CLA-2-94:OT:RR:NC:N4:463
David M. Murphy
GDLSK LLP
599 Lexington Avenue, 36th floor
New York, NY 10022
RE: The tariff classification, country of origin and method of marking kitchen cabinets.
Dear Mr. Murphy:
In your letter dated August 5, 2020, you requested a tariff classification ruling on behalf of Prominent Target Sdn Bhd (“Prominent”). In lieu of samples, illustrative literature and product descriptions were provided.
Based on the information provided, follow-up conversations and email with GDLSK, Prominent will manufacture multiple lines of wooden kitchen cabinets in Malaysia for export to the United States. As U.S. Customs and Border Protection (CBP) cannot provide a classification and country of origin ruling on all of the articles in the submitted seven-page spreadsheet, GDLSK/Prominent has selected five representative kitchen cabinets for consideration.
ISSUE:
What is the classification and country of origin of the subject merchandise? Will marking the outer boxes with the country of origin of their contents be acceptable?
PRODUCT DESCRIPTION AND CLASSIFICATION:
Item 1, model W0930, is a kitchen wall cabinet measuring 9" (W) x 30" (H) x 12" (D), with a single door and two shelves.
Item 2, model 2DB27, is a kitchen base cabinet measuring 27" (W) x 34-1/2" (H) x 24" (D), with a single drawer atop a single door. Opening the door reveals one shelf.
Item 3, model U189624 is a tall kitchen cabinet measuring 18" (W) x 96" (H) x 24" (D), with two doors. Opening the shorter upper door reveals three shelves and opening the taller lower door reveals five shelves.
Item 4, model OC308424(2D), is a kitchen oven cabinet measuring 30" (W) x 84" (H) x 24" (D) with three full-width lower drawers, an oven cutout and two half-width upper doors.
Item 5, model TP159024, is a tall kitchen pantry measuring 15" (W) x 90" (H) x 24" (D), with two doors. Opening the shorter upper door reveals two shelves and opening the taller lower door reveals five shelves.
The aforementioned items will be exported as ready to assemble (RTA) cabinets and assembled cabinets. The RTA cabinet kits will consist of a door, a drawer front, a frame, knock down (KD)
cabinet components (consisting of left/right side panels, adjustable shelf(s), a back panel, a bottom panel, a top panel, a kick plate and drawer box panels) and fittings (metal hinges, an automatic door closer, and plastic fittings). The RTA cabinets will contain substantially all the components necessary to assemble a complete cabinet for installation in a kitchen.
The assembled cabinets consist of the same components as the RTA cabinet kits. However, all of the components will be assembled into finished cabinets.
The requester suggests that the RTA cabinets and assembled cabinets are specifically provided for under subheading 9403.40.9060, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Other furniture and parts thereof: Wooden furniture of a kind used in the kitchen: Other: Other: Cabinets designed for permanent installation.” See e.g., NY C84285, Feb. 17, 1998, NY 883040, March 10, 1993. We are in agreement with your classification. The duty rate will be free.
CABINET MATERIALS AND PRODUCTION:
The information provided indicate that the materials used to manufacture the RTA cabinets and assembled cabinets are as follows:
General plywood/birch-face plywood sourced in Malaysia;
High density fiber board (HDF)/medium density fiber board (MDF) sourced in Malaysia; and
Rough timber and sawn-on-four-sides (S4S) timber will be sourced from Malaysia, China, Russia, Europe, etc. Species include Birch & Beech from China, Russia, Europe, and Acacia and Eucalyptus from Malaysia.
The information states that the door and drawer fronts are typically comprised of five pieces and that their production entails 11 major steps, from cutting and sanding lumber through spray finishing, and that all of these steps are performed in Malaysia.
The information states that the cabinet frame (the front of the cabinet surrounding the door and drawer fronts) is typically comprised of five pieces (two side pieces, one top piece, one bottom piece and one middle piece), that its production entails 11 major steps (from cutting and sanding lumber through spray finishing) and that all of these steps are performed in Malaysia.
The information states that the cabinet body is typically comprised of seven pieces (two side panels, two top panels, one center panel, one kick plate and one bottom panel), except for cabinets with a drawer box (comprised of two side panels, one back panel and one bottom panel), that its production entails 11 major steps (from cutting and sanding lumber through cleaning and packing) and that all of these steps are performed in Malaysia.
The information states that, with respect to the RTA cabinets, the door, drawer front, frame, kick plate, knock down (KD) cabinet components (consisting of left/right side panels, adjustable shelf(s), back panel, bottom panel, top panel, drawer box panels) and fittings (metal hinges, automatic door closer, plastic) and assembly instructions are packaged either together or separately as RTA cabinet “kits” for shipment to the United States.
The information states that the assembled cabinets are fully assembled units composed of a door, a drawer front, a frame, a kick plate, knock down (KD) cabinet components (consisting of left/right side panels, adjustable shelf(s), a back panel, a bottom panel, a top panel and drawer box panels) and fittings (metal hinges, automatic door closer and plastic pieces). The information also states that cabinet assembly entails 10 major steps (from attaching the bottom panel to the back panel through packaging the assembled cabinet for shipment) and that all of these steps are performed in Malaysia.
In a telephonic conversation, a GDLSK attorney said that, although not listed in the production process, staining will be performed in Malaysia and all cabinetry fittings, to the extent possible, will be sourced in Malaysia.
SUBSTANTIAL TRANSFORMATION ANALYSIS:
Under the CBP laws, if the article consists of material produced, derived from, or processed in more than one country, it is considered a product of that country where it last
underwent a “substantial transformation.” According to U.S. courts, a substantial transformation
occurs when articles lose their identity as such and become new articles having a new “name,
character or use.”
In order to determine whether a substantial transformation has occurred, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis. CBP has stated that a new and different article of commerce is an article that has undergone a change in commercial designation or identity, fundamental character, or commercial use. A determinative issue is the extent of the operations performed and whether the materials lose their identity and become an integral part of the new article.
A: ORIGIN OF ASSEMBLED CABINETS:
The requester argues that in CBP Headquarters Ruling Letter (HQ) N087858, Jan. 8, 2010, CBP addressed the country of origin marking of kitchen and bath cabinetry assembled in the United States from Chinese produced components. The imported components consisted of: assembled stained and top-coated cabinet face frames; assembled stained and top-coated cabinet doors; stained and top-coated cabinet drawer fronts; stained and top-coated cabinet drawer components; stained and top-coated cabinet box components (backs, tops, bottoms, shelves, ends, stretcher rails, toe kicks, door hinges and decorative surface hardware (knobs and pulls). Relying on Carlson Furniture Industries v. United States, 65 Cust. CT 474 (1970), CBP concluded that “the assembling of the kitchen and bath cabinetry involves a significant amount of processing of the imported components (articles) and is more than mere assembly, resulting in a substantial transformation of those components into finished articles of commerce.”
The requester argues that the process described above is analogous to that performed in the production of the assembled cabinets. Moreover, the complex production of the cabinet components from rough sawn lumber and raw plywood is more complex than that discussed in HQ N087858. As a result, the origin of the assembled cabinets is Malaysia, where the cabinets were produced from raw materials into completed kitchen cabinets. We are in agreement with this analysis and thus the country of origin for the subject assembled cabinets is Malaysia.
B: ORIGIN OF RTA CABINETS:
The requester argues that CBP has consistently held that cutting materials to defined shapes or patterns suitable for use in making finished articles, as opposed to mere cutting to length and/or width which does not render the article suitable for a particular use, constitutes a substantial transformation. In N300248, Aug. 30, 2018, CBP addressed the origin of furniture parts. The parts were made from raw wood materials of United States origin, sent to China to be assembled into wooden panels, and then sent to Vietnam to be cut to size and shape for manufacture into furniture parts. CBP held that raw lumber processed in China into door panels resulted in a substantial transformation and the further processing in Vietnam (trimming into required lengths and widths, profiling, routing, beveling, notching and shaping into specific furniture parts) also constituted a substantial transformation. See also HQ 553878, Oct. 28, 1985, (foreign raw wood processed into cabinet doors, drawers, drawer fronts, moldings, kick plates and other parts are substantially transformed); HQ 557284, July 26, 1993, (“cutting and further processing, e.g., cutting into smaller pieces, routing, precision-hole drilling, etc., to create furniture parts suitable for assembly into a finished night stand table, constitute a single substantial transformation”); NY N228696, August 29, 2012, (production of headboards).
The requester argues that in the case of these RTA cabinets, the raw timber is processed (sanded on four sides (S4S)) and rough-cut to dimensional lumber in Malaysia. This dimensional lumber is then cut to length and width into dedicated cabinet components. Likewise, medium-density fiberboard (MDF)/high-density fiberboard (HDF) is cut to length and width into specific pieces for assembly. These materials are further processed into components which themselves are further processed into finished RTA cabinet pieces. The processing of rough sawn lumber and MDF/HDF into RTA cabinets pieces is a substantial transformation resulting in their being a product of Malaysia. We are in agreement with this analysis; the RTA cabinets should be marked as country of origin Malaysia.
METHOD OF MARKING:
The marking statute and regulations 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. See 19 C.F.R. § 134.11. As provided in 19 C.F.R. § 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.
The requester argues that for both the RTA Cabinets and Assembled Cabinets, the retail container will contain a statement “Made in Malaysia.” These products are sold to do-it-yourself (DIY) consumers or reseller/installers in the retail container. Because the cartons protect the merchandise until the point of sale and installation, the cabinets are not sold without their containers. As such, these individuals receive the goods in their condition as imported and are the ultimate purchasers under 19 C.F.R. §134.1(d). The retail containers will reach the ultimate purchaser and marking of the containers will reasonably indicate the origin of the articles; thus, we believe the individual articles are excepted from marking under 19 U.S.C. § 134.32(d). See also HQ 563278 (Aug. 4, 2005). We are in agreement with this analysis that, with respect to the subject merchandise, the marking of the containers will reasonably indicate the country of origin and that the individual articles are thus excepted from marking.
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 Seth Mazze at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division