CLA-2-84:OT:RR:NC:N1:102
Filipp Zaborenko
North Palmetto Customs Brokerage LLC
803 Gable Oak Lane Fort Mill, SC 29401
RE: The tariff classification of a Cooler Keg from China
Dear Mr. Zaborenko:
In your letter dated August 10, 2023, you requested a tariff classification ruling, on behalf of your client, The Cooler Keg.
The Cooler Keg, model number CK0001, is referred to as a portable CO2 driven draft system. This system is made up of various components packaged together unassembled, ready for retail sale. The components are two refillable kegs, two custom-sized ice packs that fit the dimensions of the cooler and the shape of the kegs, a regulator with tubing, a ball lock connector, a top plug, a stainless steel tower that features two hand-operated taps and a valve that controls the flow of the beverage, a cooler with a custom-sized hole on the lid, and a bulkhead assembly that allows the tower to be integrated to the hard-sided cooler. It is noted that the CO2 cartridges will be separately imported.
In use, a beverage is poured into the kegs that have been situated in the cooler between the ice packs. Once the beverages are carbonated, the user actuates a tap to dispense a beverage.
Classification under the Harmonized Tariff Schedule of the United States (HTSUS) is governed by the principles set forth in the General Rules of Interpretation (GRIs) taken in order. GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. If the goods cannot be classified solely based on GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
GRI 2(a) states as follows: Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or failing to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled. The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level (for the 4-digit headings and the 6 digit subheadings) and facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and GRIs. While neither legally binding nor dispositive of classification issues, the ENs provide commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of the headings. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
Regarding GRI 2(a), EN V, which concerns “Articles presented unassembled or disassembled,” states the second part of Rule 2(a) provides that complete or finished articles presented unassembled or disassembled are to be classified in the same heading as the assembled article. When goods are so presented, it is usually for reasons such as requirements or convenience of packing, handling, or transport. Here, the unassembled components are intended to complete the Cooler Keg, a composite good whose purpose is to dispense a carbonated beverage.
Because the merchandise is a composite good, GRI 3(b) governs classification. GRI 3(b) states as follows: Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
Explanatory Note VIII to GRI 3(b) provides: “the factor which determines essential character will vary as between different kinds of goods. It may, for example, 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 goods.”
In this instance, the function of the Cooler Keg is to dispense a carbonated beverage. The tower, which is classified within heading 8481 as a valve, controls the flow of the beverage, allowing the carbonated beverage to be dispensed. As such, the tower imparts the essential character of the Cooler Keg.
Therefore, in accordance with GRI 3(b), the applicable subheading for the Cooler Keg, model number CK0001, will be 8481.80.3090, HTSUS, which provides for Taps, cocks, valves and similar appliances, for pipes, boiler shells, tanks, vats or the like, including pressure-reducing valves and thermostatically controlled valves; parts thereof: Other Appliances: Hand-operated: Of iron and steel: Of steel: Other. The rate of duty will be 5.6 percent ad valorem.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8481.80.3090, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e.,9903.88.03, in addition to subheading 8481.80.3090, HTSUS, listed above.
The HTSUS is subject to periodic amendment, so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, including information on exclusions and their effective dates, you may refer to the relevant parts of the USTR and CBP websites, which are available at the following addresses:
https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and
https://www.cbp.gov/trade/remedies/301-certain-products-china. 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 at https://hts.usitc.gov/current.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection 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, please contact National Import Specialist Sandra Martinez at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division