MAR-2 RR:CTF:TCM 968277 CAM
Mr. John R. Wilson
VP Product Management
Absocold Corporation
P.O. Box 1545
Richmond, IN 47375-1545
RE: Country of Origin Marking of Cook ‘N Cool Microwave – Refrigerator; Article 509
Dear Mr. Wilson:
This is in reference to your electronic ruling request, dated March 30, 2006, requesting a ruling on behalf of Absocol Corp., concerning the country of origin marking of a certain Cook ‘N Cool microwave – refrigerator (Cook ‘N Cool).
FACTS:
The subject merchandise is comprised of a microwave mounted to a refrigerator. The microwave is manufactured in China and the refrigerator is manufactured in Mexico. Additional assembly parts for the final Cook ‘N Cool product including a device for power allocation, screws, and brackets are manufactured in the United States. Once the completed microwave and the completed refrigerator enter the United States, the subject merchandise undergoes assembly and testing.
According to the information that you provided, the assembly procedures in United States consist of: (1) mounting the microwave to the refrigerator with brackets and screws; (2) securing and connecting the steel power allocator to the appliances; and (3) affixing a nameplate to the bottom of the microwave door. Aside from the aforementioned, the remaining procedures conducted in the United States are exclusively for testing purposes.
The advertisements that you provided display that the Cook ‘N Cool comes in several different models. The dimensions of the refrigerators vary between models, as do some of the functions. For example, some models have auto defrost capability and other models having energy saving functions. Another notable difference is that some of the refrigerators have a single door, while other models have separate doors for the freezer and refrigerator.
You are requesting that Customs and Border Protection (CBP) determine if “sufficient assembly/testing transformation” takes place on the subject merchandise at a Richmond, Indiana facility for its country of origin to be considered the United States.
ISSUE:
Is the country of origin of the Cook ‘N Cool Microwave – Refrigerator the United States?
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 the 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 marking on the imported goods the country of which the goods is the product. “The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods are 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) of the 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 the marking laws and regulations].
Section 134.1(j), CBP Regulations (19 CFR 134.1(j)), provides the “NAFTA (North American Free Trade Agreement) 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 in Part 102, CBP Regulations (19 CFR Part 102). In this instance, we will apply the NAFTA Marking Rules because your inquiry involves a refrigerator manufactured in Mexico in which the final product undergoes assembly in the United States.
The country of origin marking requirements for a “good of a NAFTA country” are determined in accordance with Annex 311 of the North American Free Trade Agreement. The rules used for determining the country of origin of a good imported from a NAFTA country are set forth in Part 102, CBP Regulations (19 CFR 102). Section 102.11(a), CBP Regulations (19 CFR 102.11(a)) provides 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. Specifically, Section 102.1(g)(10), CBP Regulations (19 CFR 102.1(g)(10)), states a good wholly obtained or produced is “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.” The Cook ‘N Cool would not qualify as “a good wholly obtained or produced” in a NAFTA country because the refrigerator is manufactured in Mexico, the microwave is made in China, and the articles are mounted together in the United States. As such, the country of origin of subject merchandise cannot be determined under section 102.11(a)(1).
Turning to section 102.11(a)(2), CBP Regulations, (19 CFR 102.11 (a)(2)) the origin of a 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.” The Cook ‘N Cool is not produced exclusively from domestic materials because the microwave is made in China and the refrigerator is made in Mexico. Accordingly, the country of origin cannot be determined under section 102.11(a)(2), and the analysis must continue to section 102.11(a)(3), CBP Regulations (19 CFR 102.11(a)(3)).
Pursuant to section 102.11(a)(3), CBP Regulations, (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 section 102.20”. “Foreign material” is defined in section 102.1(e), CBP Regulations (19 CFR 102.1(e)), 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.” Section 102.20 sets forth the specific tariff classification changes under the Harmonized Tariff Schedule of the United States (HTSUS), and/or other operations, that are required in order for the country of origin to be determined on the basis of operations performed on the foreign materials contained in a good.
In order to assess whether a foreign material has undergone the applicable tariff change, classification of the finished good, the assembled Cook ‘N Cool, and the foreign materials, the refrigerator and the microwave, must first be established. We begin with the microwave, which this office has determined is classified in subheading 8516.50.0030, HTSUS, which provides for: “…; other electrothermic appliances of a kind used for domestic purposes;…: microwave ovens, having a capacity not exceeding 22.5 liters.”
The refrigerators are classified in heading 8418, HTSUS, but are classified in different subheadings depending on the model. The refrigerator models with two doors are classifiable in subheading 8418.10.00, HTSUS, which provides for: “refrigerators, freezers and other refrigerating or freezing equipment, electric or other;…; parts thereof: combined with refrigerator-freezers, fitted with separate external doors.” The refrigerator models with one door are classified in subheading 8418.21.00, HTSUS, which provides for: “refrigerators, freezers and other refrigerating or freezing equipment, electric or other;…; parts thereof: refrigerators, household type: compression type.”
This office has found that by application of Section XVI, Note 3, the Cook ‘N Cool is a composite machine classified by its principal function, which is the refrigerator. As such, the completed Cook ‘N Cool is classified in heading 8418, HTSUS, as a refrigerator. Specifically, the Cook ‘N Cool is classified in subheading 8418.21.00, HTSUS, or 8418.10.00, HTSUS, depending on whether the model has a separate door for the freezer.
Since the assembled Cook ‘N Cool is classified in either subheading 8418.10.00, HTSUS, or subheading 8418.21.00, HTSUS, the applicable tariff shift rule is found in section 102.20(o), CBP Regulations (19 CFR 102.20(o)), which provides as follows: “8418.10 – 8418.91…………A change to subheading 8418.10 through 8418.91 from any other subheading, including another subheading within that group.” In other words, the microwave and the refrigerator prior to assembly in the Cook ‘N Cool must be classifiable in any other subheading besides the subheading which the finished Cook ‘N Cool is classified in.
In this case, the foreign materials used to assemble the Cook ‘N Cool do not undergo the applicable tariff shift. The microwave does undergo the applicable tariff shift because it shifts from heading 8516, HTSUS, to heading 8418, HTSUS. However, the refrigerator does not undergo the applicable tariff shift because the refrigerator and the finished Cook ‘N Cool are classified in the same subheading. As a result, each foreign material incorporated in the Cook ‘N Cool does not undergo the applicable tariff shift as set forth in Section 102.20 (o). Thus, the country of origin of the good may not be determined in accordance with this provision.
Given that the country of origin cannot be determined by section 102.11(a) (incorporating section 102.20) of the CBP Regulations, the next step in the country of origin regulations hierarchy is section 102.11(b), CBP Regulations (19 CFR 102.11(b)), which states, in pertinent part:
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) of this section:
The country of origin of the good is the country or countries of origin of the single material that imparts the essential character of the good, or…
When determining the essential character of a good under section 102.11, only domestic and foreign materials that are classified in a tariff provision from which a change in tariff classification is not allowed shall be taken into consideration. See 19 CFR 102.18(b)(1). Further, if there is only one material that is classified in a tariff provision from which a change in tariff classification is not allowed, then that material will represent the single material that imparts the essential character to the good for purposes of 19 CFR 102.11.
Here, the refrigerator is the only foreign material that did not undergo the applicable tariff shift, which means that the refrigerator is the only aspect of the Cook ‘N Cool that can be taken into consideration when determining the merchandise’s essential character. Following section 102.18 (b)(1), CBP Regulations (19 CFR 102.18 (b)(1)), the material, therefore, that imparts the essential character of the good for the Cook ‘N Cool is the refrigerator. Because the refrigerator is assembled in Mexico, the country of origin is Mexico and, therefore, cannot be the United States.
HOLDING:
Pursuant to Part 102, CBP Regulations (19 CFR 102), the United States cannot be considered the country of origin for the assembled Cook ‘N Cool. According to Part 102.11(b)(1), CBP Regulations, (19 CFR 102.11(b)(1)), the country of origin of the Cook ‘N Cool will be the same as the country of origin of the component that imparts the essential character under section 102.18 (b) (1), which is the refrigerator from Mexico. Therefore, the Cook ‘N Cool must be marked to indicate that Mexico is the country of origin pursuant to 19 U.S.C. 1304.
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Myles B. Harmon, Director
Commercial & Trade Facilitation Division