CLA-2 R:C:S 559139 MLR
Mr. Richard Miller
Recoton Corporation
2950 Lake Emma Road
Lake Mary, FL 32746
RE: Country of origin marking for wireless loudspeaker
systems; woofer; tweeter; essential character;
102.11(b)(1); 102.11(d)(1); NAFTA; Article 509; Canada
Dear Mr. Miller:
This is in reference to your letter of April 6, 1995,
requesting a ruling concerning the country of origin
marking requirements for wireless loudspeaker systems.
Samples were submitted with your request.
FACTS:
Recoton purchases and imports various wireless
loudspeakers and loudspeaker systems from an unrelated
Canadian manufacturer. The wireless loudspeakers reproduce
sound in the same manner as traditional "hard-wire"
loudspeakers. However, when used in conjunction with the
wireless transmitter which is connected to the home stereo
system, generally to the amplifier, the loudspeakers are
capable of receiving wireless broadcasts. All of the
loudspeaker systems are imported pre-packaged and ready for
sale, either through retail outlets or by mail order. Some
of the units may be placed on display by the loudspeaker
retailer; therefore, each loudspeaker and transmitter is
individually marked with a country of origin.
The W450 loudspeaker system consists of a pair of
wireless loudspeakers, a wireless transmitter, and various
AC adapters and cables. The W450 loudspeakers have both a
woofer and a tweeter which reproduce a wide range of sound
frequencies (50 Hertz to 15,000 Hertz). It is stated that
the woofer is needed to produce the lower frequencies (50
Hertz to 1,000 Hertz), and the tweeter is needed to produce
the higher frequencies (1,000 Hertz to 15,000 Hertz). Both
the woofer and the tweeter have a magnet, a front plate, a
back plate, a pole piece, and voice coil, and a former.
The differences between the woofer and the tweeter are in
the suspension, the diaphragm, and the size, which
correspond to the wavelength of the sounds each is designed
to reproduce. Additional information was also submitted on
August 23, 1995, describing the crossover network which is
basically a highpass filter that blocks low frequencies
from the tweeter.
According to the Canadian manufacturer, the countries
of origin of the major components of the W450 system are as
follows: the cabinet and other hardware/crossover are from
Canada; the woofer is from Taiwan; and the tweeter,
amplified/receiver module, RCA-type cables, AC adapters,
and transmitter are from China. Pursuant to an interim
agreement with Customs, the W450 system is marked "Speakers
Assembled in Canada with Components from China and Taiwan.
Transmitter and AC Adapters Made in China." It is stated
that the W450 wireless loudspeaker system is currently
being entered under subheading 8518.22.00, Harmonized
Tariff Schedule of the United States (HTSUS).
The WHT 421 is a wireless "sub-woofer" loudspeaker
which reproduces sounds at extremely low frequencies (37
Hertz to 125 Hertz). Although the WHT 421 operates with
the transmitter used in connection with W462 loudspeakers,
the WHT 421 is imported and sold as a single loudspeaker.
The WHT 421 contains a single sub-woofer, meaning that this
is the one element used to produce sound. According to the
Canadian manufacturer, the countries of origin of the major
components of the WHT 421 are as follows: the cabinet and
other hardware are from Canada; the woofer is from Taiwan;
and the amplified/receiver module is from China.
Presently, the WHT 421 is marked " Speakers Assembled in
Canada with Components from China and Taiwan."
The WHT 462 loudspeaker system consists of a pair of
wireless loudspeakers, a wireless transmitter, and various
AC adapters and cables. The WHT 462 loudspeakers are
commonly referred to as "rear-channel" loudspeakers. The
WHT 462 reproduces sounds at mid-range frequencies (200
Hertz to 8,000 Hertz). Each WHT 462 loudspeaker contains a
single woofer (also known as a mid-range), meaning that
this is the one element used to produce sound. According
to the Canadian manufacturer, the countries of origin of
the major components of the WHT 462 are as follows: the
cabinet and other hardware are from Canada; the woofer is
from Taiwan; and the amplified/receiver module, RCA-type
cables, AC adapter, and transmitter are from China.
Presently, the WHT 462 is marked "Speakers Assembled in
Canada with Components from China and Taiwan. Transmitter
and AC Adapters Made in China." It is stated that the WHT
462 loudspeaker system and WHT 421 loudspeaker are
currently being entered under subheading 8518.21.00, HTSUS.
The Canadian manufacturing process begins by
laminating U.S.-origin vinyl to Canadian particle board.
The laminated board is then cut into panels ready for
assembly. A grille frame is also cut from Canadian
particle board, after which it is painted black and wrapped
with acoustically transparent cloth. Next, the wood panels
are assembled into cabinets, and the amplifier/receiver,
crossover, woofer, tweeter, name plate, rear label, and
serial number are installed. Lastly, the grille is
affixed. A delayed effective date is requested to
implement the findings of this ruling.
ISSUE:
What are the country of origin marking requirements of
the WHT 462 and W450 loudspeaker systems and the WHT 421
loudspeaker?
LAW AND ANALYSIS:
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. Part 134, Customs Regulations (19 CFR Part
134) implements the country of origin marking requirements
and exceptions of 19 U.S.C. 1304.
Section 134.1(b), interim regulations, 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
NAFTA country, the NAFTA Marking Rules will
determine the country of origin. (Emphasis
added).
Section 134.1(j), interim regulations, 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), interim regulations, defines a
"good of a NAFTA country" as an article for which the
country of origin is Canada, Mexico, or the U.S. as
determined under the NAFTA Marking Rules set out at 19 CFR
Part 102, interim regulations.
Section 102.11, interim regulations, sets forth the
"NAFTA Marking Rules" for purposes of determining whether a
good is a good of NAFTA country for marking purposes.
Section 102.11, interim regulations, sets forth the
required hierarchy for determining country of origin for
marking purposes. Section 102.11(a), interim regulations,
states that the country of origin of a good is the country
in which:
(1) The good is wholly obtained or produced;
(2) The good is produced exclusively from
domestic materials; or
(3) 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.
In this case, the applicable rule is section
102.11(a)(3), interim regulations. "Foreign material" is
defined in section 102.1(e), interim regulations, 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." Accordingly, in order to determine
whether Canada is the country of origin, we must look at
those materials whose country of origin is other than
Canada. Therefore, for all of the loudspeakers (W450, WHT
421, and WHT 462), all the materials except the cabinet and
hardware/crossover are considered foreign materials.
Recoton states that the W450 loudspeakers are
classifiable under subheading 8518.22.00, HTSUS, and that
the WHT 421 and WHT 462 loudspeakers are classifiable under
subheading 8518.21.00, HTSUS. The applicable change in
tariff classification set out in section 102.20(p), Section
XVI, Chapters 84 through 85, 8518.10-8518.50 of the interim
regulations provides:
8518.10-8518.50 ... A change to subheading
8518.10 through 8518.50
from any other heading.
Recoton states that the woofer installed into all of the
loudspeakers and the tweeter installed into the W450 are
classifiable under heading 8518, HTSUS, and that the
receiver module installed into all of the loudspeakers is
classifiable under heading 8527, HTSUS. For purposes of
the RCA-type cables, AC adapters, and transmitter which are
packed with the W450 and WHT 462, section 102.17, interim
regulations, states that "[a] foreign material shall not be
considered to have undergone the applicable change in
tariff classification set out in 102.20, or satisfy the
other applicable requirements of that Section by reason of
... (c) Simple packing, repacking or retail packaging
without more than minor processing...."
Therefore, the receiver module classifiable under
heading 8527, HTSUS, and installed into the W450, WHT 421,
and WHT 462, undergoes the applicable change in tariff
classification set out in section 102.20(p). However,
since the woofer and the tweeter are classifiable under
heading 8518, HTSUS, and the RCA-type cables, AC adapters,
and transmitter are only packed together for importation
and subsequent sale in the U.S., they will not undergo the
applicable tariff shift. Therefore, for purposes of
determining the country of origin for the W450, WHT 421,
and WHT 462, section 102.11(b) of the hierarchial rules
must be applied.
Section 102.11(b), interim regulations, provides that:
Except for a good that is specifically described
in the Harmonized System as a set, or is
classified as a set pursuant to General Rule of
Interpretation 3, where the country of origin
cannot be determined under paragraph (a), the
country of origin of the good:
(1) Is the country or countries of origin of the
single material that imparts the essential
character of the good ...
When determining the essential character of a good under
section 102.11, interim regulations, section 102.18(b)
provides that only domestic and foreign materials that are
classified in a tariff provision from which a change is not
allowed shall be taken into consideration, and that in
deciding among these materials, consideration is given to
various factors, including the nature of the material or
component, bulk, quantity, weight, value, and the role of a
constituent material in relation to the use of the goods.
Based upon the above factors, we find that for the WHT
421 loudspeaker, the woofer is the single material that
imparts the essential character to this good. Accordingly,
the country of origin of the WHT 421 wireless "sub-woofer"
loudspeaker pursuant to section 102.11(b)(1), interim
regulations, is Taiwan.
In regard to the WHT 462 loudspeaker system, a change
in tariff classification is not allowed for the woofer
because it is classifiable under heading 8518, HTSUS.
Furthermore, a change is not allowed for the RCA-cables, AC
adapters, and transmitter pursuant to section 102.17
because they only undergo packaging operations.
Accordingly, among these materials, we are of the opinion
that the single material which imparts the essential
character of the WHT 462 loudspeaker system is the woofer
from Taiwan since it is the material which reproduces the
sound. Therefore, pursuant to section 102.11(b)(1), the
country of origin of the WHT 462 loudspeaker system is
Taiwan.
In regard to the W450 loudspeaker system, a change in
tariff classification is not allowed for the woofer and
tweeter because they are both classifiable under heading
8518, HTSUS. Furthermore, a change is not allowed for the
RCA-cables, AC adapters, and transmitter pursuant to
section 102.17 because they only undergo packaging
operations. In determining which material imparts the
essential character of the W450 loudspeaker system, it is
stated that in order for the W450 to reproduce a wide range
of sound frequencies (50 Hertz to 15,000 Hertz), the woofer
is needed to produce the lower frequencies (50 Hertz to
1,000 Hertz), and the tweeter is needed to produce the
higher frequencies (1,000 Hertz to 15,000 Hertz).
Furthermore, it is stated that the differences between the
woofer and tweeter only correspond to the wavelength of
sounds each is designed to reproduce. Consequently, we
find that both the woofer and the tweeter appear to be
equally important in reproducing the sound that the W450
system is designed to produce. Therefore, as no one
material imparts the essential character of the W450
system, the country of origin of the W450 system cannot be
determined pursuant to section 102.11(b)(1), interim
regulations.
As the W450 system is not specifically described in
the Harmonized System as a set or mixture, or classified as
a set, mixture or composite good pursuant to General Rule
of Interpretation 3, section 102.11(c), is not applicable.
Therefore, the next step in the country of origin
interim regulations hierarchy is section 102.11(d).
Pursuant to section 102.11(d):
Where the country of origin of a good cannot be
determined under paragraphs (a) through (c), the
country of origin of the good is:
(1) The last country in which the good underwent
production, other than by simple assembly or
minor processing.
"Production" is defined in section 102.1(n) as including,
in part, "manufacturing, processing or assembling a good."
"Simple assembly" is defined in section 102.1(o) as "the
fitting together of five or fewer parts all of which are
foreign (excluding fasteners such as screws, bolts, etc.)
by bolting, gluing, soldering, sewing or by other means
without more than minor processing." "Minor processing" is
defined in section 102.1(m) as including, in part,
"trimming, filing or cutting off small amounts of excess
materials."
Since we have already determined that the receiver
module becomes a domestic material, and the cabinet and
crossover are domestic materials, all of the parts of the
W450 are not foreign. Therefore, the production of the
W450 system in Canada does not result from a "simple
assembly." Accordingly, pursuant to section 102.11(d)(1),
interim regulations, the country of origin of the W450
loudspeaker system is Canada.
Since the country of origin of the WHT 421 and WHT 462
loudspeaker system is Taiwan, and the country of origin of
the W450 system is Canada, the marking "Speakers Assembled
in Canada with Components from China and Taiwan" is not
appropriate. Rather, the container in which the ultimate
purchaser receives the WHT 421, WHT 462 system, and W450
system should be marked "Product of Taiwan (or Canada for
the W450)," "Made in Taiwan (or Canada for the W450)," or
similar wording to indicate the country of origin of the
WHT 421, WHT 462 system, and W450 system. The individual
components do not require any marking, but they also may be
marked "Product of Taiwan (or Canada)," "Made in Taiwan (or
Canada)," or similar wording. If the individual components
of the loudspeaker systems are marked with a country other
than Taiwan (or Canada for the W450 system), the retail
container must clearly indicate the country of origin of
the WHT 421 and WHT 462 as Taiwan, and W450 as Canada, and
must make reference to the countries indicated on the
components so that the ultimate purchaser is not misled as
the actual origin of the imported good.
Accordingly, we suggest that the container be labeled
"Speaker (or Speaker System for the WHT 462 and W450) Made
in Taiwan (or Canada)." If the components contain markings
other than the country of origin, the container should be
marked "with Components from (countries identified on
various components)." Additionally, for the WHT 421 and
WHT 462, it would also be appropriate to add the words
"Assembled in Canada" as long as the country of origin
(Taiwan) is preceded by "Made in" or "Product of."
In regard to your request to delay the effective date
of this ruling in order to allow time to make the necessary
marking adjustments, although you have not submitted any
evidence of economic hardship regarding relabeling costs,
Customs is willing to delay the effective date of these
marking requirements 30 days from the date of this ruling
because of the time and labor necessary to relabel any
shipments en route.
HOLDING:
Based upon the information provided, pursuant to
section 102.11(b)(1), interim regulations, the country of
origin of the WHT 421 and WHT 462 loudspeaker system is
Taiwan, and the country of origin of the W450 loudspeaker
system pursuant to section 102.11(d)(1), is Canada.
Marking the container and/or components "Made in Taiwan (or
Canada for the W450)" would be acceptable.
A copy of this ruling letter should be attached to the
entry documents filed at the time the goods are entered.
If the documents have been filed without a copy, this
ruling should be brought to the attention of the Customs
officer handling the transaction.
Sincerely,
John Durant, Director
Commercial Rulings Division