CLA-2 OT:RR:CTF:EMAIN H299136 TPB
Mr. G. R. Tuttle
George R. Tuttle Law Offices
1100 Larkspur Landing Circle, Suite 385
Larkspur, CA 94939
RE: Classification of a crystalline silicon photovoltaic (“CSPV”) panel; Applicability of safeguard measures on imports of certain CSPV products.
Dear Mr. Tuttle:
This is in response to your letter of June 7, 2018, in which you request a binding ruling as to the classification of a certain crystalline silicon photovoltaic (“CSPV”) panel. Further, you seek determination as to whether that CSPV panel is subject to the February 7, 2018 safeguard measure on imports of certain CSPV products implemented pursuant to Section 201 of the Trade Act of 1974, as amended (19 U.S.C. §2252) (“Solar 201 safeguard”). Our determination as to the classification of the product and the applicability of the Solar 201 safeguard is set forth below.
FACTS:
Your June 7, 2018 letter (“ruling request”) describes the article to be imported as an Arlo Solar Panel Charger (VMA4600). You indicate that the VMA4600 is a fully assembled CSPV panel that is designed to provide off-grid and portable charging to other products in the Arlo security family.
The VMA4600 has a CSPV panel measuring 113 mm (W) x 200 mm (L) with a
maximum surface area of 226cm2, and produces 6volts / 2w of raw DC electrical current. It also has charging circuity and a USB port for connecting to and charging batteries for other Arlo devices. The circuitry includes two DC-to-DC converters, a load switch, and a microprocessor. The microprocessor can determine the correct voltage output for the charging device, whether it is 9V, 6V or 5V. The VMA4600 will output 5V for any non-Arlo product. In the event of a communication fail (e.g., a non-Arlo product), VMA4600 will output 5V, which can be used for charging other devices. The VMA4600 is said to be imported in retail packaging along with a 6-foot power cable, mounting hardware, a quick start guide and a decal.
ISSUE:
What is the classification of the Arlo Solar Panel Charger and does it fall within the scope of the Solar 201 safeguard, which would subject it to increased duties.
LAW AND ANALYSIS:
CLASSIFICATION
Merchandise imported into the United States is classified under the Harmonized Tariff Schedule of the United States (HTSUS). Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
GRI 1 requires that classification be determined first 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 heading and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
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).
With regard to the classification of the VMA4600, the HTSUS headings and subheadings under consideration are as follows:
8501 Electric motors and generators (excluding generating sets):
Other DC motors:
8501.31 DC generators: Of an output not exceeding 750 W:
8501.31.80 Generators
8541 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:
8541.40 Photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light-emitting diodes (LED):
8541.40.60 Other diodes
You note in your ruling request that the VMA4600 converts solar energy into electrical energy and charges the constituent device to which it is connected. The solar panel converter board contained in the panel converts solar power from the panel to either 5V, 9V, or passes the raw panel voltage through to another device in order to operate that device and charge its batteries.
You further note that EN 85.01 (II) describes two categories of items that are specifically included in heading 85.01:
(II) ELECTRIC GENERATORS
Machines that produce electrical power from various energy sources
(mechanical, solar, etc.) are classified here [in heading 8501], provided
they are not more specifically covered by any other heading of the
Nomenclature.
…
The heading also covers photovoltaic generators consisting of
panels of photocells combined with other apparatus, e.g., storage
batteries and electronic controls (voltage regulator, inverter, etc.) and
panels or modules equipped with elements, however simple (for
example, diodes to control the direction of the current), which supply
the power directly to, for example, a motor, an electrolyser.
In these devices, electricity is produced by means of solar cells which
converts solar energy directly into electricity (photovoltaic conversion).
[Emphasis added.]
In addition, you indicate that the EN to heading 85.41 provides, in pertinent part:
(B) PHOTOSENSITIVE SEMICONDUCTOR DEVICES
This group comprises photosensitive semiconductor devices in which
the action of visible rays, infra-red rays or ultra-violet rays causes
variations in resistivity or generates and electromotive force, by the
internal photoelectric effect.
…
The main types of photosensitive semiconductor devices are:
…
(2) Photovoltaic cells, which convert light directly into electrical energy without the need for an external source of current. […]
Special categories of photovoltaic cells are:
(i) Solar cells, silicon photovoltaic cells which convert sunlight
directly into electric energy. They are usually used in groups such as
source of electric power, e.g., in rockets or satellites employed in space
research, for mountain rescue transmitters.
The heading also covers solar cells, whether or not assembled in
modules or made into panels. However, the heading does not cover
panels or modules equipped with elements, however simple, (for
example, diodes to control the direction of current), which supply the
power directly to, for example, a motor, an electrolyser (heading
85.01). [Emphasis added]
Finally, you cite to Note 4 to Section XVI that states:
Where a machine (including a combination of machines) consists of
individual components (whether separate or interconnected by piping,
by transmission devices, by electric cables or by other devices) intended
to contribute together to a clearly defined function covered by one of
the headings in chapter 84 or chapter 85, then the whole falls to be
classified in the heading appropriate to that function.
As you indicated, CBP has in the past classified devices that capture solar rays, convert those rays into electricity and transmit that electricity to external devices (i.e, “external load”). According to the information you have provided, the Arlo Solar Panel Charger (VMA4600) contains a solar panel and two DC to DC converters/regulators, along with other electronics. These components form a functional unit where the panel generates DC electricity, which is regulated by the converters/regulators, and the output is ready for direct use by the batteries in the connected devices that constitutes an electrical load. As such, we agree that the product in question is classifiable under heading 85.01, subheading 8501.31.80. However, goods classified under subheading 8501.31.80 HTSUS are further directed to Chapter 99, HTSUS, and more specifically, subheading 9903.45.25.
APPLICABILITY OF SAFEGUARD MEASURES ON IMPORTS OF CERTAIN CRYSTALLINE SILICON PHOTOVOLTAIC CELLS (CSPV) PRODUCTS
The Solar 201 safeguard was implemented in accordance with Presidential Proclamation 9693, dated January 23, 2018, which was promulgated in pursuant to Section 201 of the Trade Act of 1974, as amended (19 U.S.C. §2252). See Fed. Reg. Vol. 83, No. 17 (Jan. 25, 2018). The Solar 201 safeguard establishes a tariff-rate quota and additional duties on imports of CSPV “cells” and “modules.” Id. In particular, the proclamation calls for amendment of Chapter 99, Subchapter III, HTSUS, to create subheadings 9903.45.21 and 9903.45.22, which apply to CSPV cells, and 9903.45.25, which applies to CSPV modules. Id. The proclamation also calls for amendment of Chapter 99, Subchapter III, to create a new legal note, Note 18, to define the products classifiable in subheadings 9903.45.21 to 9903.45.25 and set forth the additional rates of duties to be applied to these products. Id. These amendments to Chapter 99 went into effect on February 7, 2018 and will remain in effect until February 6, 2022. Id.
For purposes of your argument that the VMA4600 is not subject to the additional rates of duty, Note 18 to Subchapter III of Chapter 99 provides, in relevant part, as follows:
18.
…
…
Subheading 9903.45.25 shall not cover the following goods, whether or not separate statistical reporting numbers therefor may appear in chapters 1 through 97 of the tariff schedule:
* * *
(4) off-grid and portable CSPV panels, whether in a foldable case or in rigid form containing a glass cover, where the panels have the following characteristics:
a total power output of 100 watts or less per panel;
a maximum surface area of 8,000 cm2 per panel;
do not include a built-in inverter;
where the panels have glass covers, such panels must be in individual retail packaging (for purposes of this provision, retail packaging typically includes graphics, the product name, its description and/or features, and foam for transport)
* * *
Subject to the provisions of subdivision (c)(iii) of this note, for purposes of subheading 9903.45.25 to this subchapter, the term “modules” shall include the following goods provided for in subheading 8541.40.60 of the tariff schedule: a module is a joined group of CSPV cells, as such cells are defined in subdivision (c) of this note, regardless of the number of cells or the shape of the joined group, that are capable of generating electricity. Also included as a “module” are goods each known as a “panel” comprising a CSPV cell that has undergone any processing, assembly, or interconnection (including, but not limited to, assembly into a laminate). Such CSPV cells assembled into modules or made up into panels include goods of a type reported for statistical purposes under statistical reporting number 8541.40.6020. Such goods also include (i) CSPV cells which are presented attached to inverters or batteries of subheading 8501.61.00 or 8507.20.80, respectively; and (ii) CSPV cells classifiable as DC generators of subheading 8501.31.80. [Emphasis added]
You note that Proclamation 9693 excludes certain particular products from the scope of the safeguard measures. One such exclusion is set forth in Chapter 99, Subchapter III, Note 18(c)(iii)(4), which provides for certain off-grid and portable CSPV panels. To qualify for this exclusion, certain enumerated characteristics must be present on the product at issue.
You state that the VMA4600 is a fully assembled CSPV panel that is designed to provide off-grid and portable electrical power. The VMA4600:
has a total power output of 2 watts per panel;
has a maximum surface area of 226cm2 per panel;
does not include a built-in inverter (inverters convert the DC electricity to alternating current (AC) electricity, which is the type used by your home.) The VMA4600 includes two DC to DC converters but it does not include a DC to AC inverter to convert the DC electricity to alternating current (AC) electricity; and
is imported in its individual retail packaging with (1) solar panel, (1) 6 ft. power cable, (1) mount, (1) mounting screw kit, (1) quick start guide, (1) and Arlo logo decal.
You further note that while the solar panel for the VMA4600 has a plastic rather than glass cover, this factor alone does not preclude the product from qualifying for the exemption, as the exemption reads “where the panels have glass covers, such panels must be in individual retail packaging …” You contend that the language of the exemption does not exclude products with non-glass covers but only provides that if the panel has a glass cover, then it is to be imported in its retail packaging. The VMA4600 is imported in its retail packaging and therefor, in your view, qualifies for the exemption provided in Presidential Proclamation 9693. The plain language of Note 18, however, does not support this proposition.
Your primary contention is that the CSPV modules are exempt from the Solar 201 safeguard on account of the exclusion set forth in Note 18(c)(iii)(4) to Chapter 99. Note 18(c)(iii)(4) states that subheading 9903.45.25 shall not cover off-grid and portable CSPV panels, whether in a foldable case or in rigid form containing a glass cover, where the panels have the following characteristics…. [Underlining added for emphasis].
As it reads, this portion of the Note applies to two particular types of off-grid and portable CSPV panels: (1) those in a foldable case; or (2) those in rigid form containing a glass cover, where those two types of products also have a series of characteristics that the Note further describes. These words are far from disposable, as they establish the scope of the exclusion and ignoring these words changes the scope of the Note. If the exclusion was intended to cover all kinds of rigid-form CSPV panels, the additional language, “containing a glass cover” would not have been included. As read, all of these characteristics must be present in these types of products in order to be excluded from the safeguard measure. Accordingly, Subpart (D), which you rely upon, applies only to off-grid and portable CSPV panels in rigid form containing a glass cover which are described above in Note 18(c)(iii)(4) and requires these panels to be in individual retail packaging.
Based on its description, the VMA4600 comes neither in a foldable case nor with a glass cover on its rigid form. Although you contend that this factor alone does not preclude the product from qualifying for the exemption, citing subsequent texts in the Note, the product clearly does not fall within the scope of the Note based on the criteria in Note 18(c)(iii)(4).
Accordingly, because the product at issue is not subject to the exemption set out in Note 18(c)(iii)(4) to Chapter 99, it falls within the scope of subheading 9903.45.25, HTSUS.
HOLDING:
Based on the facts of this case, the product at issue is classified under subheading 8501.31.80, HTSUS, by application of GIR 1 (Note 4 to Section XVI) and 6.
CSPV modules are subject to the Solar 201 safeguard. As products of subheading 9903.45.25, they are dutiable at the rates set forth in Chapter 99, Subchapter III, Note 18(f), HTSUS, in addition to any rates applicable under subheading 8501.31.80, HTSUS.
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,
Gregory Connor, Chief
Electronics, Machinery, Automotive, and
International Nomenclature Branch