OT:RR:NC:N2:220
David Loretto
Cascadia 4x4 Ltd.
3750 West 49th Ave
Vancouver V6N 3T8
Canada
RE: The country of origin of a photovoltaic generator
Dear Mr. Loretto:
In your letter dated April 16, 2021 you requested a country of origin ruling.
The merchandise under consideration is referred to as the Vehicle Specific Solar System (VSS), which consists of a photovoltaic panel, a charge controller, a protective vinyl sheet, and an installation kit. The VSS is intended for use with motor vehicles, where the protective vinyl film is applied to the exterior of the vehicle, such as the roof or hood. The photovoltaic panel is then applied to the vinyl film and the charge controller is mounted between the battery and the panel. The function of the VSS is to generate and supply electricity directly to the vehicle battery.
In your letter, you provide multiple model numbers where, depending on the specific model number and type of vehicle it will be mounted to, the output of the VSS would range from 30 Watts to 100 Watts. As part of your request, you suggest the VSS is classifiable under subheading 8501.31.8010, Harmonized Tariff Schedule of the United States. We agree.
With regard to the origin of the VSS, you state that the photovoltaic panel, the charge controller, an MC4 connector, and a vinyl squeegee (for installation) are imported into Canada from China, while the vinyl sheet and the remainder of the installation kit are sourced from the United States. At your facility in Canada, the panels are electrically tested and processed by sanding, applying adhesives, attaching the MC4 connectors, and then boxed for shipping. The charge controller is tested and processed by cleaning, sanding, and attaching the MC4 connectors, then it is programmed and packed for shipping. The protective vinyl sheet is cut to certain specifications, depending on the model number and shape of panel, and then it is packed for shipping. The installation kit is packed with the squeegee, preparation chemicals, plastic ties and mounts.
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 United States 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 United States the English name of the country of origin of the article.
The “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.”
The United States Trade Representative has determined that an additional ad valorem duty of 25% will be imposed on certain Chinese imports pursuant to its authority under Section 301(b) of the Trade Act of 1974 (Section 301 measures). When determining the country of origin for purposes of applying current trade remedies under Section 301, the substantial transformation analysis is applicable. The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character, or use, different from that possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 69 C.C.P.A. 151 (1982). 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.
To allow for a more seamless transition period, at this time, CBP continues to utilize the marking rules set forth in 19 C.F.R. Part 102, with the exception of 19 C.F.R. § 102.19, for purposes of country of origin marking with respect to goods from Canada and Mexico. Section 102.11 provides a required hierarchy for determining the country of origin of a good for marking purposes, with the exception of textile goods which are subject to the provisions of 19 C.F.R. § 102.21. 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:
(1) The good is wholly obtained or produced;
(2) The good is produced exclusively from domestic materials; or
(3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in § 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 VSS is neither wholly obtained or produced or 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 section 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 tariff shift requirement in section 102.20 for the VSS of heading 8501, HTSUS, is:
A change to heading 8501 from any other heading.
The foreign material in this case consists of all of the materials, except for a Canadian instruction manual and shipping box. As the none of the components that make up the VSS are classified under heading 8501, HTSUS, the tariff shift requirement of section 102.11(a)(3) is met. As such, we find that the VSS is a product of Canada for country of origin marking purposes upon importation into the United States.
Regarding the applicability of Section 301 measures, in our opinion, the work performed in Canada consisting of sanding, gluing, testing, and packing, does not substantially transform the photovoltaic panel or the charge controller into new and different articles of commerce with a name, character, and use distinct from the articles exported from China. As such, the Vehicle Specific Solar System is subject to the additional duties under Section 301 of the Trade Act of 1974, as amended, upon importation into the United States.
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