CLA-2-84:OT:RR:NC:N2:220
Catherine Spencer Freight Expediters
6920 Engle Rd. Suite II
Middleburg Heights, OH 44130
RE: The tariff classification, country of origin, and marking of the Pi Desktop 4 Kit
Dear Ms. Spencer:
In your letter dated March 6, 2020 you requested a tariff classification and origin marking ruling on behalf of your client, International Products Sourcing Group.
The merchandise under consideration is identified as the Pi Desktop 4 Kit, which consists of a retail package containing a Raspberry Pi 4 (Pi 4) single board personal computer (PC), a plastic enclosure, a mouse, a keyboard, a 32 GB micro SD card, a micro HD male to HDMI cable, and a 5 V power supply.
The Pi Desktop 4 Kit consists of two or more different articles that are, prima facie, classifiable in different headings. The Starter Kit also consists of articles put up together to carry out a specific activity (i.e., computing). Finally, the articles are put up in a manner suitable for sale directly to users without repacking. Therefore, the kit in question is described within the meaning of "goods put up in sets for retail sale".
In your submission, you state that the Pi 4 and the plastic enclosure are manufactured in the United Kingdom, the power supply is manufactured in Cambodia, and the mouse, the keyboard, the 32 GB micro SD card, and the HDMI cable are manufactured in China. In China, the Pi 4 will be removed from its original packaging and placed inside of the plastic enclosure. The enclosed Pi 4 will then be packaged into a compartmentalized retail box along with the power supply, the mouse, the keyboard, the SD card, and the HDMI cable.
General Rule of Interpretation ("GRI") 3(b) states in part that goods put up in sets for retail sale, which 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. As each item in the subject kit is put up together for the specific purpose of contributing to the operation of the Pi 4, and the bulk of the cost is attributed to the Pi 4, it is the opinion of this office that the Pi 4 imparts the essential character of the subject kit.
The Pi 4 is described as a single board, fully functional PC consisting of a quad core ARM V8 processor, 4 GB memory, a micro SD slot, multiple USB ports, a general purpose input/output (GPIO) connector, multiple HDMI ports, audio and composite video ports, wired and wireless Ethernet, and Bluetooth. The Pi 4 comes preloaded with the NOOBS Operating System but is capable of using other operating systems of the user’s choosing. There are a number of software applications available to use on the Pi 4 to perform a multitude of data processing tasks and educational projects.
In your request, you suggest the Pi 4 is considered an automatic data processing (ADP) machine classified under subheading 8471.50.0150, Harmonized Tariff Schedule of the United States (HTSUS). We would note that for a good to be considered as an ADP machine, it must satisfy all the requirements set forth in Chapter 84 Note 5 (A), HTSUS, which requires that the machine is capable of:
storing the processing program necessary for the execution of the program;
being freely programmed in accordance with the requirements of the user;
performing arithmetical computations specified by the user; and
executing without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run.
In use, the Pi 4 works as a miniature PC and allows the user to perform general computing tasks, such as in electronics projects where computing functions are required but at a smaller size and cost. Additionally, the Pi 4 is used in a wide range of educational projects such as the learning of various program languages, the manipulation of hardware components with its GPIO slot, and networking functions. The Pi 4 is widely recognized as an open source device with modest computing power that performs tasks based solely on the needs of the user. In this regard, there are no hardware or software blocks preventing the user from downloading and executing installed programs or off-the-shelf software applications, or gaining internet access, or performing tasks traditionally achieved by a typical laptop or desktop PC. As such, the Pi 4 is considered a freely programmable ADP machine that satisfies the criteria set forth by Note 5(A) to Chapter 84, HTSUS.
The applicable subheading for the Pi Desktop 4 Kit will be 8471.50.0150, HTSUS, which provides for “Automatic data processing machines and units thereof… Processing units other than those of subheading 8471.41 or 8471.49, whether or not containing in the same housing one or two of the following types of unit: storage units, input units, output units: Other.” The general 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.
Concerning your request for a ruling on the country of origin marking for the Pi Desktop 4 Kit, 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), in pertinent part, 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.”
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).
In our view, the assembly operations performed in China, which consists of inserting the Pi 4 into a plastic enclosure, and the packaging of supporting peripherals in a retail container, is not complex. Based on the facts presented, it is the opinion of this office that the enclosed Pi 4 is not transformed in China into a new and different article of commerce with a name, character, and use distinct from the articles exported from the United Kingdom. As the Pi 4 imparts the essential character of kit, we conclude that the Pi Desktop 4 Kit is considered a product of the United Kingdom for country of origin purposes at the time of importation into the United States.
Regarding the marking of the Pi Desktop 4 Kit, Treasury Decision (T.D.) 91-7, published in Volume 25, Customs Bulletin and Decisions, at 6 (January 16, 1991), addressed, among other things, the application of country of origin marking requirements to sets. It was stated therein, at 16:
. . . in most cases, the mere inclusion of an item in a collection will not substantially transform it into an article with a new name, character or use and, therefore, each item must be separately marked with its own country of origin. (Where the marking of the container will reasonably indicate the country of origin to the ultimate purchaser, the container may be marked instead of the individual articles. See 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d)). This result is consistent with the purpose of the marking statute since the ultimate purchaser’s decision as to whether to buy the set might be influenced by the country of origin of any of the items in the set, whether or not an item gives the set its essential character.
Following T.D. 91-7, the mere packaging of the peripherals of the Pi Desktop 4 Kit in China does not substantially transform those individual components and so the origin of each peripheral in the subject kit must be identified. Therefore, the items of foreign origin, i.e., the mouse, the keyboard, the 32 GB micro SD card, the HDMI cable, and the 5 V power supply, either must be individually marked with their origin, provided such marking is visible through the retail packaging, or the packaging must identify the origin of each of these items.
Importations of this product may be subject to the provisions of Section 133 of the Customs Regulations if they copy or simulate a registered trademark, trade name or copyright recorded with U.S. Customs and Border Protection. If you are an authorized importer of the product we recommend notifying your local Customs office prior to importation.
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