CLA-2-85:OT:RR:NC:N2:212
Jason Carey
Aspire Group NA Limited
1-498 Markland Street
Markham, Ontario L6C1Z6
Canada
RE: The country of origin of an emergency roadside kit
Dear Mr. Carey:
In your letter dated January 6, 2019, you requested a country of origin ruling
The merchandise at issue is described as an emergency roadside kit. The kit is meant to be kept within the user’s vehicle and contains a variety of items that allow the user to address a number of roadside emergency situations. The full list of contents is as follows: a PVC carrying case, jumper cables, tow strap, flashlight, D-cell battery, emergency poncho, knit gloves, first aid kit, and a registration card.
Though classification is not a specific issue with this request, this office finds it prudent to establish the correct classification prior to proceeding with the country of origin analysis. Headquarters Ruling H031458 is instructive as it states that emergency kits should be classified according to their essential character as established under General Rule of Interpretation (GRI) 3(b), which states “Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. The essential character will vary according to each kit’s contents.”
After review of the subject kit, it is the opinion of this office that, for the purposes of establishing classification, the jumper cables impart the essential character of the completed emergency kit. This decision is based on the fact that the jumper cables carry the highest value as well as our decision that they play the integral role in the emergency kit.
The applicable subheading for the emergency roadside kit will be 8544.42.9090, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Insulated (including enameled or anodized) wire, cable (including coaxial cable) and other insulated electric conductors, whether or not fitted with connectors…: Other electrical conductors, for a voltage not exceeding 1000V: Fitted with connectors: Other: Other.” The general rate of duty will be 2.6% ad valorem.
In your request, you state that the kit is assembled and packaged in Canada. The items involved are sourced from China with the exception of the jumper cables, which you state are manufactured in Canada. The manufacturing process for the jumper cables is described as aluminum wire strands of US or Canadian origin are drawn, twisted, and insulated in Canada where Chinese origin connectors are added to complete the cable assembly.
With regard to your request for the appropriate country of origin of the emergency kit, 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;
Since Canada is a NAFTA country, the NAFTA Marking Rules must be applied in determining the country of origin of the subject kits for marking purposes.
As an initial matter, we must address the origin of the jumper cables as you suggest these are products of Canada.
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.
Since the connectors used in the manufacture of the cable are foreign in origin, the origin of the jumper cable cannot be determined by application of 19 CFR 102.11(a)(1) or (2). Therefore, pursuant to 19 CFR 102.11(a)(3), the tariff shift rule set forth under 19 CFR 102.20 is considered. The rule for subheading 8544.42.9090, HTSUS, states:
A change to subheading 8544.11 through 8544.70 from any other subheading, including another subheading within that group, except when resulting from simple assembly.
With regard to the manufacturing of the jumper cable, the only foreign components incorporated are the connectors, which are imported from China. These would be classified under subheading 8536.90, HTSUS, and would appear to meet the rule listed above. However, simple assembly is defined under 19 CFR 102.1(o) as “the fitting together of five or fewer parts all of which are foreign by bolting, gluing, soldering, sewing or by other means without more than minor processing.” In our opinion, the addition of the Chinese origin connectors to form complete jumper cables would meet the definition of simple assembly. As such, the tariff shift rule is not met.
As the rules set forth in Section 102 must be addressed sequentially, Section 102.11(b) must then be examined. This section states:
(b) Except for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation 3, where the country of origin cannot be determined under paragraph (a) of this section:
(1) 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.
In order to determine essential character, we refer to 19 CFR 102.18. Particularly, we look to Section 102.18(b)(1)(i), which states:
(b) (1) 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. For purposes of this paragraph (b)(1):
(i) The materials to be considered must be classified in a tariff provision from which a change in tariff classification is not allowed under the specific rule or other requirements applicable to the good under consideration.
It is our opinion that, due to the fact that simple assembly occurs, neither the cable conductor nor the connectors make the change necessary within the tariff-specific rule. Accordingly, both can be considered when analyzing for essential character. In our view, the cable conductor of Canadian origin imparts the essential character. As such, it is the opinion of this office that the country of origin of the jumper cables is Canada.
In order to determine the origin of the finished emergency kit, we must again review Section 102 in sequential order. In applying the rules set forth under Section 102.11, we note that 102.11(a)(1) and (2) are also inapplicable in this case as the kit incorporates multiple goods of foreign origin. As this is the case, we must again examine the tariff specific rule specified under Section 102.11(a)(3) and detailed above.
We note that all foreign articles incorporated into the subject kit would make the necessary tariff shift. However, 19 CFR 102.17(c) states, in part, that a foreign material is not considered to have undergone a tariff shift by virtue of simple packing, repacking or retail packaging. In our view, the assembly of the emergency kit in Canada represents simple packaging for retail sale. As such, 19 CFR 102.11(a)(3) cannot be used in this case.
As referenced above, Section 102.11(b) does not cover those goods specifically described as a set within the nomenclature of the HTSUS or classified as a set pursuant to GRI 3. The subject kit is, in fact, considered a set per GRI 3, which excludes the use of this rule in determining the origin.
Consequently, Section 102.11(c) requires that “Where the country of origin cannot be determined under paragraph (a) or (b) of this section and the good is specifically described in the Harmonized System as a set or mixture, or classified as a set, mixture or composite good pursuant to General Rule of Interpretation 3, the country of origin of the good is the country or countries of origin of all the materials that merit equal consideration for determining the essential character of the good.”
As previously established, this office concluded that the essential character of the finished kit is that of the jumper cables. However, in reaching that decision, a thorough examination of all items with respect to essential character was performed. It is our opinion that the carrying case and registration card do not merit equal consideration. However, all other items, including the cables, tow strap, flashlight, battery, poncho, gloves, and first aid kit were equally considered for the essential character of the kit.
Based on the information presented with this issue, it is the opinion of this office that multiple items incorporated into the subject emergency kit merit consideration in determining the essential character. As these items originate from both Canada (jumper cables) and China (all other items), this office concludes that the country of origin of all of these parts must be reported individually. Pursuant to 19 CFR 102.11(c), the subject emergency kit is considered a product of Canada and China.
With regard to the application of Section 301 trade remedies, we note that goods originating from China under subheading 8544.42.9090, HTSUS, unless specifically excluded, are subject to the trade remedy under subheading 9903.88.03, HTSUS. As previously noted, the jumper cables impart the essential character of the finished set. As these items are not products of China, then Section 301 trade remedies would not apply.
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 Luke LePage at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division