CLA-2 OT: RR: NC: N4:410
Sandler, Travis & Rosenberg
100 Trade Center Suite G-100
Woburn, MA 01801
RE: The country of origin and section 301 trade remedy of the Robotic Vacuum Cleaner
Dear Ms. Connelly:
In your letter dated July 5, 2019, on behalf of your client iRobot, Corp., you requested a country of origin determination for purposes of Section 301 duties for the Roomba "670 Series Robotic Vacuum Cleaner."
The subject merchandise is a Roomba "670 Series Robotic Vacuum Cleaner." The Roomba is a Wi-Fi connected vacuum robot used to clean floors. It features a 3-stage cleaning system allowing it to loosen, lift and suction dirt, dust and hair from hard floors and carpet. The set includes the Roomba vacuum robot, a rechargeable battery, a docking station for recharging and a power cord. The Roomba may also include an optional accessory known as a "virtua Wall" which contains the robotic within a certain space. The Roomba will be imported from Malaysia, packaged for retail sale.
The applicable subheading for the Roomba "670 Series Robotic Vacuum Cleaner" will be 8508.11.0000, which provides for Vacuum cleaners; parts thereof: With self-contained electric motor: Of a power not exceeding 1,500 W and having a dust bag or other receptacle capacity not exceeding 20 l. 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 on the World Wide Web at http://www.usitc.gov/tata/hts/.
You requested a determination of whether the merchandise is covered by additional ad valorem duties on certain Chinese imports that the United States Trade Representative ("USTR") has imposed pursuant to its authority under Section 301(b) of the Trade Act of 1974 ("Section 301 measures"). As of the date of this ruling, USTR has published three lists of Chinese origin products covered by the Section 301 measures.
Effective July 6, 2018, the Office of the United States Trade Representative (USTR) imposed an additional tariff on certain products of China classified in the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(b), HTSUS. The USTR imposed additional tariffs, effective August 23, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(d), HTSUS. Subsequently, the USTR imposed further tariffs, effective September 24, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(f) and U.S. Note 20(g), HTSUS. For additional information, please see the relevant Federal Register notices dated June 20, 2018 (83 F.R. 28710), August 16, 2018 (83 F.R. 40823), and September 21, 2018 (83 F.R. 47974). See also "Notice of Action and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation" (June 20, 2018, 83 F.R. 28710). Products of China that are provided for in subheading 9903.88.01, 9903.88.02, 9903.88.03, or 9903.88.04 and classified in one of the subheadings enumerated in U.S. Note 20(b), U.S. Note 20(d), U.S. Note 20(f) or U.S. Note 20(g) to subchapter III shall continue to be subject to antidumping, countervailing, or other duties, fees and charges that apply to such products, as well as to those imposed by the aforementioned Chapter 99 subheadings.
Products of China classified under subheading 8508.11.00, HTSUS, unless specifically excluded, are subject to the 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 8508.11.00, HTSUS, listed above.
The tariff is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Notice cited above and the applicable Chapter 99 subheading.
In your letter, you state that the Roomba vacuum robot consists of approximately one thousand components, many of which are first fabricated into module subassemblies manufactured in Malaysia. These modules will then be further fabricated into the Roomba chassis and connected to and programmed with the Main Printed Circuit Board which contains all the required operational software, resulting in the finished Roomba. The manufacturing process will include the production of four separate key module subassemblies in Malaysia. Each of these modules is a significant component of the finished Roomba. The modules will consist of components of several origins, with the majority being Malaysia content. Three of the modules will be manufactured in China and shipped to Malaysia.
You describe the manufacturing process with pictures and slides as the follows.
Main Printed Circuit Board
The main components include the Microcontroller, Power Supply, Motor Driver, Wi-Fi Antenna Module, Binocular Sensor, and supporting peripheral components. The bare board and all electrical components will be imported into Malaysia where the electrical components will be soldered onto the bare board. Six hundred electronic components are soldered onto the bare board. This process also includes extensive software programming and extensive testing done by experienced engineers.
These Modules are located on opposite sides of the chassis and consist of Chinese origin Gear Motor Assembly and Malaysian origin Plastic Housing, Wiring harness and Wheels. This Module will be fabricated, which includes eight different steps and undergo extensive testing in Malaysia to ensure that the Module functions properly and communicates with the sensors and Main Printed Circuit Board.
Cliff Harness Module
The Module consists of the Wire Harness, Cliff Sensors, and Bumper Switches. The fabrication process is as follows: the wire is assembled and soldered onto the printed circuit board hole. The bumper switches are connected to this assembly. The cliff sensors are connected to the optics and assembled onto the plastic housings. The completed module then undergoes testing to ensure that it functions properly, which includes a cliff sensor and bumper switch test, debugging and pre-calibration test.
Bin Assembly consists of the Housing and Impeller/Fan of Malaysian origin and Filter and Motor of Chinese origin. The assembly process is described as the follows: The Bin Contact chip is attached to the motor bottom cover. The motor and screw are assembled onto the bin. The bin fan is assembled onto the motor bottom cover. The cable is then soldered to the motor. The fan balance test is conducted, and the fan top cover is assembled onto the unit. The motor module is the assembled with screw and gear. The top and bottoms are attached to the unit. The blue filter screen is attached to the unit and the bin door is then assembled. Testing of the unit will be performed which includes the impeller rotation direction and airflow testing and the debugging. If the test results are acceptable, then the unit will move onto further production.
In addition to the above-mentioned four modules manufactured in Malaysia, all plastics used in the chassis and modules will be manufactured in Malaysia. It is stated that the plastic chassis is a significant component of the Roomba as it provides support, structure and protection for all the intricate components within the unit.
There are three additional modules included which are of Chinese origin assembled in the Roomba. They include the following:
Cleaning Head Assembly
The Cleaning Head Assembly serves as the vehicle to pick up and transfer debris from the floor to the Bin. It also provides a secure place for the brushes to spin and collect the debris consistently and effectively. Consumers can access the brushes after a completed run by pulling two attached yellow tabs.
Light Touch Sensor-Assembly
The Light Touch Sensor Assembly guides the Roomba as it gently bumps into objects and communicates to the Roomba whether there is any obstruction in the surrounding area. It also communicates the next direction for the Roomba.
The Side Brush Assembly
The Side Brush Assembly serves as an additional method of capturing large debris and sweeps it towards the Cleaning Head to be deposited. It allows for cleaning in corners that the Cleaning Head may not be able to reach. The assembly includes a motor which allows the brush to rotate and help capture additional debris.
The Roomba set includes the following accessories of Chinese origin:
Battery - The 1800 lithium-ion battery acts as the power source for the Roomba. It is charged within the Roomba via two contact charging points that connect to the Dock. It connects to the PCBA board and sits in the Chassis. The battery is replaceable as needed.
Dock - The Dock uses a wall adapter to charge the battery via two charging contacts that connect with the Roomba. The Dock includes a line cord that plugs into the side with the adapter.
Virtual Wall - This is an optional feature and not included in all models. Virtual Walls create an invisible boundary to enclose the robot in a certain space.
In your letter, you suggest that the country of origin of the Roomba's four key modules and the unit's final assembly is Malaysia. The key modules either assembled or substantially transformed in the Malaysian factory include Main Printed Circuit Board, Wheel Modules, Cliff Harness Module and Bin Module. We agree. These modules are fabricated into the chassis housing to create the complete Roomba vacuum cleaner. The chassis houses and protects all components of the Roomba vacuum cleaner. All the plastic outer housing for the chassis are produced in Malaysia. It is stated that the manufacturing process requires highly skilled technicians and workers and in addition to the engineering team. The engineer roles include Quality Engineer, Test Engineer, Mechanical Engineer and Industrial Engineer. The process also undergoes extensive inspection and testing at the Module level and upon completion of the robot.
Section 134.1(b), Customs Regulations (19 C.F.R. 134.1(b)), defines "country of origin" 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".
Based on the information submitted, the materials/components and subassemblies imported into Malaysia from China where they are manufactured into different subassemblies, which are ultimately assembled into the subject Roomba.
It is of the opinion of this office that the processing performed in Malaysia with respect to Roomba constitutes a substantial transformation of the imported materials/components into "products of" Malaysia. The manufacturing process in Malaysia transforms the Chinese originating components/materials to produce the finished product. It creates a new and different article of commerce with a distinct character and use that is not inherent in the components imported into Malaysia. Therefore, the "product of" requirement has been satisfied. For tariff purposes, we conclude that the country of origin for the Roomba and accessories when imported together will be Malaysia.
You also state that the Roomba vacuum robot packaged with the Chinese origin accessories of the rechargeable battery, dock station, power card and option virtual wall is a set put up for retail sale. We also agree.
The Roomba "670 Series Robotic Vacuum Cleaner" meets the definition of "goods put up in sets for retail sale." As per General Rule of Interpretation (GRI) 3(b), classification is determined by the component, or components taken together, which confer on the set as a whole its essential character. The Roomba vacuum robot clearly provides the essential character of this kit.
Guidance in a situation where sets packaged for retail sale are involved is provided on the CBP website in "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.
Following this guidance, the sets of a Roomba vacuum robot packaged together with the a rechargeable battery, a docking station for recharging and a power cord, will not be subject to the Section 301 remedy as the HTSUS provision under which the entire set is classified is not covered by the Section 301 remedies.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 CFR Part 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 Michael Chen at firstname.lastname@example.org.
Steven A. Mack
National Commodity Specialist Division