CLA-2 OT:RR:CTF:TCM H266154 PJG
Gene Mack, LCB
110 E. Wilshire Avenue, Ste. G11 Fullerton, CA 92832
RE: Tariff classification and country of origin for purposes of marking the Airbus A321 Door Trainer
Dear Mr. Mack:
This ruling is in response to your electronic ruling request dated June 8, 2015, filed on behalf of Spirit Airlines, Inc. (“Spirit”) requesting a binding ruling on the tariff classification of the Airbus A321 Door Trainer under the Harmonized Tariff Schedule of the United States (“HTSUS”). You also requested a binding ruling on the country of origin for purposes of marking the Airbus A321 Door Trainer, and asked whether the Airbus A321 Door Trainer is eligible for duty-free treatment under a trade preference program. Your request has been forwarded by the National Commodity Specialist Division to this office for a reply.
FACTS:
The Airbus A321 Door Trainer represents one side of an aircraft fuselage. The fuselage is 22 feet in length by 8 feet 2 inches in width by 7 feet 10 inches in height, closed on the forward end and open on the aft (rear) end with two fully operational doors with computer controlled door malfunction capability. It will have three rows of passenger seats, one double and one single flight attendant seat, cabin and emergency lighting, closed-circuit television (CCTV), computerized sound reproduction, and deployable, retractable non-working oxygen masks.
The Airbus A321 Door Trainer will be manufactured in the United Arab Emirates (“UAE”) from various components. The manufacturing process for the A321 Door Trainer will involve some assembly operations. The following parts, with their respective countries of origin, will be used in the assembly operations: L1 Door and Frame (France); L3 Door and Frame (France); Overwing Exit Door and Frame (France); L1 and L3 Door Drives (Germany); Programmable Logic Controller (“PLC”) touch screens (Malaysia); PLC components (Malaysia); Electrical cables (USA); Electrical connectors (United Kingdom); Flooring panels (Italy); Base frame (UAE); and Door drive chains (United Kingdom). The remaining parts, with their respective countries of origin, are parts that will also be used to manufacture the A321 Door but will be subject to additional manufacturing such as cutting, forming, welding or machining operations: Handles jam assemblies (UAE); Base panels (UAE); Window panel (UAE); Passenger Service Unit (“PSU”) panels (UAE); Overhead Stowage Bins (“OHSB”) (UAE); Ceiling panels (UAE); Passenger seats (UAE) fitted with parts from USA and Germany; and Flight attendant seats (UAE) fitted with parts from USA and Germany. The Airbus A321 Door Trainer will be imported in one shipment, fully assembled.
The purpose of the Airbus A321 Door Trainer is to provide flight attendant training on door operations. The Airbus A321 Door Trainer will be capable of simulating all normal, abnormal, and emergency faults under the control of a trained instructor.
None of the components of the Airbus A321 Door Trainer, including the fuselage and doors, is certified as airworthy. They have been made or manufactured from composites and steel that are not suitable or certified to be used as aircraft parts.
ISSUES:
Whether the Airbus A321 Door Trainer is classifiable in heading 9023, HTSUS, which provides for “Instruments, apparatus and models, designed for demonstrational purposes (for example, in education or exhibitions), unsuitable for other uses, and parts and accessories thereof”; and
Whether the country of origin for purposes of marking is the United Arab Emirates; and
Whether the Airbus A321 Door Trainer is eligible for duty-free treatment under a trade preference program.
LAW AND ANALYSIS:
Classification of the Airbus A321 Door Trainer
Classification under the Harmonized Tariff Schedule of the United States (“HTSUS”) is made in accordance with the General Rules of Interpretation (“GRI”). 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 may then be applied.
The 2016 HTSUS provision under consideration is as follows:
9023 Instruments, apparatus and models, designed for demonstrational purposes (for example, in education or exhibitions), unsuitable for other uses, and parts and accessories thereof
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While neither 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 EN to 90.23 states, in pertinent part:
This heading covers a wide range of instruments, apparatus and models designed for demonstrational purposes (e.g., in schools, lecture rooms, exhibitions) and unsuitable for other uses.
Subject to this proviso, the heading includes:
…
(4) Cross-sectional models of ships, locomotives, engines, etc., cut to show their internal operation or the functioning of an important part; . . .
Heading 9023, HTSUS, covers instruments, apparatus and models which are “designed for demonstrational purposes (for example, in education and exhibitions)” and are “unsuitable for other uses.” The tariff term “demonstrational” is not defined by the HTSUS. “When…a tariff term is not defined in either the HTSUS or its legislative history”, its correct meaning is its common or commercial meaning. See Rocknel Fastener, Inc. v. United States, 267 F.3d 1354, 1356 (Fed. Cir. 2001). “To ascertain the common meaning of a term, a court may consult ‘dictionaries, scientific authorities, and other reliable information sources’ and ‘lexicographic and other materials.’” Id. at 1356-1357 (quoting C.J. Tower & Sons v. United States, 69 C.C.P.A. 128, 673 F.2d 1268, 1271 (CCPA 1982); Simod Am. Corp. v. United States, 872 F.2d 1572, 1576 (Fed. Cir. 1989)). The Oxford English Dictionary, 3d Ed. (2014), defines the word “demonstrate” as “[t]o point out or indicate (a person or thing); to present (information).” Relying on the common meaning of the term, CBP has previously defined the term “demonstration” as “a description or explanation, as of a process, given with the help of specimens or by experiment." See Headquarters Ruling Letter (HQ) 957097, dated January 12, 2005 (citing The American College Dictionary (1970)).
These definitions of “demonstrate” and “demonstration” indicate that a good designed for demonstrational purposes is a good which can be used to explain the use or operation of the good. In this case, the Airbus 321 Door Trainer has two fully operational doors with computer controlled door malfunction capability, and is capable of simulating all normal, abnormal, and emergency faults under the control of a trained instructor. As such, it can be used to explain functional door operations to the flight attendant. Thus, the Airbus 321 Door Trainer is “designed for demonstrational purposes” as required under heading 9023, HTSUS. According to the facts, it is also “unsuitable for other uses”.
Therefore, we find that the Airbus A321 Door Trainer is described by heading 9023, HTSUS, and subheading 9023.00.00, HTSUS, as “Instruments, apparatus and models, designed for demonstrational purposes (for example, in education or exhibitions), unsuitable for other uses, and parts and accessories thereof.” We note that merchandise classified under subheading 9023.00.00, HTSUS, is not eligible for duty-free treatment under a preference program.
Country of Origin for purposes of Marking the Airbus A321 Door Trainer
In addition to your request for a binding ruling on the tariff classification of the
Airbus A321 Door Trainer, you requested a binding ruling on its country of origin for purposes of marking. The marking statute, section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304(a)), 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 will permit, in such a manner as to indicate to the 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 marking on imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that 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.” United States v. Friedlaender & Co. Inc., 27 C.C.P.A. 297, 302 (1940).
Part 134, Customs and Border Protection (CBP) Regulations (19 C.F.R Part 134), implements the country of origin marking requirements and the exceptions of 19 U.S.C. § 1304. Section 134.1(b), CBP Regulations (19 C.F.R. § 134.1(b)), defines “country of origin” as:
[T]he 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 [19 C.F.R. part 134] …
Since the U.S.-, French-, German-, Malaysian-, U.K.-, and Italian-origin parts are subjected to additional operations in the UAE, we must determine whether they undergo a substantial transformation.
A substantial transformation results when a new and different article emerges from the processing having a distinctive name, character or use. U.S. v. Gibson-Thomsen Co., Inc., 27 CCPA 269 (1940). If the manufacturing or combining process is merely a minor one which leaves the identity of the imported article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 542 F. Supp. 1026 (CIT 1982), aff'd, 702 F.2d 1022 (Fed. Cir. 1983). Assembly operations which are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. In determining whether the combining of parts or materials constitutes a substantial transformation, the issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 573 F. Supp.1149 (CIT 1983), aff'd, 741 F.2d 1368 (Fed. Cir. 1984). See also C.S.D. 85-25.
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, the extent of the processing that occurs within a country, and whether such processing renders a product with a new name, character, or use are primary considerations in such cases. Additionally, factors such as the resources expended on product design and development, 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; however, no one factor is determinative.
In the instant case, the extent of the assembly and manufacturing processes which are described in the “Installation Time Frame” found in Exhibit A of your request, indicate that the structural assembly, painting, mechanical assembly, and electrical installation, is extensive in nature and can take up to 2 months. We also note that nearly a month of product design and development is undertaken before the assembly and manufacturing processes begin. In addition, Exhibit A indicates that post-assembly inspections and electrical testing procedures can take up to 12 days. We conclude that the assembly and manufacturing processes that occur within the United Arab Emirates substantially transform the components of foreign origin into a product with a new name, character, and use. Accordingly, the country of origin of the Airbus A321 Door Trainer is the United Arab Emirates. The Airbus A321 Door Trainer is subject to the country of origin marking requirements of 19 U.S.C. §1304. The country of origin marking must meet the requirements of 19 CFR part 134.
HOLDING:
Under the authority of GRIs 1 and 6, the Airbus A321 Door Trainer is classified in heading 9023, HTSUS, specifically in subheading 9023.00.00, HTSUS, which provides for “Instruments, apparatus and models, designed for demonstrational purposes (for example, in education or exhibitions), unsuitable for other uses, and parts and accessories thereof.” Merchandise classified under subheading 9023.00.00, HTSUS, is not eligible for duty-free treatment under a preference program. The 2016 column one, general rate of duty is Free.
The country of origin for marking purposes is the United Arab Emirates. The Airbus A321 Door Trainer is subject to the country of origin marking requirements of 19 U.S.C. §1304. The country of origin marking must meet the requirements of 19 CFR part 134.
Duty rates are provided for convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usitc.gov/tata/hts/.
A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Ieva K. O’Rourke, Chief
Tariff Classification and Marking Branch