CLA-2-73:OT:RR:NC:N1:113
Mr. Ralph Natale
American Shipping Company Inc.
250 Moonachie Road
Moonachie, NJ 07074
RE: The tariff classification, country of origin and country of origin marking for key rings from China
Dear Mr. Natale:
In your letter dated November 12, 2018, on behalf of your client Myron Corporation, you requested a tariff classification, country of origin and country of origin marking ruling. In response to our requests for additional information, this office received answers to our questions in your letters dated December 28, 2018 and March 1, 2019. Pictures, advertising/marketing literature and a sample of the key rings were provided with your ruling request and will be returned to your office.
The articles for which you are requesting a ruling are identified as promotional key rings that will be imported and sold in three styles including the KR025 Chelsea II Key Ring, the KR171 Chelsea Matte Key Ring and the SKR Chrome Key Ring. You stated in your letter dated November 12, 2018 that “The split ring will be made in India, and sent over to China, where it will be attached to either a metal or plastic key chain body.” The subject key rings will be imported without the promotional messages on the key rings. After importation, Myron Manufacturing Inc., will attach the customer specific messages to the key chain bodies.
The KR025 Chelsea II Key Ring will consist of a steel plated split wire ring attached to a zinc and stainless steel key chain body. The KR171 Chelsea Matte Key Ring will consist of a steel plated split wire ring attached to a die cast aluminum and stainless steel key chain body. The SKR Chrome Key Ring will consist of a steel plated split wire ring attached to a zinc chain connected to a plastic coated steel molded key chain body.
Each key ring under consideration is a composite article that consists of components that are classified in different headings. The KR025 Chelsea II Key Ring consists of steel and zinc components, the KR171 Chelsea Matte Key Ring consists of steel and aluminum components, and the SKR Chrome Key Ring consists of steel and zinc components. We note that that each key ring is composed of more than one base metal. Section XV, Note 7 of the Harmonized Tariff Schedule of the United States (HTSUS), states that the classification of composite articles of base metal containing two or more base metals are to be treated as articles of the base metal that predominates by weight over each of the other metals. Based on the information provided to our office, the metal in the KR025 Chelsea II Key Ring that predominates by weight is zinc, the metal in the KR171 Chelsea Matte Key Ring that predominates by weight is aluminum and the metal in the SKR Chrome Key Ring that predominates by weight is steel. Therefore, the KR025 Chelsea II Key Ring is classifiable under heading 7907 which provides for other articles of zinc, the KR171 Chelsea Matte Key Ring is classifiable under heading 7616 which provides for other articles of aluminum and the SKR Chrome Key Ring is classifiable under heading 7326 which provides for other articles of steel.
The applicable subheading for the KR025 Chelsea II Key Ring will be 7907.00.6000, HTSUS, which provides for other articles of zinc, other. The rate of duty will be 3 percent ad valorem.
The applicable subheading for the KR171 Chelsea Matte Key Ring will be 7616.99.5175, HTSUS, which provides for other articles of iron or steel, other articles of iron or steel wire, other. The rate of duty will be 2.5 percent ad valorem.
The applicable subheading for the SKR Chrome Key Ring will be 7326.20.0090, HTSUS, which provides for other articles of iron or steel, other articles of iron or steel wire, other. The rate of duty will be 3.9 percent ad valorem.
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 https://hts.usitc.gov/current. 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). See also “Notice of Action and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation” (June 20, 2018, 83 F.R. 28710). 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 7326.20.0090, 7616.99.5175 and 7907.00.6000, 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., 9903.88.03, in addition to subheading 7326.20.0090, 7616.99.5175 and 7907.00.6000, HTSUS, 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.
In your letter, you also requested a ruling on the country of origin and marking for the KR025 Chelsea II Key Ring, the KR171 Chelsea Matte Key Ring and the SKR Chrome Key Ring. You indicated in your letter that the steel split wire rings will be made in India. The split rings will be shipped to China where they will be attached to metal key chain bodies.
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 in pertinent part 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.
Two court cases have considered whether imported parts combined in the U.S. with domestic parts were substantially transformed for country of origin marking purposes. In the first case, United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 at 270 (1940), the court held that imported wood brush block and toothbrush handles which had bristles inserted into them in the U.S. lost their identity as such and became new articles having a new name, character and use. The second case involved imported shoe uppers which were combined with domestic soles in the U.S. The imported uppers were held in Uniroyal, Inc. v. United States, 542 F. Supp. 1026, 3 CIT 220 (CIT 1982), to be the "essence of the completed shoe" and therefore, not substantially transformed.
The manufacturing process in China consists of the assembly of the steel split wire rings made in India to the metal key chain bodies made in China. It is the opinion of this office that although the assembly process of the ring in China is not exceedingly complex, it becomes an integral part when combined with the Chinese key chain body in China. Although not determinative alone, one factor to consider is that the key chain body parts represent the largest value of the completed articles. Therefore, the country of origin of the KR025 Chelsea II Key Ring, the KR171 Chelsea Matte Key Ring and the SKR Chrome Key Ring is China.
Regarding the marking, Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.41(b), Customs Regulations (19 CFR 134.41(b)), mandates that the ultimate purchaser in the U.S. must be able to find the marking easily and read it without strain. Section 134.1(d), defines the ultimate purchaser as generally the last person in the United States who will receive the article in the form in which it was imported. Based on the information provided, after importation, promotional messages will be attached to the key chain bodies. This will not result in a substantial transformation. Therefore, the ultimate purchaser of the KR025 Chelsea II Key Ring, the KR171 Chelsea Matte Key Ring and the SKR Chrome Key Ring will be the recipients of the key chains.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 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 Ann Taub at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division