OT:RR:CTF:VS H314110 RMC
Griselda Valenzuela
R.L. Jones Customhouse Brokers, Inc.
1778 Zinetta Rd. Suite A
Calexico, CA 92231
RE: Tariff Classification and USMCA Eligibility of Solar Laminates
Dear Ms. Valenzuela:
This is in response to your correspondence dated July 1, 2020, in which you request a ruling on the tariff classification of a SunPower solar laminate and on the eligibility of that product for preferential tariff treatment under the United States-Mexico-Canada Agreement (“USMCA”). Your request, submitted as an electronic ruling request, was forwarded to this office from the National Commodity Specialist Division for response.
FACTS:
According to the information provided, the solar laminate (also referred to as a “solar sheet”) is designated as SunPower part number 527935. The unit is essentially an interconnected array of either 96 or 128 solar cells. Unlike SunPower’s finished solar panels, however, the solar laminate is not mounted onto a frame or connected to a junction box. You state that, in most cases, the unit will be transported through the United States in bond for shipment to Europe, where a junction box and aluminum frame will be added to produce a fully functional solar module. However, you also note that the solar laminate may, in some cases, be entered for consumption in the United States.
You note that the unit in its condition as imported will not contain a microinverter to convert the direct current electricity generated by the solar cells into alternating current. Accordingly, the unit cannot be connected directly to external devices or to a grid. Instead, the unit is eventually intended to be further manufactured into a solar module that will be connected to other solar modules to create a larger panel. The technical specifications provided indicate that the nominal power of the unit is 360 watts with a maximum power of 0.435 kilovolt amperes (“kVA”). You assert that the solar laminate will be classified under subheading 8541.40.6015, Harmonized Tariff Schedule of the United States (“HTSUS”).
The assembly of the solar laminate will take place at a SunPower facility in Mexico using both originating and non-originating materials. Your submission includes a schematic of the assembly operations, including descriptions and photographs of all steps, and complete bills of materials including the originating status, tariff classification, and value of all materials used in the production of the solar laminate.
The assembly of the solar laminate in Mexico involves cutting the encapsulant material, washing and inspection of the anti-reflective glass, assembly of the strings of solar cells, alignment of the strings of solar cells, lamination of the various components to create the solar laminate, and trimming of the product. The unit is then inspected, tested against a sun simulator, cleaned, and palletized for shipment. You assert that the solar laminate will be eligible for USMCA preferential tariff treatment in cases where it is entered for consumption in the United States.
ISSUES:
Whether the solar laminate will be properly classified under subheading 8541.40.6015, HTSUS.
Whether the solar laminate will be eligible for USMCA preferential tariff treatment in cases where it is imported from Mexico into the United States and entered for consumption.
LAW AND ANALYSIS:
Classification
Classification of goods under the HTSUS is governed by 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 2 through 6 may then be applied in order.
CBP has classified merchandise similar to the SunPower commercial units in subheading 8541.40.60, HTSUS. For example, in Headquarters Ruling (“HQ”) H250768, dated December 2, 2016, CBP held that certain solar panels that were designed to be connected to other solar panels were properly classified in subheading 8541.40.60 of the 2013 HTSUS, which provided for “Photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels …: Photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up in panels …: Other diodes.” We noted that “per the [Explanatory Notes], panels or modules without elements that supply the power directly to an external load, are classified in heading 8541, HTSUS, and cannot be classified in heading 8501, HTSUS.” Although the subject merchandise contained a junction box, connectors, and bypass diodes that protected the solar cells from overheating, these features were not elements that supplied power directly to an external load. Therefore, the merchandise was properly classified in subheading 8541.40.60, HTSUS. See also NY N047472, dated January 9, 2009 (holding that modules that could only connect to other solar modules to create a single solar panel and could not connect to external devices or an electrical grid were classified in 8541.40.60, HTSUS) and HQ H312425, dated December 31, 2020 (holding that SunPower commercial solar panels containing an array of 128 solar cells and junction box, but lacking a microinverter that would allow the panels to supply power to an external load, were classified in 8541.40.6015, HTSUS).
Here, as in the cases cited above, the merchandise is not attached to a microinverter or other device capable of converting direct current electricity into alternating current electricity. Moreover, the technical specifications indicate that the solar laminate does not contain any element that allows it to supply power to an external load. As noted above, you state that the merchandise unit is eventually intended to be connected to other solar modules to create a larger panel. The merchandise therefore will not be classifiable in heading 8501, HTSUS. Instead, we agree that the merchandise will be properly classified by operation of GRI 1 in 8541.40.6015, HTSUS, as “Diodes, transistors and similar semiconductor devices; photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light-emitting diodes (LED); mounted piezoelectric crystals; parts thereof: Other diodes . . . Other: Solar Cells: Crystalline silicon photovoltaic cells of a kind described in statistical note 11 to this chapter: Assembled into modules or made up into panels.”
Eligibility for USMCA Preferential Tariff Treatment
The United States-Mexico-Canada Agreement (“USMCA”) was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). General Note (GN) 11 of the HTSUS implements the USMCA. GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA. GN 11(b) states:
For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country, as defined in subdivision (l) of this note, is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a “good originating in the territory of a USMCA country” only if—
the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries;
the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials;
the good is a good produced entirely in the territory of one or more USMCA countries using nonoriginating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o)); or
…
Here, the merchandise will be produced in Mexico using originating and non-originating materials. Therefore, the merchandise will not qualify as originating pursuant to GN 11(b)(i) or (ii). We must therefore consider whether the merchandise qualifies as originating pursuant to GN 11(b)(iii).
As noted above, the solar laminate will be classified in 8541.40.6015, HTSUS. The applicable rule of origin in GN 11(o)/85.109 requires “[n]o change in tariff classification to a good of subheadings 8541.10 through 8542.90.”
Here, as no change in tariff classification is required for goods of 8541.40.6015, HTSUS, and the solar laminate will be assembled in Mexico, the merchandise will qualify as USMCA originating goods pursuant to GN 11(o)/85.109. Provided that all other requirements are met, the merchandise will be eligible for preferential tariff treatment under the USMCA when imported into the United States and entered for consumption.
HOLDING:
Based on the information provided, the solar laminate will be classified in subheading 8541.40.6015, HTSUS, and will be eligible for preferential tariff treatment under the USMCA when imported from Mexico into the United States and entered for consumption
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.”
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is 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,
Monika R. Brenner, Chief
Valuation and Special Programs Branch