CLA-2 OT:RR:CTF:TCM H179957 LWF
Port Director
U.S. Customs & Border Protection
Port of Detroit
477 Michigan Avenue, Room 200
Detroit, MI 48226
Attn: John Marcaccini, Import Specialist
Re: Internal Advice Request; Classification of a non-freestanding sauna kit from Canada
Dear Port Director:
This ruling is in response to a request for internal advice initiated by Livingston International, Inc., on behalf of its client, Great Saunas, Inc. (“Great Saunas”). At issue is the proper classification under the Harmonized Tariff Schedule of the United States (HTSUS) of a non-freestanding sauna kit, unassembled. The request for internal advice is sought based upon Great Saunas’ disagreement with a letter from U.S. Customs and Border Protection (CBP) on February 10, 2011, advising that the sauna kit would be classified under heading 4409, HTSUS, which provides for articles of shaped wood.
FACTS:
The goods at issue consist of materials for the construction of a non-freestanding sauna in a residential home. Counsel for Great Saunas identifies the merchandise as the “Deluxe DIY Cedar Sauna Kit” (the “Sauna Kit”) and indicates that the Sauna Kit includes approximately 192 pieces of tongue and groove Western Red cedar wood planks and several other components to be used to build the sauna. In addition to the cedar wood pieces, the Sauna Kit contains a pre-cut, duckboard floor, door frame and prefabricated door, casing, stops, door hardware, aluminum foil vapor barriers for the walls and ceiling, and one electric sauna heater.
The Sauna Kit includes detailed instructions and all necessary hardware (i.e. vents, nails, and screws) to construct the sauna. However, the finished sauna is not freestanding, and the consumer must provide the framing, insulation, wiring, and any exterior wall coverings required for installation.
Great Saunas offers the Sauna Kit in a variety of dimensions, and the finished saunas measure between approximately 16 to 80 square feet. Counsel states that the Sauna Kit will be imported unassembled, and is shipped to the purchaser in a single crate. Although the Sauna Kit contains several pre-cut cedar planks, the instruction manual indicates that the purchaser must trim and cut a large number of planks to fabricate smaller pieces necessary for construction of the sauna. After the purchaser completes construction and installation the sauna, the merchandise consists of a room-like wooden enclosure consisting of a floor, four walls, and a ceiling. Each finished Sauna Kit is equipped with bench-style seating, a built-in electric heater, sauna rocks, and temperature controls. A consumer can thus enter the structure, raise the ambient temperature of the enclosure via the temperature controls, and create steam by pouring water onto sauna rocks housed inside of the heating unit.
ISSUE:
What is the proper classification of the non-freestanding sauna kit?
LAW AND ANALYSIS:
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that most goods are classified by application of GRI 1, that is, according to the terms of the headings of the tariff schedule and any relative section or chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the heading and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
The HTSUS subheadings under consideration are as follows:
4409 Wood (including strips and friezes for parquet flooring, not assembled) continuously shaped (tongued, grooved, rebated, chamfered, V-jointed, beaded, molded, rounded or the like) along any of its edges, ends or faces, whether or not planed sanded or end-jointed:
4409.10 Coniferous:
Other:
4409.10.90 Other…
* * * * *
8516 Electric instantaneous or storage water heaters and immersion heaters; electric space heating apparatus and soil heating apparatus; electrothermic hairdressing apparatus (for example, hair dryers, hair curlers, curling tong heaters) and hand dryers; electric flatirons; other electrothermic appliances of a kind used for domestic purposes; electric heating resistors, other than those of heading 8545; parts thereof:
Electric space heating apparatus and electric soil heating apparatus:
8516.29.00 Other…
* * * * *
9406 Prefabricated buildings:
9406.00.40 Of wood…
* * * * *
Note 4 to Chapter 94, HTSUS, provides that the term “prefabricated buildings” means:
buildings which are finished in the factory or put up as elements, entered together, to be assembled on site, such as housing or worksite accommodation, offices, schools, shops, sheds, garages, or similar buildings.
* * * * *
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding, the ENs provide commentary on the scope of each heading of the HTSUS and are thus useful in ascertaining the proper classification of merchandise. It is CBP’s practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
EN 94.06 provides, in pertinent part, as follows:
This heading covers prefabricated buildings, also known as “industrialized buildings,” of all materials.
These buildings, which can be designed for a variety of uses, such as housing, worksite accommodation, offices, schools, shops, sheds, garages and greenhouses, are generally presented in the form of:
- complete buildings, fully assembled, ready for use;
- complete buildings, unassembled;
- incomplete buildings, whether or not assembled, having the essential character of prefabricated buildings.
GRI 2(a), HTSUS, 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.
* * * * *
Subheading 9406.00.40, HTSUS, provides for “Prefabricated buildings: Of wood.” The term “prefabricated buildings” is not defined in the HTSUS. However, EN 94.06 provides guidance on the scope of heading 9406, HTSUS, and lists exemplars of certain types of “prefabricated buildings” as contemplated by the text of the heading. Necessary elements, such as walls, trusses, beams, and joists, may be presented partially assembled or cut to size. However, the component pieces at issue must possess the essential character of a complete, prefabricated structure as built in a factory. Accordingly, the principal issue in this case is whether the unassembled Sauna Kit possesses the essential character of a prefabricated building of heading 9406, HTSUS.
The reference in GRI 2(a) to “articles presented unassembled or disassembled” does not cover merchandise which requires more than mere assembly. Pomeroy Collection, Ltd. v. United States, 559 F. Supp. 2d 1374, 1387 n.13 (Ct. Int'l Trade 2008). Specifically, merchandise is not “unassembled or disassembled” for purposes of GRI 2(a) if the components must “be subjected to any further working operation for completion into the finished state.” Id.; see also Explanatory Note 2(a)(VII).
Likewise, although the classification of unassembled buildings and structures is a complex and fact-specific determination, CBP has distinguished unassembled prefabricated kits that possess the essential character of the finished structure from those that are merely “a collection of materials needed to build [a structure] and do not have the essential character of a prefabricated building.” See Headquarters Ruling Letter (“HQ”) 962347, dated November 19, 2011. In HQ 962347, CBP concluded that a prefabricated home kit, consisting of extensively worked “logs” with interlocking double dovetail joints, possessed the essential character of a prefabricated building classifiable in subheading 9406.00.40, HTSUS. The “logs” were cut to a specific size, numbered, and partially assembled in the factory to ensure each joint properly fit. The “logs” were then disassembled for transportation purposes and shipped to the construction site.
By contrast, CBP also determined in HQ 962347 that kits consisting of cut lumber that was not recognizable as specific parts of a prefabricated home did not possess the essential character of a prefabricated structure, noting that “a conglomeration of materials shipped together does not become a prefabricated building simply by packing them together.” In reaching this conclusion, CBP reiterated its finding from HQ 960165, dated September 18, 1997, that “since a prefabricated building must be a building finished in the factory, the merchandise cannot be materials that are simply pre-cut to size and nothing more. Also, any cutting of indeterminate or random materials on site is limited to circumstances when the merchandise has entered the United States in sections and only minor cutting is required.”
In this case, the Sauna Kit is not classifiable pursuant to GRI 2(a) in heading 9406, HTSUS, because the cedar planks must be subjected to further cutting and trimming operations to fabricate the pieces necessary to construct the sauna. Great Saunas states that the instant merchandise is an unassembled kit consisting of approximately 192 pieces cedar lumber and supplied with all the necessary components for construction of a complete sauna. However, the cedar wood pieces are not pre-mounted in modular sections, and the completed sauna is not finished in Great Sauna’s factory. Moreover, the purchaser must supply the necessary framing, insulation, wiring, and exterior wall coverings, and the installation instructions state, “Since you’ll need to trim tongue and groove to fit your sauna space, the use of a mitre saw will speed up installation.” The fabrication steps described by Great Sauna are not minor cutting operations, and the material list for the Sauna Kit indicates that that the purchaser must measure and cut no fewer than 132 of the 192 total cedar pieces from larger planks included in the kit. The Sauna Kit’s cedar wood components are incapable of standing on their own, and without consumer-supplied insulated stud walls, construction of the Sauna Kit is impossible. Furthermore, although the Sauna Kit includes a prefabricated, modular door unit, it is clear that the door represents a very small part of the kit. Therefore, we cannot reasonably conclude that it provides the essential character of the finished sauna. As the instant merchandise must be subjected to further working operations beyond mere assembly, we find that the Sauna Kit is a collection of building materials that does not possess the essential of a finished sauna. Consequently, GRI 2(a) is not applicable, and the materials in the kit are classified separately under their applicable tariff provisions.
With respect to importer’s alternative argument that the Sauna Kit should be classified pursuant to GRI 3(b) as “goods put up in sets for retail sale,” we note that EN (X) to GRI 3(b) states, in pertinent part:
(X) For the purposes of this Rule, the term “goods put up in sets for retail sale” shall be taken to mean good which:
consist of at least two different articles which are, prima facie, classifiable in different headings. Therefore for example, six fondue forks cannot be regarded as a set within the meaning of this Rule;
consist of products or articles put up together to meet a particular need or carry out a specific activity;
(c) are put up in a manner suitable for sale directly to users without repacking (e.g., in boxes or cases or on boards).
While we agree that the Sauna Kit clearly satisfies the criteria found in EN(X)(a) and (c), we do not agree that the cedar planks in the Sauna Kit are put up to meet a particular need or specific activity for purposes of GRI 3(b). CBP has addressed the particular need or specific activity requirement as requiring “a relationship between the articles contained in a group, and such relationship must establish that the articles are clearly intended for use together for a single purpose or activity to comprise a set under GRI 3(b).” CBP Informed Compliance Publication, Classification of Sets (2004). Because Great Saunas does not pre-cut the cedar planks into individually identifiable, finished pieces, the lumber remains suitable for use in any number of uses that are not unique to the construction of the sauna. Therefore, it is our position that the Sauna Kit does not satisfy the “particular need” or “specific activity” requirement.
Consistent with CBP’s analysis of GRI 3(b), the United States Court of International Trade agrees that “for goods put up together to meet the ‘particular need’ or ‘specific activity’ requirement and thereby be deemed a set, they must be so related as to be clearly intended for use together or in conjunction with one another for a single purpose or activity.” See Estee Lauder, Inc. v. United States, No. 07-00217, 2012 Ct. Intl. Trade LEXIS 1, at *16 (Jan. 3, 2012) (quoting CBP Informed Compliance Publication, Classification of Sets, at 12); and see Dell Products LP v. United States, 714 F. Supp. 2d 1253, 1260 (Ct. Int’l Trade 2010) (stating that GRI 3(b) “only requires that the component satisfies a ‘particular’ need”). In Estee Lauder, the Court considered the classification of cosmetic items put up together for the activity of applying makeup, and concluded that because each item by itself was specifically related to makeup and had an identifiable, individual use that was intended for use together or in conjunction with one another for the single activity of putting on makeup, the cosmetic items met a particular need and were therefore “retail sets” pursuant to GRI 3(b). Estee Lauder, No. 07-00217, 2012 Ct. Intl. Trade LEXIS at *16-17.
In the instant case, by contrast, CBP cannot conclude that the materials included in the Sauna Kit are intended for use together or in conjunction with one another for the single purpose of constructing a sauna in a residential home. Great Saunas advertises the Sauna Kit on its website for the purpose of assembling a sauna in a residential home, and states in its Request for Internal Advice that “only the components necessary to assemble the sauna are included, and each component contributes to the end product of the sauna.” However, as discussed supra, the cedar lumber must be subjected to further working operations beyond mere assembly before it can be used to assemble the sauna and therefore, does not possess the essential character of a sauna. Importantly, because the cedar planks have not been cut or trimmed to their final dimensions, the lumber included with the kit remains suitable for any number of different applications (e.g., the construction of closets, cabinets, or furniture). As such, we conclude that although the electric sauna heater is clearly designed for use in a sauna, the predominance of the unfinished cedar planking obscures any single purpose or activity that the Sauna Kit may satisfy. We find that the heater and lumber are not clearly intended for use together for a single purpose or activity, and the Sauna Kit cannot be considered a “retail set” pursuant to GRI 3(b). Accordingly, the items contained in the Deluxe DIY Cedar Sauna Kit are classified separately, under their applicable tariff provisions.
HOLDING:
By application of GRI 1, the cedar would pieces are properly classified under heading 4409, HTSUS, specifically under subheading 4409.10.90, HTSUS, which provides for “Wood (including strips and friezes for parquet flooring, not assembled) continuously shaped (tongued, grooved, rebated, chamfered, V-jointed, beaded, molded, rounded or the like) along any of its edges, ends or faces, whether or not planed sanded or end-jointed: Coniferous: Other: Other.” The 2012 general, column one rate of duty is free.
In addition, articles classifiable under subheading 4409.10.90, HTSUS, exported from any country (including Canada) into the United States are subject to special entry requirements based on the “Softwood Lumber Act of 2008.” The interim amendments to Parts 12 and 163 of title 19 of the Code of Federal Regulations (19 CFR Parts 12 and 163) establish special entry requirements applicable to shipments of softwood lumber products exported from any country into the United States. (Softwood Lumber Act of 2008, Title VIII of the Tariff Act of 1930 as added by section 3301 of Title III, Subtitle D, of the Food, Conservation, and Energy Act of 2008 (Public Law 110-246)).
By application of GRI 1, the electric sauna heater is properly classified under heading 8516, HTSUS, specifically under subheading 8516.29.00, HTSUS, which provides for “Electric instantaneous or storage water heaters and immersion heaters; electric space heating apparatus and soil heating apparatus; electrothermic hairdressing apparatus (for example, hair dryers, hair curlers, curling tong heaters) and hand dryers; electric flatirons; other electrothermic appliances of a kind used for domestic purposes; electric heating resistors, other than those of heading 8545; parts thereof: Electric space heating apparatus and electric soil heating apparatus: Other.” The 2012 general, column one rate of duty is 3.7% ad valorem.
By application of GRI 1, the remaining items contained in the Deluxe DIY Cedar Sauna Kit are classified separately under their applicable tariff provisions. Should the internal advice requester require a ruling on the classification of each item, we encourage them to submit a ruling request to the CBP National Commodity Specialist Division at One Penn Plaza, 10th Floor, New York City, New York 10119.
You are to mail this decision to counsel for the internal advice requester no later than sixty days from the date of this decision. At that time, Regulations and Rulings of the Office of International Trade will make the decision available to CBP personnel, and to the public, on the CBP Home Page on the World Wide Web at http://www.cbp.gov, by means of the Freedom of Information Act, and other methods of publication.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division