CLA-2 OT:RR:CTF:TCM H301075 TPB
Ralph Natale
Executive VP
American Shipping Co., Inc.
250 Moonachie Rd.
Moonachie, NJ 07074
Re: Tariff classification of a product named “Sobro”, a table with integrated electronics and refrigeration.
Dear Mr. Natale:
We are writing in response to your correspondence, dated August 20, 2018, in which you requested a binding tariff classification ruling from U.S. Customs and Border Protection (CBP) on behalf Storebound LLC. Your ruling request concerns the tariff classification of a product referred to as the SOBRO under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
You request a tariff classification ruling concerning a product named “Sobro,” a so-called “smart” coffee table.
The product at issue comes in the form of a coffee table (43.1 x 22.8 x 17.5 inches). Its construction material, i.e., wood, metal, plastics, or other, is not specified in the request, although it is equipped with a tempered glass tabletop with an integrated touch-panel control. It also comes equipped with a refrigerated drawer (adjustable from 37 – 54 degrees Fahrenheit), two storage drawers, a wireless Bluetooth speaker, two USB ports, two 120V outlets, an AUX IN connector, and LED lighting.
ISSUE:
What is the tariff classification of the Sobro smart coffee table?
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the United States (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 may then be applied in their appropriate order.
GRI 3 provides, in pertinent part, as follows:
When, by application of rule 2(b) or for any other reason, good are, prima facie, classifiable under two or more headings, classification shall be effected as follows:
(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System (HS) at the international level. While not legally binding, the ENs provide a commentary on the scope of each heading of the HS and are thus useful in ascertaining the proper classification of merchandise. It is CBP’s practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The ENs to GRI 3(b) provide, in pertinent part, that:
(VII) In all these cases the goods are to be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
(VIII) The factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.
A number of HTSUS provisions merit consideration for this product, such as heading 8418, which provides for refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heading 8518, which provides for loudspeakers, whether or not mounted in their enclosures; heading 8536, which provides for electrical apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits (for example, switches, fuses, lightning arresters, voltage limiters, surge suppressors, plugs and other connectors, junction boxes), for a voltage not exceeding 1,000 V; heading 9403, which provides for other furniture and parts thereof; and heading 9405, which provides for lamps and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included.
As indicated above, GRI 3(b) provides guidance for mixtures, composite goods, and goods put up in sets for retail sale. For purposes of this rule, Explanatory Note IX to GRI 3(b) provides that, “composite goods made up of different components shall be taken to mean not only those in which the component are attached to each other to form a practically inseparable whole but also those with separable components, provided these components are adapted one to the other and are mutually complementary and that together they form a whole which would not normally be offered for sale in separate parts.” (Emphasis original). As such, the Sobro could be described as a composite good, because it consists, mainly, of furniture of Chapter 94 incorporating a “refrigerator” of Chapter 85 and various other electrical components, such as a Bluetooth speaker, power outlets, and USB connectors.
Under GRI 3(b), composite goods must be classified according to the material or component that imparts the article with its essential character. The “essential character” of an article is “that which is indispensable to the structure, core or condition of the article, i.e., what it is.” Structural Industries v. United States, 360 F. Supp. 2d 1330, 1336 (Ct. Int’l Trade 2005). EN VIII to GRI 3(b) explains that “[t]he factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of the constituent material in relation to the use of the goods.” Several court decisions on the essential character for GRI 3(b) purposes have looked primarily to the role of the constituent material in relation to the use of the goods. See Estee Lauder, Inc. v. United States, 815 F. Supp. 2d 1287, 1296 (Ct. Int’l Trade 2012); Structural Industries, 360 F. Supp. 2d 1330; Conair Corp. v. United States, 29 C.I.T. 888 (2005); Home Depot USA, Inc. v. United States, 427 F. Supp. 2d 1278 (Ct. Int’l Trade 2006), aff’d 491 F.3d 1334 (Fed. Cir. 2007).
In the view of this office, the essential character of the Sobro is that of furniture. Although there are additional functions, namely lighting, charging and refrigerating, the product functions, essentially, as a piece of household furniture with additional features that supplement or enhance its usefulness in that regard. This conclusion is supported by the reasoning of the courts in previous decisions which relied upon GIR 3(b).
It is noted that the EN to heading 8418 states that certain kinds of compression-type refrigerators incorporating a compressor, condenser and evaporator are classified in that heading, including cabinets or other furniture or appliances incorporating a complete refrigerating unit or an evaporator of a refrigerating unit, whether or not equipped with ancillary devices such as agitators, mixers, moulds. These appliances include domestic refrigerators, refrigerated show cases and counters, ice cream or frozen food storage containers, refrigerated water or beverage fountains, milk cooling vats, beer coolers, ice cream makers, etc.
Further, the General Explanatory Note to Chapter 94 defines “furniture” as any “moveable” articles (not included under other more specific headings of the Nomenclature), which have the essential characteristic that they are constructed for placing on the floor or ground, and which are used, mainly with a utilitarian purpose, to equip private dwellings, hotels, etc.
As indicated above, the ENs constitute the official interpretation of the HS at the international level and while not legally binding, they provide a commentary on the scope of each heading of the HS and are thus useful in ascertaining the proper classification of merchandise. In this case, the examples listed in the EN of the cabinet-type refrigerated products of heading 8418 indicate that the refrigeration function is primary: refrigerated showcases, beer coolers, refrigerated water fountains, etc. We find these distinguishable from the product at issue, where only a portion of the device is used for keeping food or beverages cool. The bulk of the Sobro table is for utilitarian use as well as some ability to power or charge batteries on electronic devices. As such, Note 1(e) to Chapter 94, which excludes furniture specially designed as parts of refrigerating or freezing equipment of heading 84.18, is not applicable.
In conclusion, upon evaluation of the form and function of those components at issue, CBP finds that the essential character of the product is imparted by the coffee table, classified in heading 9403, HTSUS.
HOLDING:
By application of GRI 3(b), the Sobro “smart” coffee table is classified in heading 9403, HTSUS, which provides for “other furniture and parts thereof”. The specific subheading shall be determined by the Sobro’s constructed material, i.e., metal, wood, plastics, or other and in what environment the product is intended to be used. The 2018 column one, general rate of duty will be free.
Effective July 6, 2018, the Office of the United States Trade Representative (USTR) imposed an additional tariff on certain products of China classified in the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(b), HTSUS. The USTR imposed additional tariffs, effective August 23, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(d), HTSUS. Subsequently, the USTR imposed further tariffs, effective September 24, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(f) and U.S. Note 20(g), HTSUS. For additional information, please see the relevant Federal Register notices dated June 20, 2018 (83 F.R. 28710), August 16, 2018 (83 F.R. 40823), and September 21, 2018 (83 F.R. 47974). Products of China that are provided for in subheading 9903.88.01, 9903.88.02, 9903.88.03, or 9903.88.04 and classified in one of the subheadings enumerated in U.S. Note 20(b), U.S. Note 20(d), U.S. Note 20(f) or U.S. Note 20(g) to subchapter III shall continue to be subject to antidumping, countervailing, or other duties, fees and charges that apply to such products, as well as to those imposed by the aforementioned Chapter 99 subheadings.
Certain products of China classified under subheadings 9403, HTSUS, unless specifically excluded, are subject to the additional 10 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading in addition to the subheading listed above.
The tariff is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Notice cited above and the applicable Chapter 99 subheading.
The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at http://www.usitc.gov/.
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, Acting Chief
Electronics, Manufacturing, Automotive,
and International Nomenclature Branch