MAR-2 RR:CTF:TCM 968132 RSD
Fuase Nara, Esq.
Pillsbury Winthrop Shaw Pitman
1540 Broadway
New York, New York 10036-4039
RE: Country of Origin Marking of a Removable Stand Made in China and Packaged and Sold with a LCD Television Set Assembled in Mexico; NAFTA Marking Rules, 19 CFR 102.20
Dear Ms. Nara:
This is in response to your letter dated February 17, 2006, requesting a ruling on behalf of Sharp Electronic Corporation (“Sharp”) concerning the country of origin marking requirements for a removable stand for a liquid crystal display (LCD) television receiver set. Additionally, we have also considered your supplemental submission dated April 11, 2006, via e-mail.
FACTS:
The subject merchandise is a removable television stand that will be packaged with an “AQUOS” LCD color television receiver Model No. LC-45D4OU imported from Mexico, where it had been assembled. The television stand is made in China. It is manufactured and designed for the sole purpose of being used in connection with the AQUOS television receiver. The television stand is made of plastic and consists of two pieces an arched support base pedestal and a rectangular connection brace. The brace is attached to the top of the pedestal and then inserted into the opening on the bottom of the television receiver.
You state that the removable television stand has no independent practical purpose other than to be used in conjunction with the AQUOUS television receiver. The value of the stand accounts for less than 2% (approximately 0.8% to 1.5%) of the total value of the television. Sharp currently imports the LCD television sets with the stand already fastened to it. To minimize the size of the containers in which the televisions are imported, Sharp will change its practice and will begin importing the television sets with the stands unattached to them.
In NY K81062, dated November 18, 2003, Customs and Border Protection (CBP) ruled that the country of origin marking “Assembled in Mexico by Sharp” and “Technical design by Sharp Japan. ” was an acceptable country of origin marking for the imported televisions.
In your submission of April 11, 2005, you indicate that the LCD television is classified in subheading 8528.12.72, Harmonized Tariff Schedule of the United States (HTSUS), as a television receiver with a flat panel screen. We understand that the TV stand will be not classified separately, if it is imported together with the television. However, you also indicate that you believe that if the TV stand, base pedestal and brace, were imported into the United States by themselves, they would be classifiable in subheading 8529.90.90, HTSUS, as other parts of television receivers.
You inquire about the country of origin marking requirements for the television stand and contend that it does not have to be marked to indicate its own country of origin. As such, you maintain that television receiver as well as its container may be marked with a phrase such as “Assembled in Mexico”.
ISSUE:
Under the NAFTA marking rules, what is the country of origin marking requirements for a stand made in China that is designed for use with an LCD television receiver that is assembled in Mexico, when it is packaged in the same box as the television receiver?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit in such a manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. 1304 was that the ultimate purchaser should be able to know by an inspection of the markings on the imported goods the country of which the good is the product. “The evident purpose is to mark the goods so at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” United States v. Friedlaender & Co., 27 C.C.P.A. 297 at 302 (1940).
Part 134, CBP Regulations (19 CFR 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b), CBP Regulations (19 CFR 134.1(b)), defines “country of origin” 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 North America Free Trade Agreement (NAFTA) country, the NAFTA Marking Rules determine the country of origin.
Section 134.1(j), CBP Regulations (19 CFR 134.1(j)), provides that the “NAFTA Marking Rules” are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g), CBP
Regulations (19 CFR 134.1(g)), 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, set forth at 19 CFR Part 102. Because the television sets are assembled in Mexico, in this instance we will apply the NAFTA Marking Rules.
Section 102.11(a), CBP Regulations (19 CFR 102.11(a)), sets forth the required hierarchy under the NAFTA Marking Rules for determining country of origin for marking purposes for goods other than textile and apparel products. This section states that the country of origin of a good is the country in which:
The good is wholly obtained or produced;
The good is produced exclusively from domestic materials; or
Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
Section 102.1(g), CBP Regulations (19 CFR 102.1(g)), defines a good wholly obtained or produced as including “A good produced in that country exclusively from goods referred to in paragraphs (g)(1) through (g)(10) of this section or from their derivatives, at any stage of production.” In this instance, the LCD television receiver is assembled in Mexico, while the television stands are made in China, and they will be packaged together in the same box in Mexico before being imported into the United States. Therefore, the stand and the
television receiver would not qualify as “a good wholly obtained or produced” in a country, and the country of origin of the television stand may not be determined under section 102.11(a)(1).
The next step under the hierarchy is to consider whether the country of origin may be determined according to section 102.11(a)(2), CBP Regulations. Under this section, the origin of the good may be based on the origin of the materials used to produce the good, provided the good is produced exclusively from domestic materials. Section 102.1(d), CBP Regulations (19 CFR 102.1(d)), defines domestic material as “a material whose country of origin as determined under these rules is the same country as the country in which the good is produced.” Since the television stand is made in China, articles imported are not produced exclusively from domestic materials (i.e., Mexican). Accordingly, their country of origin cannot be determined under section 102.11(a)(2). Consequently, to determine the country of origin of the television stands under the NAFTA Marking Rules, the analysis must continue to 19 CFR 102.11(a)(3).
Pursuant to 19 CFR 102.11(a)(3), the country of origin of a good is the country in which “each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in §102.20 and satisfies any other applicable requirements of that section.” Section 102.1(e), CBP Regulations (19 CFR 102.1(e)) defines “foreign material” as “a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced.” The television receiver is classified in subheading 8528.12.72, HTSUS, as a television receiver with a flat panel screen, with a video display diagonal exceeding 34.29 cm.
With respect to the classification of the TV stand, you indicate that you believe that it should be classified in subheading 8529.90.99, HTSUS, as other parts of televisions. However, based on your description and after careful consideration, we conclude that classifying the TV stand, as a part of a television is not correct. CBP generally will consider an article to be a part if: it is combined with other articles to be used; or it is an integral, constituent or component part, without which the article to which it is joined could not function; or it aids in the safe and efficient operation of the main article; or it is identifiable by shape or other characteristics as an article solely or principally used as a part. In contrast, CBP generally will consider an article to be an accessory if: it facilitates use or handling; or it widens the range of uses of the main article; or it is not needed to enable the good with which it is used to fulfill its intended function; or it is identifiable as being intended solely or principally for use with a specific article. See HQ 962634, dated October 25, 2001.
Because the television can function without the stand being attached to it, we find that the stand would not constitute a part of the television. While not essential to the operation of the television, the stand nevertheless facilitates television viewing, and thus it enhances the use of the television. Therefore, we find that the TV stand is an accessory. However, we note that accessories for television are not included in heading 8529, HTSUS. Therefore, the TV stand cannot be classified in heading 8529, HTSUS. Based on the information you have provided, that the TV stand is composed of plastic, for the purposes of this ruling, we conclude that the most appropriate classification of the TV stand is subheading 3926.90.98, HTSUS, as: “Other articles of plastic: Other: Other. “
The applicable rule under 19 CFR 102.20(o), CBP Regulations (19 CFR 102.20(o)), states:
8528.12-8528.30 A change to subheading 8528.12 through from any other subheading, including another subheading within that group, except from subheading 8540.11 through 8540.12.
In this instance, in determining if there is a tariff shift, it is noted that the foreign material is the Chinese made TV stand which is classified in subheading 3926.90.98, HTSUS. The final product imported into the United States is the Mexican LCD television receiver, which is classified in subheading 8528.12.72, HTSUS. Consequently, when the Chinese made TV stand is combined with the Mexican assembled television in Mexico, it undergoes the above cited applicable tariff shift set forth in 19 CFR 102.20(o).
Although the Chinese made television stand undergoes the applicable tariff shift to change its country of origin to Mexico, 19 CFR 102.17(c) indicates that a foreign material shall not be considered to have undergone an applicable change in tariff classification specified in § 102.20 or § 102.21 or to have met any other applicable requirements of those sections merely by reason of simple packing or repacking or retail packaging without more than minor processing. Based on your description in your submissions, it appears all that is being done to the Chinese made TV stand in Mexico is to package it in the same box with the television receiver. Thus, in accordance with 19 CFR 102.17(c), the TV stand cannot be considered to have undergone the applicable tariff shift specified in 19 CFR 102.20(o).
In determining the country of origin marking for the TV stand, we note, however, that the NAFTA rules of origin for marking purposes also provide for a De Minimis rule with respect to value. Section 102.13(a), CBP Regulations (19 CFR § 102.13(a)), states, in pertinent part, that:
Except as otherwise provided in paragraphs (b) and (c) of this section, foreign materials that do not undergo the applicable change in tariff classification set out in § 102.20 or satisfy the other applicable requirements of that section when incorporated into a good shall be disregarded in determining the country of origin of the good if the value of those material is no more than 7 percent of the value of the good or 10 percent of the value of a good of Chapter 22, Harmonized System.
You have stated in your submissions that the TV stand accounts for less than two (2) percent of the value of the completed television. Assuming that this value figure is accurate, since it is less than 7 percent, under 19 CFR 102.13(a), the TV stand can be disregarded in determining the country of origin of the finished television, which is the product that is being imported into the United States. Therefore, in the instant case, if the television stand is imported in the same box as the television receiver, it is not required to be marked to indicate its country of origin. In addition, the country of origin of the television stand, China, does not have to be disclosed in the country of origin marking statement appearing on the LCD AQUOS television or its container.
HOLDING:
In accordance with 19 CFR 102.13(a), if the television stand which is packaged together with an LCD AQUOS television receiver, accounts for less than 2 percent of the value of the completed television set, neither the stand, the television receiver, nor the container in which they are both sold are required to be marked to indicate the country of origin of the television stand.
Sincerely,
Gail A. Hamill, Chief
Tariff Classification and Marking Branch