CLA-2-84:OT:RR:NC:N1:102
Kyle McNulty
John C McNulty Customs Broker
249 East Ocean Blvd, Suite 801 Long Beach, CA 90802-4849
RE: The tariff classification of a hydronic air-to-water heat pump from China
Dear Mr. McNulty:
In your letter dated March 4, 2024, you requested a tariff classification ruling on behalf of your client Viessmann Manufacturing Company (U.S.) Inc. Descriptive information was provided with your submission.
The merchandise in question is referred to as an outdoor unit (ODU) for the Vitocal 100-AWAM2V, model numbers 020028, 0340043, and 051078. The three models, which are configured in the same manner refer to three different sizes and their respective capacities. The ODU, which is referred to as a hydronic air-to-water heat pump, consists of a chassis that primarily consists of a compressor, a heat exchange unit, etc. As indicated in the request, the ODU is a component intended to be used in the consumer boiler system (CBS) using medium hydronic lines. Once imported, the ODU is combined with an indoor unit in the United States and sold together as a finished product. The CBS is a system that heats domestic water and also heats and cools a building.
In your letter, you suggest the ODU is classifiable under subheading 8403.90.0000, Harmonized Tariff Schedule of the United States, (HTSUS), which provides for "Central heating boilers (other than those of heading 8402) and parts thereof: Parts." We disagree. The central heating boilers of heading 8403, HTSUS, are dedicated to heating water, which is subsequently circulated and used to heat a space within a building or home. The subject outdoor unit is not a component of a central heating boiler, but a component of an air-to-water heat pump system that is designed to both heat water and heat and cool a space. As such, the outdoor unit cannot be classified as a part of a central heating boiler.
Heading 8418 specifically provides for refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps, other than the air conditioning machines of heading 8415. Heat pumps described in the Explanatory Notes (ENs) to heading 8418, the official interpretation of the Harmonized System at the international level, are usually designated by the association of two factors, the first being the initial source of the heat and the second the medium whose temperature is to be modified. Among the principal types of apparatus are:
(i) Air/water or air/air heat pumps, which draw ambient heat from the atmosphere and restore it in the form of warm water or warm air;
(ii) Water/water or water/air heat pumps, which obtain heat from an underground source or from a mass of surface water;
(iii) Earth/water or earth/air heat pumps: in these, heat is obtained by means of a system of tubes buried in the earth.
In relevance, the ENs to heading 8418 go on to say that certain heat pumps may be presented without an evaporator when they are intended for installation in a plant already containing one. They are, in such cases, to be considered as incomplete articles having the essential character of the complete articles and remain classified here. Heat pumps are used essentially to heat buildings or provide domestic hot water. However, the heading excludes reversible heat pumps comprising a motor driven fan and elements for changing both the temperature and the humidity. In the case of the Vitocal 100-AW AM2V heat pump, you explain that the unit changes the temperature of fluid. Ambient conditions, such as dehumidification, are changed by components external to the unit.
In accordance with Note 2 (a) to Section XVI, the applicable subheading for the hydronic air-to-water heat pump will be 8418.61.0100 (HTSUS), which provides for Refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps, other than the air conditioning machines of heading 8415; parts thereof: Heat pumps other than air conditioning machines of heading 8415. The 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 at https://hts.usitc.gov/.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8418.61.0100, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 8418.61.0100, HTSUS, listed above. The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively.
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 Sandra Martinez at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division