction heads, etc.). Such an appliance is classified here together with the parts and accessories presented with it, provided they are of a kind commonly used with the appliance. When presented separately, they are classified by reference to their nature. (Emphasis added).
PARTS
Subject to the provisions regarding the classification of parts (See General Explanatory Notes to Section XVI), parts of appliances of this heading are also classified here.
In HQ 735542, CBP classified the rubber hose assembly in heading 8509, specifically in subheading 8509.90.15, HTSUS, as “Electromechanical domestic appliances, with self-contained electric motor; parts thereof: Parts: Parts of Vacuum Cleaners: Other.” As a threshold matter, we note that effective February 3, 2007, parts of vacuum cleaners are classified in heading 8508, HTSUS, which provides for “Vacuum cleaners; parts thereof.” Accordingly, we will discuss heading 8508, HTSUS, as the applicable provision for parts of vacuum cleaners.
The courts have considered the nature of “parts” under the HTSUS and two distinct though not inconsistent tests have resulted. See Bauerhin Technologies Limited Partnership, & John V. Carr & Son, Inc. v. United States, 110 F.3d 774 (Fed. Cir. 1997), citing United States v. Willoughby Camera Stores, Inc., 21 C.C.P.A. 322 (1933) and United States v. Pompeo, 43 C.C.P.A. 9 (1955).
The court in Bauerhin explained:
As set forth in Willoughby Camera, “an integral, constituent, or component part, without which the article to which it is to be joined could not function as such article” is surely a part for classification purposes. 221 C.C.P.A. at 324. However that test is not exclusive. Willoughby Camera does not address the situation where an imported item is dedicated solely for use with the article. Pompeo addresses that scenario and states that such an item can also be classified as a part.
Reconciling Willoughby Camera with Pompeo, we conclude that where, as here, an imported item is dedicated solely for use with another article and is not a separate and distinct commercial entity, Pompeo is a closer precedent and Willoughby Camera does not apply […] Under Pompeo, an imported item dedicated solely for use with another article is a “part” of that article within the meaning of the HTSUS.
Applying Bauerhin, we find that the rubber hose assembly is a “part” because it is dedicated for use solely with a vacuum cleaner. However, under Additional U.S. Rule of Interpretation 1(c), HTSUS, even though the assembly is a part of vacuum cleaner, in the absence of special language or context which otherwise requires, a specific provision for this part will prevail.
Note 2(b) to Section XVI, HTSUS, provides that parts not included in any of the headings of Chapters 84 or 85, HTSUS, suitable for use solely or principally with a particular kind of machine, are classified with that machine. The Note does not apply, however, when one of the competing provisions falls outside of Section XVI. See, e.g, HQ 966963, dated April 30, 2004 (holding that plastic screw caps used to cover the oil filters of diesel engine trucks are classified in heading 3923, as plastic caps, not as parts of oil filters). Therefore, in this case, because one of the competing provisions falls outside of Section XVI (i.e., heading 4009, HTSUS), Note 2(b) does not supersede Additional U.S. Rule of Interpretation 1(c), HTSUS.
Heading 4009, HTSUS, provides for “Tubes, pipes and hoses, of vulcanized rubber other than hard rubber, with or without their fittings (for example, joints, elbows, flanges).” The instant merchandise consists of a neoprene (a flexible synthetic rubber) hose with metal fittings. The hose is not of “hard rubber.” See General ENs to Chapter 40. Accordingly, by application of GRI 1 and Additional U.S. Rule of Interpretation 1(c), HTSUS, we find that the rubber hose assembly is more specifically provided in heading 4009, HTSUS. See HQ 089296, dated August 21, 1991 (rubber hoses that were parts of forklift trucks classified as hoses in heading 4009, HTSUS).
MARKING
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that unless excepted, every article of foreign origin imported into the United States “shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit in such a manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article.” Congressional intent in enacting 19 U.S.C. § 1304 was that the ultimate purchaser should be able to know by an inspection of the markings on the imported goods the country of which the good is the product. “The evident purpose is to mark the goods so at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” See United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 (C.C.P.A. 1940).
Part 134 of the CBP Regulations (19 C.F.R. § 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Section 134.1(b) of the CBP Regulations (19 C.F.R. § 134.1(b)), defines “country of origin” as the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the “country of origin” within the meaning of this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.
Section 134.1(j) of the CBP Regulations (19 C.F.R. § 134.1(j)), provides that the “NAFTA Marking Rules” are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) of the CBP Regulations (19 C.F.R. § 134.1(g)), defines a “good of a NAFTA country” as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules, set forth at 19 C.F.R. §102.
Section 102.11(a) of the CBP Regulations (19 C.F.R. § 102.11(a)), sets forth the required hierarchy under the NAFTA Marking Rules for determining country of origin for marking purposes. This section states that the country of origin of a good is the country in which:
(1) The good is wholly obtained or produced;
(2) The good is produced exclusively from domestic materials; or
(3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in [section] 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
Section 102.1(g) of the CBP Regulations (19 C.F.R. § 102.1(g)), defines a good wholly obtained or produced as including “A good produced in that country exclusively from goods referred to in paragraphs (g)(1) through (g)(10) of this section or from their derivatives, at any stage of production.”
The rubber hose assembly at issue is neither wholly obtained or produced in Canada, nor produced exclusively from foreign materials. It is assembled in Canada from components manufactured in the United States (hose and steel male connector), Taiwan (metal female adaptor), and Canada (aluminum tubing). Accordingly, we must determine whether, under § 102.11(a)(3), each foreign material incorporated in the assembly undergoes the applicable change in tariff classification set out in § 102.20 in Canada.
Section 102.1(e) of the CBP Regulations (19 C.F.R. § 102.1(e)), defines “foreign material” as “a material whose country of origin as determined under these rules is not the same as the country in which the good is produced.” As determined above, the imported hose assembly is classified in heading 4009, HTSUS. Section 102.20(g) of the CBP Regulations (19 C.F.R. § 102.20(g)), the applicable tariff shift rule for this heading, requires “[a] change to heading 4006 through 4010 from any other heading, including another heading within that group.”
In this case, the foreign materials incorporated in the rubber hose assembly are the U.S.-origin rubber hose [heading 4009, HTSUS], the U.S.-origin steel male connector [heading 7326, HTSUS], and the Taiwanese-origin metal female adapter [heading 7326, HTSUS]. The rubber hose does not undergo the applicable change in tariff classification set out in § 102.20(g) in Canada in that it remains in heading 4009, HTSUS. Accordingly, the country of origin of the good may not be determined in accordance with that provision.
As the country of origin cannot be determined by application of § 102.20(a), we turn to section 102.11(b) of the CBP Regulations (19 C.F.R.
§ 102(b)) which states, in part:
Except for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation 3, where the country origin cannot be determined under paragraph (a), of this section:
(1) The country of origin of the good is the country or countries of the origin of the single material that imparts the essential character of the good;
* * *
Section 102.18 of the CBP Regulations (19 C.F.R. § 102.18) provides, in part:
(b) (1) For purposes of identifying the material that imparts the essential character to a good under § 102.11, the only materials that shall be taken into consideration are those domestic or foreign materials that are classified in a tariff provision from which a change in tariff classification is not allowed under the
§ 102.20 specific rule or other requirements applicable to the good.
* * *
Applying §102(b) and §102.18, we find that the U.S-originating rubber hose imparts the essential character of the rubber hose assembly. As such, the country of origin for marking purposes is the United States. Inasmuch as the marking requirements of 19 U.S.C. § 1304 are applicable only to articles of “foreign origin,” the assembly need not be marked with a reference to the United States origin upon importation into the United States. See, e.g., HQ H015361, dated November 2, 2007.
Note, however, that the NAFTA Preference Override, set forth in 19 C.F.R. §102.19, is applicable to the subject merchandise. § 102.19(b) states:
(b) If, under any other provision of this part, the country of origin of a good which is originating … is determined to be the United States and that good has been exported from, and returned to, the United States after having been advanced in value or improved in condition in another NAFTA country, the country of origin of such good for Customs duty purposes is the last NAFTA country in which that good was advanced in value or improved in condition before its return to the United States.
The U.S.-originating rubber hose was exported from, and returned to, the U.S. after having been advanced in value in Canada. Namely, it was fitted with steel connectors and adapters for use with a vacuum cleaner. Accordingly, for CBP duty purposes, the country of origin of the merchandise is Canada.
HOLDING:
By application of GRI 1 and Additional U.S. Rule 1(c), HTSUS, the rubber hose assembly is classified in heading 4009, specifically in subheading 4009.12.00, HTSUS, which provides for: “Tubes, pipes and hoses, of vulcanized rubber other than hard rubber, with our without their fittings (for example, joints, elbows, flanges): Not reinforced or otherwise combined with other materials: With fittings.” The 2012 column one, special rate of duty is: Free.
Pursuant to section 102.11(b) of the CBP Regulations, for marking purposes, the country of origin of the rubber hose assembly is the United States
Claims of domestic origin are a matter under the jurisdiction of the Federal Trade Commission (“FTC”). Therefore, should you wish to identify any of the articles as "Made in the USA”, we recommend that you contact that agency at the following address: Federal Trade Commission, Division of Enforcement, 600 Pennsylvania Avenue, N.W. Washington, D.C. 20580.
Pursuant to section 102.19(b) of the CBP Regulations, for duty purposes, the country of origin of the merchandise is Canada.
Duty rates are provided for convenience only and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
EFFECT ON OTHER RULINGS:
This ruling revokes HQ 735542, dated March 21, 1994.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division