CLA-2-90:OT:RR:NC:N3:135
Mr. Fred Powers
Commodore Printing Co.
258 E. Pomona Ave.
Monrovia, CA 91016
RE: The tariff classification, country of origin, and marking of hot tubs and swim spas from China
Dear Mr. Powers:
In your letter dated August 4, 2020, you requested a tariff classification, country of origin, and marking ruling. Additional information was provided via email dated August 7, 2020.
The products under consideration are hot tubs and swim spas. Both are freestanding tubs, imported in completely assembled form. Each hot tub consists of (1) a tub made of acrylic and fitted with a number of nozzles; (2) a hydromassage device comprising pumps, an air blower, jets and valves; (3) a control system; (4) a water heating system; (5) a filtration system; (6) a lighting system; and (7) other components. They measure 7-8 feet X 5 feet and weigh 600-800 pounds. The hot tubs are used for hydromassage. The swim spas are single units with rectangular-shaped tubs consisting of spa and “pool” portions, which are not separately sectioned. They measure 12 -19 feet X 8 feet, weigh approximately 3000 pounds by dry weight, and have almost the same components as the hot tub. The swim spas have current jets, which are designed to increase directional water flow for the consumer to swim against. The swim spas are designed for the consumer to enjoy the heat and hydromassage, and to replicate the experience of swimming. Both products are built to be stored and operated indoors and outdoors. The hot tubs and swim spas also come with two possible accessories: steps and vinyl covers. However, each spa cover and steps are packed separately from the hot tubs and swim spas in their own bags or containers. For the purposes of classification, a hot tub or swim spa with steps and a spa cover as imported will not meet the requirement of goods put up in sets for retail sale under General Rule of Interpretation 3(b). The spa covers and steps will be classified under different headings from the hot tubs and swim spas.
Since you did not indicate the hot tubs and swim spas have an AC adaptor, the applicable subheading for the hot tubs and swim spas will be 9019.10.2045, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “[m]echano-therapy appliances; massage apparatus …: [m]assage apparatus: [e]lectrically operated: [o]other: [other].” The general 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 https://hts.usitc.gov/current.
COUNTRY OF ORIGIN
The acrylic sheets and the control systems are made in the United States. The pumps, air blowers, jets, valves, filters, pillows, frames, ABS bases, skirts, UV systems, electric cables, water pipes, LED lights are products of China. The manufacturing process for the hot tubs and swim spas performed in China includes (1) a thermoforming process that creates the tub shell (around 2 hours); (2) a shell reinforcement process (around 36 hours); (3) manual cutting/polishing of the tub shell (around 2 hours); (4) assembly (around 5 hours), such as adding the plumbing and fittings, framing, and installing other components; (6) hydraulic/electric tests (around 36 hours); (7) cabinet assembly (around 1 hour); and (8) packing (around 1 hour). The completed hot tubs and swim spas are packaged in paper boxes.
"Country of origin" is defined in 19 CFR 134.1(b) as "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.”
A substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993). However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983).
In this case, the U.S. origin acrylic sheets are substantially transformed into the tub shells during the thermoforming process. After the process, the tub shells are considered products of China. In addition, most of the other components are made in China and substantial manufacturing operations are performed in China. After installation into the tubs, the U.S. origin control systems become an integral part of the hot tubs and swim spas. Therefore, the country of origin of the hot tubs and swim spas is China.
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.
The “ultimate purchaser” is defined in section 134.1(d) as the “last person in the U.S. to receive the article in the form in which it was imported.” If an imported article is to be sold at retail in its imported form, the purchaser at retail is the ultimate purchaser. In this case, the ultimate purchaser of the imported hot tubs and swim spas is the consumer who purchases the product at retail.
As provided in section 134.41(b), Customs and Border Protection (CBP) Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain.
With regard to the permanency of a marking, section 134.41(a), Customs Regulations (19 CFR 134.41(a)), provides that as a general rule marking requirements are best met by marking worked into the article at the time of manufacture. For example, it is suggested that the country of origin on metal articles be die sunk, molded in, or etched. However, section 134.44, Customs Regulations (19 CFR 134.44), generally provides that any marking that is sufficiently permanent so that it will remain on the article until it reaches the ultimate purchaser unless deliberately removed is acceptable.
Section 134.22, CBP regulations (19 CFR 134.22), provides general rules for marking of containers or holders. Section 134.22(a), CBP regulations (19 CFR 134.22(a)), states:
[w]hen an article is excepted from the marking requirements by subpart D of this part, the outermost container or holder in which the article ordinarily reaches the ultimate purchaser shall be marked to indicate the country of origin of the article whether or not the article is marked to indicate its country of origin.
Section 134.32 under subpart D of Part 134 provides general exceptions to marking requirements for articles meeting certain conditions set forth in the section. The pertinent condition to this case, Section 134.32(d), states “[a]rticles for which the marking of the containers will reasonably indicate the origin of the articles.”
None of the submitted files show that the products are marked with the country of origin. The submitted image is a picture of a paper label, which contains product information but no country of origin. The metal Spa ID plate screwed to the product also contains product information without the country of origin. Neither the paper label attached to the retail paper boxes nor the metal spa identity plate contains the country of origin. Please be advised that 19 CFR 134.41 requires that the marking of the country of origin be legible, indelible, and permanent. The country of origin marking should be adhered in a manner that will reasonably remain on the article until it reaches the ultimate purchaser. You have not provided evidence that the products will be marked in this manner. Accordingly, we find the hot tubs and swim spas are not legally marked with the country of origin. You may wish to discuss the matter of country of origin marking with an import specialist at the Pharmaceuticals, Health and Chemicals Center of Excellence and Expertise by e-email at [email protected] or by phone at (866) 295-7624 code 01.
If you seek a classification, country of origin, and marking ruling for the spa covers and steps, please submit another ruling request with the following information: (1) a description of each product including constituent materials and dimensions, (2) the components of each product with their countries of origin, (3) the manufacturing process and where it occurs, (4) a detailed description of how the articles and their containers will be marked, (5) images of retail containers or labels from multiple angles, and (6) a detailed description of how the goods will be used or sold upon importation.
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 Fei Chen at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division