OT:RR:NC:N2:220
Molly Yang
BenQ Corporation
No.16 Jihu Road NeiHu, Taipei
Taiwan
RE: The country of origin, marking, and applicability of Section 301 remedies of a wireless mouse set
Dear Ms. Yang:
In your letter dated November 16, 2023, you requested a country of origin and marking on behalf of BenQ America Corporation.
The merchandise under consideration is referred to as the wireless mouse (Mouse), which is described as a plastic body shell with actuating buttons and scroll wheel on the top, and two additional button switches on the side. Internally, the Mouse incorporates a printed circuit board assembly (PCBA) which functions to communicate with attached Bluetooth adapters and provides for the functionality of the input operations to the connected personal computer. The Mouse is said to be retail packaged with wireless receivers, USB adapters, Skatez, and a USB cable.
In your request, you state that the PCBA is manufactured in Taiwan by surface mount and through hole insertion of electronic components, and then is sent to China where it will be incorporated into Chinese origin plastic body parts. The Mouse is subsequently tested packaged in a retail box with its accessories, namely the Chinese origin receivers, adapters, Skatez, and cable, for export to the United States.
General Rule of Interpretation (GRI) 1, Harmonized Tariff Schedule of the United States (HTSUS), states in part that for legal purposes, classification shall be determined according to the terms of the headings, any relative section or chapter notes and, unless otherwise required, according to the remaining GRI’s taken in order. Goods that are, prima facie, classifiable under two or more headings, are classifiable in accordance with GRI 3.
GRI 3(a) states that the heading that provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings refer to only part of the items in a composite good or set, those headings are to be regarded as equally specific in relation to the goods, even if one of them gives a more complete or precise description of the good. As such, they are regarded as equally specific and classification of the composite good or set is to be determined by GRI 3(b) of GRI 3 (c) taken in the appropriate order in which they are set out in GRI 3. GRI 3(b) states in part that composite goods or sets, which cannot be classified by reference to GRI 3(a), are to be classified as if they consisted of the component that gives them their essential character.
The Explanatory Notes to the Harmonized Tariff System, although not legally binding, provide guidance in the interpretation of the Harmonized Commodity Description and Coding System at the international level. Explanatory Note X to GRI 3(b) provides that the term “goods put up for retail sale” means goods that: (a) consist at least two different articles which are, prima facie, classifiable in different headings; (b) consist of articles put up together to meet a particular need or carry out a specific activity; and (c) are put up in a manner suitable for sale directly to users without re-packing. Goods classifiable under GRI 3(b) are classifiable as if they consisted of the material or component which gives them their essential character, which may be determined by the nature of the material or component, its bulk, quantity, weight, or value, or by the role of a constituent material in relation to the use of the article.
The subject wireless mouse set consists of two or more articles that are, prima facie, classifiable in different headings. This set also consists of articles put up together to carry out a specific activity (i.e., inputting, manipulating data into an automatic data processing system). Finally, the articles are put up in a manner suitable for sale directly to users without repacking. Therefore, the subject wireless mouse set is described within the meaning of “goods put up for retail sale.”
In accordance with GRI 3(b), which states in part that goods put up in sets for retail sale, that cannot be classified by reference to GRI 3(a), are to be classified as if they consisted of the component which gives them their essential character. In our opinion, the article that provides the essence of the wireless mouse set is the Mouse.
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 “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 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). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993).
Regarding the country of origin of the Mouse, in our view, the assembly of the PCBA in Taiwan by soldering the individual components onto the bare board results in a substantial transformation of those components to produce a PCBA of Taiwanese origin. Furthermore, it is the opinion of this office that the PCBA establishes the functionality of the Mouse because it is the article within the assembly that detects the movement via the optical sensors, performs the scrolling functions, wirelessly transmits the data to the attached personal computer, and more. Moreover, it is the view of this office that the assembly operations performed in China are not complex and do not substantially transform the PCBA by combining with the wheel, the plastic housings, etc. As such, we find that the components that make up the Mouse set are not transformed in China into a new and different article of commerce with a distinct name, character, and use. Therefore, the Mouse is considered a product of Taiwan for origin and marking purposes at the time of importation into the United States.
In your request, you also inquire about the appropriate country of origin marking of the Mouse and its retail box and provide detailed drawings indicating the proposed marking schema. As provided in section 134.41(b), Customs 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. The marking must also be permanent, and 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.
The proposed markings indicates that the Mouse will be marked with a permanent label containing various device certifications and individual lines detailing the importer’s address for the United Kingdom, European Union, and United States. Dedicated in the same font size is a multi-origin statement indicating that the Mouse is “Made in XXX”, whereas indicated above we have determined to be Taiwan. As the label is permanently attached to the Mouse, and the country of origin marking is conspicuous to the ultimate consumer, it is our opinion that a purchaser of the Mouse would be adequately informed of the country of origin of the device and your proposed marking of the Mouse is sufficient.
Furthermore, you provided representative diagrams of the retail box markings, where similar certifications and product information are printed on the label as well as technical data for the Mouse. According to the diagram, a dedicated line in bold type indicates that the Mouse is “Made in XXX”, where we have determined is Taiwan.
However, the Chinese origin receivers, adapters, Skatez, and USB cable, are merely packaged with the Mouse in a retail carton. As such, we would note that Treasury Decision (T.D.) 91-7, published in Volume 25, Customs Bulletin and Decisions, at 6 (January 16, 1991), addressed, among other things, the application of country of origin marking requirements to sets. It states therein, at 16:
. . . in most cases, the mere inclusion of an item in a collection will not substantially transform it into an article with a new name, character or use and, therefore, each item must be separately marked with its own country of origin. (Where the marking of the container will reasonably indicate the country of origin to the ultimate purchaser, the container may be marked instead of the individual articles. See 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d)). This result is consistent with the purpose of the marking statute since the ultimate purchaser’s decision as to whether to buy the set might be influenced by the country of origin of any of the items in the set, whether or not an item gives the set its essential character.
In considering T.D. 91-7, we find that the Chinese origin accessories included in the retail carton are not substantially transformed as a result of packaging with the Taiwanese origin Mouse, and the origin of all items within the set must be identified. Consequently, each accessory included in the set, namely the receivers, the adapters, the Skatez, and the USB cable, must be identified on the packaging and state the origin of each of these items.
Regarding Section 301 remedies applicable to products of China, certain guidance pertaining to sets packaged for retail sale is provided on the CBP website under “CBP Section 301 Trade Remedies Frequently Asked Questions”. The answer to “How are the Section 301 duties assessed in respect to sets packaged for retail sale, which contain components covered by the Section 301 remedy,” reads, in pertinent part, as follows:
When importing goods put up in sets for retail sale (in accordance with General Rule of Interpretation 3) that contain articles subject to the Section 301 remedy, if the product that imparts the essential character to the set (i.e. the HTSUS provision under which the entire set is classified) is covered by the Section 301 remedy, then the entire set will be subject to the additional 25% duties.
If the HTSUS provision under which the entire set is classified is not covered by the Section 301 remedies, but the set contains components that are classified in a subheading covered by the 301 list, the 301 duties will not be assessed on the individual components.
It is the opinion of this office that the Taiwanese origin Mouse imparts the essential character of the set, and the retail packaged mouse set is not subject to the additional duties applicable to products of China under Section 301 of the Trade Act of 1974, as amended, upon importation into the United States.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at the time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
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