CLA-2-94:OT:RR:NC:N4:433
Louise Chevanelle
President
Formation Douane Louise Chevanelle Inc.
490 Providence Street
Granby, Quebec J2H 2H6
Canada
RE: The tariff classification and country of origin under the North American Free Trade Agreement (NAFTA) for a knockdown crib from Canada; Article 509
Dear Ms. Chevanelle:
In your letter dated February 25, 2010, on behalf of Groupe Dutailier Inc., you requested a tariff classification ruling.
Model number E5400C4 (Elissa) is a wooden knockdown infant crib imported from Canada. As Dutailier’s customer has choice of color or finish for the crib, all of the parts for the knockdown crib are kept in inventory at the company’s facility until an order is placed. The crib is composed of a headboard and footboard made in China; left and right side panels and left and right crossbars made in Vietnam; mattress support made in Vietnam; and hardware made in Vietnam. The provided bill of materials indicates that the headboard costs $91.80; the footboard costs $76.66; the left and right side panels each cost $24.77; the left and right crossbars each cost $5.91; the mattress support costs $19.69; and the hardware costs $2.31. The total cost of the knockdown crib, which includes finishing operations, painting and packaging of the good while in Canada is $407.59. Illustrative literature indicates that the crib is convertible into a daybed, double bed and a double bed with universal footboard. At time of import the conversion kit, which turns the crib into a bed, is not sold with the crib – the customer needs to order the kit separately.
Classification of goods under the Harmonized Tariff Schedule of the United States (HTSUS) is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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 GRI may then be applied.
Under GRI 2(a), "any reference to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.” By application of GRI 2(a), the knockdown/unassembled crib is classifiable as wooden furniture of a kind used in the bedroom under heading 9403, HTSUS.
The applicable subheading for the knockdown crib will be 9403.50.9040, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Other furniture and parts thereof: Wooden furniture of a kind used in the bedroom: Other; Other; Beds.” The rate of duty will be free.
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 World Wide Web at http://www.usitc.gov/tata/hts/.
Country of Origin Marking
The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.
By enacting 19 U.S.C. 1304, Congress intended to ensure that the ultimate purchaser would be able to know by inspecting the marking on the imported goods the country of which the goods are 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., 27 C.C.P.A. 297, 302 C.A.D. 104 (1940).
Part 134, CBP Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.
In 19 CFR 134.1(b), "country of origin" is defined as: The country of manufacture, production or growth of any article of foreign origin entering the U.S. 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 this part; however for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.
Section 134.1(j), CBP Regulations (19 CFR 134.1(j)), provides that the "NAFTA Marking Rules" are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. A "good of a NAFTA country" is defined in 19 CFR 134.1(g) as an article for which the country of origin is Canada, Mexico, or the U.S. as determined under the NAFTA Marking Rules set out at 19 CFR Part 102.
Section 102.11, CBP Regulations (19 CFR 102.11), sets forth the required hierarchy for determining whether a good is a good of a NAFTA country for marking purposes. The following provisions must be applied sequentially, beginning with part (a)(1):
The following rules shall apply for purposes of determining the country of origin of imported goods other than textile and apparel products covered by §102.21:
(a) The country of origin of a good is the country in which:
(1) The good is wholly obtained or produced;
(2) The good is produced exclusively from domestic materials; or
(3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
Section 102.11 part (b) provides in pertinent part:
where the country of origin cannot be determined under paragraph (a) of this section:
The country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good
Section 102.18 part (b) (1) states “for purposes of identifying the material that imparts the essential character to a good under §102.11, the only materials that shall be taken into consideration are those domestic or foreign materials that are classified in a tariff provision from which a change in tariff classification is not allowed under the §102.20 specific rule or other requirements applicable to the good.” It further states in 102.18 part (b) (2) for purposes of determining which one of two or more materials described in paragraph (b) (1) of this section imparts the essential character to a good under §102.11, various factors may be examined depending on the type of good involved; these factors include, but are not limited to, the following: (i) the nature of each material, such as its bulk, quantity, weight or value; and (ii) the role of each material in relation to the use of the good.
Sections 102.11(a)(1) and 102.11(a)(2) do not apply because the knockdown crib is neither wholly obtained, nor produced exclusively from domestic materials. It is therefore necessary to apply §102.11(a)(3). The relevant §102.20 rules for this heading provides: A change to subheading 9403.10 through 9403.89 from any other subheading outside that group, except from subheading 9401.10 through 9403.89, and except from subheading 9401.90 or 9403.90, when that change is pursuant to General Rule of Interpretation 2(a). In our opinion the headboard and footboard are not articles of unit furniture or separately presented articles of unit furniture classifying such goods in subheading 9403.50, HTSUS, but rather parts of furniture to be classified in subheading 9403.90; accordingly all of the parts of Chinese and Vietnamese origin, excluding the hardware, do not undergo the applicable change in tariff classification, as the knockdown crib is classified pursuant to General Rule of Interpretation 2(a).
It follows from the hierarchy that county of origin must be determined next by Section 102.11 part (b) (1) in conjunction with Section 102.18 (b) (1) and (b) (2). As all of the parts for the knockdown crib do not meet the tariff shift rule of §102.20 (excluding the hardware), we must examine the factors that determine essential character, such as the nature of each of the materials and the role of each material in relation to the use of the good. Each material in the knockdown crib plays an integral part in the make of the unassembled crib; consequently no one material in relation to the use of the good can be singled out. Examining the cost of each material, we find that the headboard is valued higher than all of the other materials, while illustrative literature portrays the headboard as rising above that of the footboard. It is the headboard of Chinese origin that imparts the essential character to the knockdown crib, resulting in country of origin of the good China.
Pursuant to 19 U.S.C. 1304(a)(3)(D) and 19 C.F.R. 134.32(d), an article for which the marking of the containers will reasonably indicate the origin of the article is excepted from being marked on the good itself. This exception applies in cases when the article is imported in a properly marked container and the reviewing CBP official is satisfied that the ultimate purchaser will receive the article in its original unopened container. Review of the illustrative literature indicates a retail sales box, packed with the knockdown crib inside, ready to be received by the customer. In accordance with 19 C.F.R. 134.32(d) the marking of the outer-box with country of origin China or similar words to that effect satisfies the marking requirements.
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 Neil H. Levy at (646) 733-3036.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division