CLA-2-84:OT:RR:NC:1:104
Mr. Phillip S. Scherer
Seahorse Equipment Limited
41 Whiore Avenue
Tauriko,
Tauranga 3110
New Zealand
RE: The tariff classification of line haulers from New Zealand
Dear Mr. Scherer:
In your letter dated December 9, 2014, you requested a tariff classification ruling.
The Seahorse Electric Kontiki Line Hauler is an autonomous unmanned device designed to haul/pull a line from the shore or other launching location out across a body of water in a pre-determined direction for up to 30 minutes and 2200 yards (2000 meters) in distance.
You state that while the Hauler is mainly used to tow a fishing line from the beach out to sea, it can also be used to pull other types of lines off shore such as lines used in geo-kinetic seismic surveying for the oil industry and rescue lines into difficult to reach locations. The GPS Seahorse Electric Kontiki Line Hauler has a built-in GPS guided autopilot that automatically steers the GPS Seahorse Electric Kontiki Line Hauler to a pre-determined waypoint. The STD Seahorse Electric Kontiki Line Hauler does not have an autopilot system. It is a manually operated unit which requires the user to determine what the water conditions are, set the rudder prior to launching and determine the course. Apart from the autopilot difference, the two models are very similar in both form and function.
The Hauler consists of a hollow red polyethylene plastic body and is approximately 4.5 feet (1350mm) long and 43lbs (19.5kg) in weight. The rudder is fitted at the bow. On the GPS Seahorse Electric Kontiki Line Hauler, the rudder is controlled by an electronic servo which in turn is controlled by the autopilot controller. On the STD Seahorse Electric Kontiki Line Hauler, the rudder is manually set before launching. Behind the rudder is the mounted Mercury brand electric outboard trolling motor fitted into an aluminum motor frame. The Mercury supplied Quicksilver branded Electric 500 watt outboard trolling motor produces 46 lbs of thrust on full speed which produces an average top speed of approximately 3 to 4 mph. The electric trolling motor is powered by two 12 volt Sealed Lead Acid (SLA) batteries totaling 22 amps hours. The motor is said to be sourced from the USA. The batteries and the autopilot control unit are located inside the Hauler’s body. The control unit allows the user to set and clear the desired course and pre-select a maximum run time. Once the timer is set, the user can then start the motor and select the speed. The user uses a magnet to activate the switches on the electronic control unit to make these settings.
An orange warning flag is mounted on top of the body. The flag helps the user to view the Hauler from the shore or launching site and also allows other water users to see the Hauler floating on the water. A light activated strobe light also allows the user and other water users to see the Hauler at night.
At the stern of the Hauler, there is an aluminum submarine style hatch that gives the user access to the batteries stored inside the Hauler’s body. The user can charge any batteries with the supplied battery charger. Also at the stern is an aluminum towpoint that allows the user to attach a line to the Hauler.
The Seahorse Electric Kontiki Line Hauler (body with attached electric trolling motor and frame) is imported packaged together with two 12 volt SLA batteries, one battery charger, one starter magnet, one orange warning flag, one carabiner clip, one operator’s manual and one instructional DVD.
General Rule of Interpretation (GRI) 1, Harmonized Tariff Schedule of the United States (HTSUS), states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes. Goods that are, prima facie, classifiable under two or more headings, are classifiable in accordance with GRI 3, HTSUS. GRI 3(a) states, in part, that when two or more headings each refer to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific, even if one heading gives a more precise description of the good. The instant good consists of at least two different articles that are, prima facie, classifiable in different subheadings. It consists of articles put up together to carry out a specific activity (i.e., the hauling of line across a body of water). Finally, the articles are put up in a manner suitable for sale directly to users without repacking. Therefore, the good in question is within the term "goods put up in sets for retail sale." GRI 3(b) states, in part, that goods put up in sets for retail sale, which cannot be classified by reference to GRI 3(a), are to be classified as if they consisted of the component which gives them their essential character. It is the opinion of this office that the essential character is imparted by the Hauler.
By application of GRI 3(b), the applicable subheading for the GPS Seahorse Electric Kontiki Line Hauler and the STD (Standard) Seahorse Electric Kontiki Line Hauler will be 8479.89.9899, HTSUS, which provides for Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter, parts thereof: Other machines and mechanical appliances: Other: Other: Other. The rate of duty will be 2.5% ad valorem.
In your letter, you state that the trolling motor is of American origin. Components of American origin which are sent to the New Zealand to be assembled into the line haulers may be eligible for classification in subheading 9802.00.80, HTSUS, which provides for articles, except goods of heading 9802.00.90, HTSUS, and goods imported under provisions of subchapter XIX of this chapter and goods imported under provisions of subchapter XX, assembled abroad in whole or in part of fabricated components, the product of the United States, which (a) were exported in condition ready for assembly without further fabrication, (b) have not lost their physical identity in such articles by change in form, shape or otherwise, and (c) have not been advanced in value or improved in condition abroad except by being assembled and except by operations incidental to the assembly process such as cleaning, lubricating and painting.
All three requirements of subheading 9802.00.80, HTSUS, must be satisfied before a component may receive a duty allowance. An article entered under subheading 9802.00.80, HTSUS, is subject to duty upon the full value of the imported assembled article less the cost or value of such U.S. components, upon compliance with the documentary requirements of section 10.24 of the Customs Regulations (19 CFR 10.24).
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/.
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 Patricia O’Donnell at [email protected].
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division