CLA-2-94:OT:RR:NC:N4:463
Willy Gui
Merchandiser
Source Pro Industries LTD.
Workshop No.15 & 18, 10/F.
Metro Centre No. 32 Lam Hing Street
Kowloon Bay, Hong Kong
China
RE: The country of origin of a medicine cabinet
Dear Mr. Gui:
In your letter dated October 24, 2020, a resubmission of your letter dated September 30, 2020, you requested the country of origin of a medicine cabinet (bathroom vanity). You provided a costed bill of materials (BOM), exploded drawings, a workflow diagram, photos of the outer box and other illustrative literature.
The medicine cabinet the subject of this ruling is item no. 2550863. It measures 50.8 cm (W) x 68.6 cm (H) x 14.6 cm (D). It has a mirrored cabinet door measuring 47.3 cm (W) x 51.0 cm (H) positioned at the top, leaving a wooden shelf exposed at the bottom. Two height-adjustable glass shelves reside behind the mirrored door. The top, bottom, solid shelf, sides and back are made of medium density fiberboard (MDF), wood and wood laminate. Two images of the cabinet follow:
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 2 through 6 may then be applied in order.
A reading of Legal Note 2 (including 2(a) and 2(b)) to Chapter 94 of the HTSUS provides, at 2, that the articles (other than parts) referred to in headings 9401 to 9403 are classified in those headings only if they are designed for placing on the floor or ground. At 2(a) and 2(b), however, the following articles are classified in headings 9401 to 9403 even if they are designed to be hung, to be fixed to the wall or to stand one on the other: 2(a) Cupboards, bookcases, other shelved furniture (including single shelves presented with supports for fixing them to the wall) and unit furniture, and 2(b) Seats and beds.
This office finds that the medicine cabinet is within the meaning of furniture as defined by Legal Note 2 to Chapter 94 of the HTSUS. See N039695 and N017550.
Because the subject medicine cabinet is composed of different materials (MDF, wood, wood veneer, glass, mirror, hinges, etc.), it is considered a composite good for tariff purposes. The ENs to the HTSUS, GRI 3 (b) (VIII) state that “the factor which determines essential character will vary between different kinds of goods. It may, for example, be determined by the nature of the materials or components, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.” When the essential character of a composite good can be determined, the whole product is classified as if it consisted only of the material or component that imparts the essential character to the composite good.
In the United States Court of International Trade, The Home Depot, U.S.A., Inc., v. the United States, Slip Op. 06-49, Court No. 00-00061, dated April 7, 2006, the Court considered all factors in evidence to determine essential character and stated that these factors were to be reviewed as a whole. See Slip Op. 06-49 for a listing of factors reviewed.
This office finds that the essential character of the medicine cabinet is imparted by the MDF, wood and wood veneer used to produce the top, bottom, sides, back and solid shelf. These components account for a greater value than the components made of other materials, give the medicine cabinet its form and provide its structure.
The applicable classification number for the medicine cabinet the subject of this ruling, item no. 2550863, will be subheading 9403.60.8081, HTSUS, which provides for “Other furniture and parts thereof: Other wooden furniture: Other: Other.” The rate of duty will be free.
COUNTRY OF ORIGIN
Section 134.1(b), Customs 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.” A substantial transformation occurs when articles lose their identity and become articles having a new name, character, or use. No one factor is decisive.
Per the information provided, the back panel, glass shelves, fixed shelf, top panel, bottom panel, two side panels, doorplate, mirrored front and two hinges are all made in China. The lacquer, 3M foam tape, insert foam, protective foam, paper packing materials and carton, as well as factory overhead (including labor) and factory markup (including profit and taxes) are made in, performed in or accrued in Cambodia. Chinese materials almost exclusively make up the medicine cabinet, forming the front, back, sides and interior. The Cambodian materials perform a secondary role, providing the outer finish (lacquer) and packaging (carton, protective foam, insert foam, 3M tape, and other packing materials). Additionally, the Chinese costs sum to more than half of the total cost of the article and the Cambodian costs sum to less than half of the total cost.
The components are manufactured in and dedicated for use in China, where, as a whole, they have the essential character of an unassembled medicine cabinet. Subsequent to their manufacture in China, they are shipped to Cambodia where they are assembled with a pneumatic stapler and hand tools, painted, inspected and packaged for shipment. The Chinese components do not undergo complex manufacturing in Cambodia but merely assembly and finishing. They do not take on a new name, character or use and thus do not undergo a substantial transformation.
In view of these facts, the medicine cabinet the subject of this ruling, item no. 2550863, maintains its Chinese country of origin subsequent to processing in Cambodia.
TRADE REMEDY Products of China classified under subheading 9403.60.8081, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 9403.60.8081, HTSUS. See U.S. Note 20 to Subchapter III, Chapter 99, HTSUS. The HTSUS is subject to periodic amendment, so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the Section 301 trade remedy, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively.
Duty rates are provided for your convenience 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 https://hts.usitc.gov/current.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Seth Mazze at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division