CLA-2-85:OT:RR:NC:N2:220
Brian Roth
Solarmass Energy Group Ltd.
555 Burrard Street
c/o WeWork, Suite 200
Vancouver, V7X1M8
Canada
RE: The tariff classification and country of origin marking of photovoltaic roof tiles from Canada
Dear Mr. Roth:
In your letter dated April 4, 2019 you requested a tariff classification and country of origin ruling.
The merchandise under consideration is identified as the Ergosun Integrated Solar Roof Tile (Solar Tile) which consists of laminated solar cells adhered to a 42 cm by 33 cm cement roof tile. The lamination is comprised of monocrystalline photovoltaic cells and busbars which are sandwiched between layers of ethylene vinyl acetate, a printed circuit board, ethylene tetrafluoroethylene, and an insulating poly-vinyl fluoride backing. On the underside of the lamination is a male oriented electrical connector containing a blocking diode and an electrical fuse. We would note that the male connector serves as one half of the junction box. The female connector, which is not part of this review, serves as the other half of the junction box and is joined to the Roof Tile post importation.
In your request you state that the laminated photovoltaic panel is imported into Canada from China where Solarmass Energy Group Ltd. (Solarmass) cuts a hole in the tile to provide access to the electrical connections in the junction box from the underside of the tile. Solarmass then bonds the panel to the cement roof tile with adhesives. The Solar Tiles are rated at 15 W output. You intend to import the assemblies into the United States for use by consumers and businesses.
You suggest that the Solar Tile is correctly classified under subheading 8541.40.6020, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light-emitting diodes: Other diodes: Other: Solar cells: Assembled into modules or made up into panels. We disagree.
Based on the information provided the Solar Tiles have the ability to generate and supply electric current. The male connector, which is permanently affixed to the underside of the lamination, is configured to supply the generated electricity to an electrical load. As such, classification under subheading 8541.40.6020, HTSUS, is not appropriate.
The applicable subheading for the Ergosun Integrated Solar Roof Tile will be 8501.31.8000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Electric motors and generators (excluding generating sets): other DC motors; DC generators: of an output not exceeding 750 W: Generators: Photovoltaic generators of a kind described in statistical note 9 to this chapter.” The general rate of duty is 2.5% ad valorem.
With regard to the country of origin of the subject generators, you state the Solar Tile consists of solar cells from Taiwan which are laminated into a module in China. The production process in China consists of assembling the busbars and male junction box, and then laminating the seven layers to form a single photovoltaic panel. At this stage of production, the Chinese lamination is considered a photovoltaic generator and in our view, upon importation into Canada, the lamination is classified under heading 8501, HTSUS. As mentioned previously, you indicate that the production process in Canada consists of cutting a hole in the center of the cement tile and bonding it to the lamination with adhesives. The cement tile, which is of U.S. origin, once combined with the lamination forms an assembled Solar Tile.
In determining the country of origin marking of the Solar Tile, Section 304 of the 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 container) will permit in such a manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. The regulations implementing the requirements and exception to 19 U.S.C. § 1304 are set forth in Part 134, Customs and Border Protection Regulations (19 C.F.R. Part 134).
19 C.F.R. § 134.1(b) provides as follows:
Country of origin means 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” within the meaning of this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.
Since Canada is a NAFTA country, the NAFTA Marking Rules must be applied in determining the country of origin for purposes of marking.
Part 102, Customs and Border Protection Regulations (19 C.F.R. Part 102), sets forth the NAFTA Marking Rules. Section 102.11 provides a required hierarchy for determining the country of origin of a good for marking purposes. See 19 C.F.R. § 102.11. Applied in sequential order, the required hierarchy establishes that the country of origin of a good is the country in which:
(a)(1) The good is wholly obtained or produced;
(a)(2) The good is produced exclusively from domestic materials; or
(a)(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.
Sections 102.11(a)(1) and 102.11(a)(2) do not apply to the facts presented in this case because the assembled Solar Tile is neither wholly obtained nor produced exclusively from “domestic” materials. Because the analysis of sections 102.11(a)(1) and 102.11(a)(2) does not yield a country of origin determination, we look to section 102.11(a)(3). “Foreign material” is defined in 19 C.F.R. § 102.1(e) as “a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced.” The applicable rule for subheading 8501.31.8010, HTSUS, in section 102.20 requires:
A change to heading 8501 from any other heading.
The foreign components used during the Canadian assembly operations are identified as the photovoltaic lamination from China, the cement tile and adhesives from the United States. After a thorough review of the production details of the Solar Tile, it is noted that the Chinese lamination, which is classifiable under 8501.31.8010, HTSUS, prevents the Solar Tile from satisfying the heading change rule provided in section 102.11(a)(3). And in our view, pursuant to section 102.11(b) which requires that we identify the single material that imparts the essential character of the assembly, the lamination and its function of generating electricity provides the essential character for the Solar Tile.
As a result of the foregoing, the country of origin of the Solar Roof Tile for marking purposes will be the country of the article which imparts the essential character of the entire assembly, which is identified as the photovoltaic generator produced in China. While the NAFTA marking rules contained in 19 C.F.R. Part 102 will determine the country of origin for marking purposes, the substantial transformation test will determine the country of origin for purposes of applying current trade remedies under Section 301, Section 232, and Section 201. Under the substantial transformation test, we find the country of origin will also be China. See United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (1940); National Juice Products Ass’n v. United States, 628 F.Supp. 978 (Ct. Int’l Trade 1986);
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. Products of China classified under subheading 8501.31.8010, HTSUS, unless specifically excluded, are subject to the additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.02, in addition to subheading 8501.31.8010, HTSUS, listed above.
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 Karl Moosbrugger at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division