CLA-2-84:OT:RR:NC:N1:105
Cynthia Neal Calfee Harter & Griswold LLP 2800 First Financial Center 255 East Fifth Street Cincinnati, Ohio 45202-4728
RE: The tariff classification and country of origin of replacement water filters
Dear Ms. Neal:
In your letter dated November 20, 2023, on behalf of your client, Qingdao Ecopure Filter Co., Ltd., you requested a tariff classification and country of origin ruling. Descriptive literature was provided for our review.
The items under consideration are replacement water filters, listed under model numbers FMS-1 and FML-4. The lead-free replacement refrigerator filters are designed to reduce chlorine, contaminates, and odor for better tasting water. The filters are pressed into a designated slot of the water filtration system of a refrigerator, and purified water is then dispensed through the door of the refrigerator. The filters are to be replaced by a consumer approximately every six months and discarded. Both filters operate in a substantially similar way and are differentiated by the slight change in shape (the FMS-1 is shorter and wider than the FML-4) to meet the needs of the intended model refrigerator they are going into.
As you suggest in your letter, the applicable subheading for the FMS-1 and FML-4 replacement water filters will be 8421.21.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Centrifuges, including centrifugal dryers; filtering or purifying machinery and apparatus, for liquids or gases; parts thereof: Filtering or purifying machinery and apparatus for liquids: For filtering or purifying water.” The general rate of duty is 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 at https://hts.usitc.gov/current.
Regarding the country of origin of the water filters. The filters are assembled in China using components manufactured in South Korea and China. The filter element is composed of a Chinese O-ring, upper cover, middle cover, bottom cover, sump, transparent protective film, and a South Korean carbon block. The carbon block removes contaminants from water through a process called “adsorption.” Adsorption is a process in which contaminants are attracted to the surface of the carbon granules and become trapped in the small pores of the filtration media. The carbon block requires substantial processing to create and accounts for the most substantial cost of the overall filters.
The entire production and packaging process includes eleven steps and is completed by fourteen workers. The filter element assembly consists of five steps and is completed by six workers. The process of production for part numbers FMS-1 and FML-4 is the same except for the difference in the ferrule part (the FML-4 needs a sealing ring on the middle cover and the upper cover respectively, the FMS-1 only has two sealing rings on the upper cover).
The first step in the filter assembly process involves one worker manually inserting the O-ring into the middle cover/top cover. During the process, visual inspection is conducted to ensure there are no scratches, stains, or color differences. The next step involves one worker operating glue dispensing equipment to glue the middle cover, carbon rod, and bottom cover together. During the process, the carbon block is pressed vertically without damage and evenly bonded. The third step involves one worker operating a rotary welding machine to weld and bond the upper cover, glue-dipping carbon rod, and sump to form a complete filter element. After the welding is completed, a self-inspection is performed to check that the product is free from stains, overflowing glue, cracking, etc. This is followed by an air tightness test, labeling, and final packaging.
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 courts have held that 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); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982).
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). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987).
In regard to the country of origin of the replacement water filters, it is our opinion that the assembly process performed in China is not considered complex and does not constitute a substantial transformation. The process predominantly involves gluing, welding, and pressing various components into place. The combining of these parts in China does not create a new and different article of commerce with a name, character, and use distinct from the individual components. Therefore, to determine the country of origin of the replacement water filters, we rely on the origin of the carbon block, which is the essential component of the replacement water filters. It is the carbon block from South Korea which requires considerable technical experience and customized equipment to produce. It is also the most expensive portion of the filters and is the item performing the filtering of the water. Accordingly, for origin and marking purposes, the country of origin of the FMS-1 and FML-4 replacement water filters will be South Korea, which is where the carbon block is manufactured.
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 of 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 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 and Border Protection 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, please contact National Import Specialist Jason Christie at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division