CLA-2-90:OT:RR:NC:N1:105
Kim Caywood-Pierce
A.N. Deringer, Inc.
173 West Service Road
Champlain, NY 12919
RE: The tariff classification and country of origin marking of Optical Time Domain Reflectometers and Optical Loss Test Sets from Canada
Dear Ms. Caywood-Pierce:
In your letter dated June 27, 2018, on behalf of EXFO, Inc., you requested a tariff classification ruling.
The products at issue in your submission consist of devices used in the testing of fiber optic networks. Your submission covers three Optical Time Domain Reflectometers (OTDR), the MAX-710B Last-Mile OTDR, the MAX-715B Last-Mile OTDR, and the MAX-720C Access OTDR, along with two Optical Loss Test Sets (OLTS), the MAX-940-ICERT Fiber Certifier OLTS, and the MAX-945 Fiber Certifier OLTS. The OTDRs are described as test and measurement units that are based on reflectometry and are used to find faults and troubleshoot fiber optic telecommunications networks. The OLTSs are described as test and measurement units that incorporate a light source and power meter, and can be used to measure variables like fiber length, insertion loss, and optical return loss.
In your submission you indicate that the hardware for the five testing devices is assembled at an EXFO facility in China. The electrical, optical, and mechanical components of each device are sourced from China and assembled together, however the assembled units undergo no testing or programming prior to their shipment to Canada. Upon arrival in Canada, the units are electrically tested and calibrated, software is installed, and the devices are programmed to customer specifications. You state that the un-programmed, untested units imported into Canada have a much lower value than that of the finished units exported from Canada.
Based on the information provided, the MAX-710B, MAX-715B, and the MAX-720C are similar in form and function to the OTDR covered by New York Ruling Letter (NYRL) N287417, dated July 18, 2017. The MAX-940-ICERT and the MAX-945 operate in a manner akin to that of the OLTS described in NYRL R02925, dated January 4, 2006.
The applicable subheading for the MAX-710B, MAX-715B, MAX-720C, MAX-940-ICERT and the MAX-945 will be 9027.50.4060, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Instruments and apparatus for physical or chemical analysis (for example, polarimeters, refractometers, spectrometers, gas or smoke analysis apparatus); instruments and apparatus for measuring or checking viscosity, porosity, expansion, surface tension or the like; instruments and apparatus for measuring or checking quantities of heat, sound or light (including exposure meters); microtomes; parts and accessories thereof: Other instruments and apparatus using optical radiations (ultraviolet, visible, infrared): Other: Electrical: Other. The general rate of duty will be free.
In your submission you inquire about the country of origin marking of the OTDR and OLTS devices at issue. 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. Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.
The country of origin marking requirements for a “good of a NAFTA country” are also determined in accordance with Annex 311 of the North American Free Trade Agreement (“NAFTA”), as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057) (December 8, 1993) and the appropriate Customs Regulations. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in Part 102, Customs Regulations. The marking requirements of these goods are set forth in Part 134, Customs Regulations.
Section 134.1(b) of the regulations defines “country of origin” as the country of manufacture, production, or growth of any article of foreign origin entering the U.S. 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 this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.
Section 134.1(j) of the regulations provides that the “NAFTA Marking Rules” are the rules promulgated for the purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) of the regulations, 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. Section 134.45(a)(2) of the regulations, provides that “a good of a NAFTA country” may be marked with the name of the country of origin in English, French or Spanish.
The MAX-710B, MAX-715B, MAX-720C, MAX-940-ICERT and the MAX-945 are processed in Canada prior to being imported into the United States. Since Canada is defined under 19 CFR 134.1(g) as a NAFTA country, we must apply the NAFTA Marking Rules in order to determine if the goods are subject to the NAFTA marking requirements.
Part 102 of the regulations sets forth the NAFTA Marking Rules. Section 102.11 of the regulations sets forth the required hierarchy for determining country of origin for marking purposes. Section 102.11(a) states that the country of origin of a good is the country in which (1) the good is wholly obtained or produced; (2) the good is produced exclusively from domestic materials; or (3) each foreign material incorporated in that good undergoes an applicable change in tariff classification as set out in section 102.20 and satisfies any other applicable requirements of that section.
Sections 102.11(a)(1) and 102.11(a)(2) do not apply to the OTDR and OLTS devices covered by your submission. Section 102.20 for 9027.10-9027.90 requires a change to any other good of subheading 9027.10 through 9027.90 from any other subheading, including another subheading within that group. Since the devices do not undergo the appropriate tariff shift, section 102.11(a)(3) does not apply.
Section 102.11(b) states that except for a good that is specifically described in the Harmonized System as a set, or classified as a set pursuant to General Rule of Interpretation 3, where the country of origin cannot be determined under paragraph (a) of section 102.11, then the country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good. This section does not apply to the OTDR and OLTS devices.
Section 102.19 states that except in the case of a good of paragraph (b), if a good which is originating within the meaning of 181.1(q) of this chapter is not determined under section 102.11(a) or (b) to be a good of a single NAFTA country, the country of origin of the good is the last NAFTA country in which the good underwent processing other than minor processing. Under Section 102.19, the NAFTA Preference Override, the country of origin of the The MAX-710B, MAX-715B, MAX-720C, MAX-940-ICERT and the MAX-945 devices is Canada for marking purposes.
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 Evan Conceicao at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division