Senior Counsel, Trade Compliance
441 9th Ave. 2nd Floor
New York, NY 10001
RE: The classification, country of origin and marking of a signaling device
Dear Ms. Riley:
In your letter, which was received by this office on June 28, 2022, you requested a classification, country of origin and marking ruling.
The item concerned is referred to as the Glow (model # GL0W) . The Glow is an electronic device for use within a vehicle. Glow is marketed as a tool for riders and drivers to identify a vehicle as a Lyft ride. It is a light-up panel that attaches to a vehicle's dashboard to help riders recognize the car as their Lyft driver.
The Glow device is housed in a plastic enclosure that measures 6 inches in width, 2.5 inches in height, and 1.25 inches in depth. It incorporates electrical and mechanical components including LEDs, a Bluetooth Low Energy (BLE) system on a chip (SoC), global navigation satellite system (GNSS), antennas, accelerometer, ambient light sensor, a heatsink, and a temperature sensor. The electrical components are populated onto a printed circuit board assembly (PCBA) and custom firmware is flashed onto the PCBA to both integrate individual components and provide the logic necessary to deliver on the intended use. The device is mounted on a vehicle's dashboard with magnetic attachments.
In use, the Glow device sends location data to the Lyft remote cloud-based server. The Lyft server then forwards that information to the passenger via their cell phone along with information informing the user/passenger what color the GLOW device will be using to indicate its presence. The GLOW device uses its color LED panel to indicate its presence to the user, it is a way of differentiating the proper Lyft vehicle from the incorrect vehicle.
Country of Origin:
The Glow device comprises 81 unique parts sourced from multiple countries including China, Taiwan, Japan, Thailand, Malta, and Philippines.
All the GLOW's printed circuit board assemblies (PCBA) undergo fabrication in China. The PCBAs are produced in a process involving the fabrication of a printed circuit board (PCB) substrate. That PCB substrate is then populated with various electrical elements using a surface mount technology (SMT), a through-hole placement and wave soldering processes. Then the PCBA is flashed with Lyft's custom firmware. The PCBAs perform all essential functions of the device.
Production of mechanical components also takes place in China. These components range from off-the-shelf fasteners, custom plastic parts, and internal components that provide structural and functional assistance.
The final Glow assembly also takes place in China and involves incorporating the PCBAs into the housing with the rest of Glow components.
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."
For tariff purposes, 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).
Based upon the facts presented, it is the opinion of this office that the manufacturing process that takes place within China to create the PCBAs (the dominant components) is substantial and complex. The various non-Chinese components/elements that are sourced from various other countries (i.e. Taiwan, Japan, Thailand, Malta, and Philippines) are transformed within China into a different article with a new name, character, and use. They lose their separate identities and become an integral part of a new article as a result of the manufacturing process. Additionally, the housing and other non-electrical structural components are manufactured within China, and the final assembly process is conducted within China. Accordingly, the country of origin of the Glow (model # GL0W) for country of origin marking purposes would be China at the time of importation into the United States. The Glow device should be legibly, conspicuously and permanently marked in accordance with the requirements of 19 U.S.C. 1304 to indicate that its country of origin is China.
Classification under the HTSUS is in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods will be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. If goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 will be applied in order.
Note 3 to Section XVI states: "Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function."
The Explanatory Notes for Section XVI indicates, "Where it is not possible to determine the principal function, and where, as provided in Note 3 to the Section, the context does not otherwise require, it is necessary to apply General Interpretative Rule 3 (c)."
GRI 3(c) provides that when goods cannot be classified by reference to GRI 3(a) or 3(b), they are to be classified in the heading that occurs last in numerical order among the competing headings that equally merit consideration.
You have proposed classification of the Glow (model # GL0W), within heading 8517, Harmonized Tariff schedule of the United States (HTSUS). Heading 8517, HTSUS, provides for merchandise that has the specific function of transmitting and receiving data. The Glow device is used to track the location of a Lyft vehicle and issue a visual signal to a waiting passenger. The Glow device uses wireless connectivity to send and receive that location and signal information. It is the opinion of this office that the wireless capability is not the principal function of this device. The tracking and visual signaling functions are as important to the overall function. It is CBP's opinion that there is no principal function. Therefore, we are directed to GRI 3(c) to determine the heading that occurs last in numerical order among the competing headings that equally merit consideration. The competing headings are 8517, HTSUS, 8526, HTSUS, and 8531, HTSUS. Consequently, your suggested classification within heading 8517, HTSUS, would be inapplicable since it does not occur last in numerical order among the competing headings.
Additionally, you also discuss/suggest classification of the GLOW within heading 8512, HTSUS, as "...signaling equipment...of a kind used for cycles or motor vehicles". This office disagrees.
As previously cited, GRI 1 states " ... classification shall be determined according to the terms of the headings ... ." Heading 8512, HTSUS, does provide for signaling devices but, the Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and the GRIs.
The ENs to 85.12 state, "This heading covers electrical apparatus and appliances specialized for use on cycles or motor vehicles for lighting or signaling purposes....Other electrical visual signaling apparatus, e.g., illuminated triangles for vehicles with trailers , illuminated indicators (of the revolving dome type or the "lightbar" type) for taxis, police vehicles, fire engines, etc."
The Glow is not akin to the various signaling devices provided for in EN 85.12. It is the opinion of this office that classification of the Glow in heading 8512, HTSUS, is precluded.
The three main functions of this product are to gather location/tracking data (heading 8526, HTSUS), transmission and reception of data to the Lyft Network (heading 8517, HTSUS), and to provide a visual signal to the Lyft passenger (heading 8531, HTSUS). All three functions merit equal consideration. As Heading 8531, HTSUS, occurs last in numerical order the Glow device will be classified accordingly.
The applicable subheading for the Glow (model # GL0W), will be 8531.20.0040, HTSUS, which provides for "Electric sound or visual signaling apparatus...: Indicator panels incorporating liquid crystal devices (LCD's) or light emitting diodes (LED: Other". The general rate of duty will be Free.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8531.20.0040, 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 8531.20.0040, 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.
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 https://hts.usitc.gov/current.
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 Steven Pollichino at steven.pollichin[email protected]
Steven A. Mack
National Commodity Specialist Division