CLA-2-90:OT:RR:NC:N1:105
Adrienne Braumiller
Braumiller Law Group PLLC
5220 Spring Valley Road, Suite 200
Dallas, TX 75254
RE: The tariff classification and country of origin marking of semi-finished optical measuring and checking instruments from China
Dear Ms. Braumiller:
In your letter dated December 13, 2018, on behalf of Quality Vision International, Inc., you requested a tariff classification and country of origin ruling.
The products at issue are described as semi-finished optical measuring machines. There are five models at issue, identified as the OCTO 200 SZ, the OCTO 250 SZ, the OCTO 300 SZ, the STARLITE GX-F, and the STARLITE GX-P.
The complete OCTO and STARLITE products are described as video measuring systems that incorporate precision optical lenses, a movable stage, and a digital camera to visually examine and inspect the physical features of manufactured articles to verify their dimensional integrity. The OCTO and STARLITE products are also sold with a dimensional metrology software suite that enables it to measure objects in three dimensions, though this software is installed subsequent to importation into the Untited States. Per the information provided, the OCTO and STARLITE models all operate along the same principles, the models simply vary in respect to their features and measurement ranges.
You indicate that the OCTO and STARLITE models are imported into the United States in a semi-finished state. The models are assembled in China and undergo additional processing in the United States after they are imported. Said processing includes programming the devices with the dimensional metrology software, combination with a computer, and incorporating a myriad of other components.
Additional processing aside, at the time of importation the OCTO and STARLITE models have the essential character of a finished optical measuring or checking instrument, and would be classified as such in accordance with General Rule of Interpretation 2(a).
The applicable subheading for the semifinished OCTO 200 SZ, OCTO 250 SZ, OCTO 300 SZ, STARLITE GX-F, and STARLITE GX-P will be 9031.49.9000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Measuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter; profile projectors; parts and accessories thereof: Other optical instruments and appliances: Other: Other. The general rate of duty will be free.
Regarding your inquiry as to the country of origin of the completed optical measuring machines, the marking statute, Section 304 of the 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 requirements of 19 U.S.C. 1304. Pursuant to 19 CFR Section 134.1(b) the country of origin is 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” per the meaning of Part 134. A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, or use which differs from the original material subjected to the process. That being said, an assembly process that is not determined to be complex and meaningful will generally not result in a substantial transformation.
The semi-finished OCTO and STARLITE models at issue are assembled in China from U.S. and Chinese origin components. You indicate that the U.S.-origin components include optical imaging components (lenses, motorized zoom assembly, and light source), as well as the circuit board assembly. These components are combined with a Chinese-origin platform structure (with a heavy base of granite or metal, depending on the model), frame, and movable stage. Additionally, secondary hardware and electronic components are incorporated into the products in China, though the country of origin of these products is said to vary.
In your submission you aver that the country of origin of the imported, semi-finished OCTO and STARLITE models should be the United States, as a number of the apparatus’ critical components are of U.S. origin and impart the essence of the good, irrespective of the additional processing that takes place in China.
This office respectfully disagrees with that assertion. While the U.S.-origin components are no doubt vitally important to the function of the (semi) finished OCTO and STARLITE machines, they are not measuring and checking instruments in their own right. The components must be combined with the Chinese-origin base, frame, and platform structure (along with myriad secondary components), in China, to become the incomplete machines that will be imported into the United States for further processing. The manufacturing/combining process described is not a minor one that leaves the identity of the articles intact. This office finds that components do undergo a substantial transformation in China. As a result, the country of origin of the semi-finished OCTO and STARLITE models will be China.
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 9031.49.9000, 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., 9903.88.01, in addition to subheading 9031.49.9000, 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.
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 Jason Christie at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division