MAR-2 RR:NC:1:102
Mr. Benjamin Otte
Intirion Corporation
10 Walpole Park South
Walpole, MA 02081
RE: THE COUNTRY OF ORIGIN MARKING OF A COOK AND COOL COMBINATION APPLIANCE; ARTICLE 509
Dear Mr. Otte:
This is in response to your letter dated February 21, 2007 requesting a ruling on the country of origin marking for an imported cook and cool combination appliance.
The subject merchandise is described as a “MicroFridge Combination Appliance”, which is comprised of a microwave oven mounted onto a refrigerator. The microwave is manufactured in either China or Thailand and the refrigerator is manufactured in Mexico. Once the microwave and the refrigerator enter the United States, the combination appliance is assembled by mounting the microwave onto the refrigerator using a bracket manufactured in the United States.
The information you provided indicates that the combination comes in several different models. The dimensions of the refrigerators vary between models and some of the refrigerators have a single door, while others have separate doors for the freezer and refrigerator. You are requesting that Customs and Border Protection (CBP) determine if sufficient assembly/testing transformation takes place on the subject merchandise at a San Diego, California facility for country of origin of the combination appliance to be considered the United States.
Section 304 of the Tariff Act of 1930, as amended, (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article.
Part 134, CBP Regulations (19 CFR 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. §1304. Section 134.1(b) of the CBP Regulations (19 CFR 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’ within the meaning [of the marking laws and regulations]. Section 134.1(j), CBP Regulations (19 CFR 134.1(j)), provides the "NAFTA (North American Free Trade Agreement) Marking Rules" are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g), CBP Regulations (19 CFR 134.1(g)), defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico, or the United States as determined under the NAFTA Marking Rules, set forth in Part 102, CBP Regulations (19 CFR Part 102). In this instance, the NAFTA Marking Rules are applicable because your inquiry involves a refrigerator manufactured in Mexico which undergoes assembly in the United States.
The country of origin marking requirements for a "good of a NAFTA country" are determined in accordance with Annex 311 of the North American Free Trade Agreement. The rules used for determining the country of origin of a good imported from a NAFTA country are set forth in Part 102, CBP Regulations (19 CFR 102). Section 102.11(a), CBP Regulations (19 CFR 102.11(a)) provides that the country of origin of a good is the country in which:
The good is wholly obtained or produced; the good is produced exclusively from domestic materials; or each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
Section 102.1(g), CBP Regulations (19 CFR 102.1(g)), defines a good wholly obtained or produced. Specifically, Section 102.1(g)(10), CBP Regulations (19 CFR 102.1(g)(10)), states a good wholly obtained or produced is "A good produced in that country exclusively from goods referred to in paragraphs (g)(1) through (g)(10) of this section or from their derivatives, at any stage of production." The Combination appliance would not qualify as "a good wholly obtained or produced" in a NAFTA country because the refrigerator is manufactured in Mexico, the microwave is made in China, and the articles are mounted together in the United States. As such, the country of origin of subject merchandise cannot be determined under section 102.11(a)(1).
Section 102.11(a)(2), CBP Regulations, (19 CFR 102.11 (a)(2)) provides that the origin of a good may be based on the origin of the materials used to produce the good, provided the good is produced exclusively from domestic materials. Section 102.1(d), CBP Regulations (19 CFR 102.1(d)), defines domestic material as "a material whose country of origin as determined under these rules is the same country as the country in which the good is produced." The combination appliance is not produced exclusively from domestic materials because the microwave is made in China and the refrigerator is made in Mexico. Accordingly, the country of origin cannot be determined under section 102.11(a)(2).
Pursuant to section 102.11(a)(3), CBP Regulations, (19 CFR 102.11(a)(3)) the country of origin of a good is the country in which each "foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20". "Foreign material" is defined in section 102.1(e), CBP Regulations (19 CFR 102.1(e)), as "a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced." Section 102.20 sets forth the specific tariff classification changes under the Harmonized Tariff Schedule of the United States (HTSUS), and/or other operations, that are required in order for the country of origin to be determined on the basis of operations performed on the foreign materials contained in a good.
In order to assess whether a foreign material has undergone the applicable tariff change, classification of the finished good, the assembled combination appliance, and the foreign materials, the refrigerator and the microwave, must first be established. This office has determined that the microwave oven is classified in subheading 8516.50.00, HTSUS, which provides for microwave ovens as other electrothermic appliances of a kind used for domestic purposes.
The refrigerators are classified in heading 8418, HTSUS, but are classified in different subheadings depending on the model. The refrigerator models with two doors are classifiable in subheading 8418.10.00, HTSUS, which provides for combined refrigerator-freezers, fitted with separate external doors. The refrigerator models with one door are classified in subheading 8418.21.00, HTSUS, which provides for household type refrigerators.
By application of Section XVI, Note 3, the combination appliance is a composite machine classified by its principal function, which we find is the function of the refrigerator. As such, the completed combination appliance is classified in heading 8418, HTSUS, as a refrigerator. Specifically, the combination appliance is classified in subheading 8418.21.00, HTSUS, or 8418.10.00, HTSUS, depending on whether the model has a separate door for the freezer.
Since the assembled Combination appliance is classified in either subheading 8418.10.00, HTSUS, or subheading 8418.21.00, HTSUS, the applicable tariff shift rule is found in section 102.20(o), CBP Regulations (19 CFR 102.20(o)). The rule requires a change to subheading 8418.10 through 8418.91 from any other subheading, including another subheading within that group. In other words, the microwave and the refrigerator prior to assembly in the combination appliance must be classifiable in any other subheading besides the subheading in which the finished combination appliance is classified in.
In this case, the foreign materials used to assemble the combination appliance do not undergo the applicable tariff shift. The microwave does undergo the applicable tariff shift because it shifts from heading 8516, HTSUS, to heading 8418, HTSUS. However, the refrigerator does not undergo the applicable tariff shift because the refrigerator and the finished combination appliance are classified in the same subheading. As a result, each foreign material incorporated in the combination appliance does not undergo the applicable tariff shift as set forth in Section 102.20 (o). Thus, the country of origin of the good may not be determined in accordance with this provision.
Given that the country of origin cannot be determined by section 102.11(a) of the CBP Regulations, the next step in the country of origin regulations hierarchy is section 102.11(b), CBP Regulations (19 CFR 102.11(b)), which provides in pertinent part that except for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation 3, where the country of origin cannot be determined under paragraph (a) of this section, the country of origin of the good is the country or countries of origin of the single material that imparts the essential character of the good.
When determining the essential character of a good under section 102.11, only domestic and foreign materials that are classified in a tariff provision from which a change in tariff classification is not allowed shall be taken into consideration. Further, if there is only one material that is classified in a tariff provision from which a change in tariff classification is not allowed, then that material will represent the single material that imparts the essential character to the good for purposes of 19 CFR 102.11. Here, the refrigerator is the only foreign material that did not undergo the applicable tariff shift, which means that the refrigerator is the only aspect of the combination appliance that can be taken into consideration when determining the merchandise’s essential character. Following section 102.18 (b)(1), CBP Regulations (19 CFR 102.18 (b)(1)), the material that imparts the essential character of the good for the combination appliance is the refrigerator. Because the refrigerator is assembled in Mexico, the country of origin of the combination appliance is Mexico.
Accordingly, for a combination appliance, assembled in San Diego, California, from a refrigerator originating in Mexico and a microwave oven originating from Thailand or China, the country of origin of the cannot be the United States.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 CFR Part 181).
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 Kenneth T. Brock at 646-733-3009.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division