CLA-2-85:OT:RR:NC:N2:220
Kristina Barry
Grunfeld, Desiderio, Lebowitz, Silverman, Klestadt LLP
599 Lexington Avenue, Floor 36
New York, NY 10022-7648
RE: The country of origin of battery chargers
Dear Ms. Barry:
In your letter dated October 29, 2019 you requested a country of origin ruling on behalf of your client, Sakar International, Inc.
The two items under consideration are referred to as “car chargers” (chargers) and identified as Model Number VW13389-ASST and Model Number VW2DC6BMC. Model Number VW13389-ASST consists of a plastic enclosure containing a power rectifying printed circuit board assembly (PCBA), electrical contacts, a USB connector, and a male 12 V socket plug. Model Number VW2DC6BMC is described as a retail package containing a charger and a 6 ft. braided electric cable. The charger consists of a power rectifying PCBA, electrical contacts, a USB connector, and a male 12 V socket plug. The 6 ft. braided cable is described as having a male USB connector on one end and a male micro USB connector on the other end.
In your request, you state that for both models of chargers, the rectifying PCBA is manufactured in Vietnam by soldering numerous electrical components, such as resistors, capacitors, integrated circuits, fuses, diodes, and LEDs, onto a bare printed circuit board. Following the production of the PCBA for each charger, the female USB connectors and 12 V socket connector terminals are then soldered onto the assembly and the units are encapsulated in a plastic case. At various stages throughout the assembly process, you indicate that testing and quality control procedures are conducted on the subassemblies as well as the finished products.
With regard to the charger imported in a retail package with its USB cable, we would note General Rule of Interpretation (GRI) 1, Harmonized Tariff Schedule of the United States (HTSUS), which states in part that for legal purposes, classification shall be determined according to the terms of the headings, any relative section or chapter notes and, unless otherwise required, according to the remaining GRI’s taken in order. Goods that are, prima facie, classifiable under two or more headings, are classifiable in accordance with GRI 3.
GRI 3 (a) states that the heading that provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings refer to only part of the items in a composite good or set, those headings are to be regarded as equally specific in relation to the goods, even if one of them gives a more complete or precise description of the good. As such, they are regarded as equally specific and classification of the composite good or set is to be determined by GRI 3(b) or GRI 3(c) taken in the appropriate order in which they are set out in GRI 3. GRI 3(b) states in part that composite goods or sets, which cannot be classified by reference to GRI 3(a), are to be classified as if they consisted of the component that gives them their essential character.
The Explanatory Notes to the Harmonized Tariff System, although not legally binding, provide guidance in the interpretation of the Harmonized Commodity Description and Coding System at the international level. Explanatory Note X to GRI 3 (b) provides that the term "goods put up in sets for retail sale" means goods that: (a) consist of at least two different articles which are, prima facie, classifiable in different headings; (b) consist of articles put up together to meet a particular need or carry out a specific activity; and (c) are put up in a manner suitable for sale directly to users without re-packing. Goods classifiable under GRI 3 (b) are classified as if they consisted of the material or component which gives them their essential character, which may be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the article.
The charger set Model Number VW2DC6BMC consists of two or more articles that are, prima facie, classifiable in different headings. The charger set Model Number VW2DC6BMC also consists of articles put up together to carry out a specific activity (i.e., conversion of vehicle power to USB 5 V standard). Finally, the articles are put up in a manner suitable for sale directly to users without repacking. Therefore, the charger set Model Number VW2DC6BMC is described within the meaning of "goods put up in sets for retail sale."
In accordance with GRI 3 (b), which states in part that goods put up in sets for retail sale, that cannot be classified by reference to GRI 3 (a), are to be classified as if they consisted of the component which gives them their essential character. In our view, the article that provides the essence of the charger set Model Number VW2DC6BMC is the plug-in adapter that rectifies the electricity and provides the USB connection.
In your request, you suggest the subject chargers are properly classified under subheading 8504.40.9580, Harmonized Tariff Schedule of the United States (HTSUS). We agree.
The applicable subheading for the car chargers, Model Number VW13389-ASST and Model Number VW2DC6BMC, will be 8504.40.9580, HTSUS, which provides for “Electrical transformers, static converters…: Static converters: Other: Other.” 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 https://hts.usitc.gov/current.
With regard to the origin of the subject chargers, 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; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.”
The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character or use, different from that possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 69 C.C.P.A. 151 (1982). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993).
Based upon the facts presented and the pertinent authorities, it is the opinion of this office that the assembly process described above results in a substantial transformation of the various components and parts. The charger PCBAs for both models are manufactured with components that are transformed in Vietnam into a new and different article of commerce with a name, character, and use distinct from the individual components and bare printed circuit board. Thus, the charger Model Number VW13389-ASST and the charger set Model Number VW2DC6BMC are considered a product of Vietnam for origin and marking purposes at the time of importation into the United States.
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 Karl Moosbrugger at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division