OT:RR:CTF:EMAIN H325541 MFT
Center Director, Machinery CEE
Service Port of Chicago
5600 Pearl Street
Rosemont, IL 60018
Attn: Jeremy Olson, Supervisory Import Specialist, Machinery CEE
Re: Application for Further Review of Protest No. 3901-22-126797; Classification of Dispensing Stations for Hand Sanitizers
Dear Center Director:
This letter is in response to an Application for Further Review (AFR) of Protest No. 3901-22-126797, filed on May 12, 2022, by counsel on behalf of The Alchemist Group, LLC (protestant). The AFR concerns the classification under the Harmonized Tariff Schedule of the United States (HTSUS) by U.S. Customs and Border Protection (CBP) of certain dispensing stations for hand sanitizers. In reaching the determination below, CBP has considered information submitted with the Protest and AFR, as well as supplemental information and videos provided following the March 4, 2024 conference between counsel for the protestant and CBP.
FACTS:
The merchandise under consideration are dispensing stations for automatic hand sanitizer dispensers from China. The subject stations are used to house and support automatic hand sanitizer dispensing machines in an upright position.[1] The stations are predominantly made of plastic and consist of, inter alia: a drip tray for catching excess sanitizer; the dispenser housing; clear, plastic upper and lower panels; a flat stand on the bottom that rests on the floor; and an upper door enclosure.
When fully assembled, the dispensing stations stand upright from the floor, keeping the dispensing machines at a proper height and in a fixed, stable position for ease of use. The station, with the dispensing machine, can also be placed in different locations around an office, lobby, library, and other areas where germs are more likely to spread (or where people are more likely to use the dispensing unit).
During the conference on March 4, 2024, the protestant explained that the dispensing machines can also be fitted to a separately sold wall mount. Moreover, following the conference, the protestant submitted videos demonstrating the use of the dispensing machine without the station. As the protestant acknowledges, and as one video demonstrates, "The [d]ispenser does function properly when it is lying on the ground." In that video, the dispensing machine lies face up on a floor while a man kneels next to the machine. The man places his hand across the machine's sensor and the machine projects sanitizer - some of which lands across his fingers; some of which lands on the floor.
In another video, the dispensing machine is placed face up on a table, and in a similar test, the man places his hands in front of the machine's sensor. The machine then projects sanitizer onto his hands.
The subject entries were liquidated between December 3 and December 31, 2021, under heading 9403, HTSUS, specifically subheading 9403.70.40, HTSUS, which provides for "Other furniture and parts thereof: Furniture of plastics: Of reinforced or laminated plastics." The protestant claims the subject merchandise should be classified under heading 8424, HTSUS, specifically subheading 8424.89.90, HTSUS, which provides for "Mechanical appliances (whether or not hand operated) for projecting, dispersing or spraying liquids or powders; fire extinguishers, whether or not charged; spray guns and similar appliances; steam or sand blasting machines and similar jet projecting machines; parts thereof: Parts: Other."
ISSUE:
Whether the subject dispensing stations for hand sanitizers are classified under heading 8424, HTSUS, as parts of a mechanical appliance for projecting liquids, or under heading 9403, HTSUS, as other furniture.
LAW AND ANALYSIS:
We note that this is a protestable matter under 19 U.S.C. 1514(a)(2) as it concerns a decision on classification and the rate and amount of duties chargeable. This protest was timely filed on May 12, 2022, within 180 days of liquidation, pursuant to 19 U.S.C. 1514(c)(3). Further review of Protest No. 3901-22-126797 is properly accorded to the protestant pursuant to 19 C.F.R. 174.24(b) because the decision against which the protest was filed "[i]s alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of CBP or his designee or by the Customs courts," specifically the classification of hand sanitizer dispensing stations. The AFR was forwarded to CBP Headquarters for consideration.
Classification under the HTSUS is in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods will be determined 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 headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 will then be applied in order.
The HTSUS headings under consideration are as follows:
8424 Mechanical appliances (whether or not hand operated) for projecting, dispersing or spraying liquids or powders; fire extinguishers, whether or not charged; spray guns and similar appliances; steam or sand blasting machines and similar jet projecting machines; parts thereof:
* * * * *
9403 Other furniture and parts thereof.
Note 2 to Chapter 94, HTSUS, provides in pertinent part that "[t]he articles (other than parts) referred to in headings 9401 to 9403 are to be classified in those headings only if they are designed for placing on the floor or ground."
Pursuant to GRI 1, to be classified under heading 8424, HTSUS, the subject dispensing stations must meet the terms of that heading. The protestant argues that the dispensing stations constitute "parts" of a "mechanical appliance[] . . . for projecting, dispersing or spraying liquids" under heading 8424, HTSUS.
The term "part" is not defined in the HTSUS. The courts have considered the nature of "parts" under the HTSUS, and two distinct though not inconsistent tests have resulted.[2] The first, articulated in United States v. Willoughby Camera Stores, Inc., requires a determination of whether the imported item is an "integral, constituent, or component part, without which the article to which it is to be joined, could not function as such article."[3] The second, set forth in United States v. Pompeo, provides that when an imported item is dedicated solely for use with another article, and when applied to that use, the item meets the definition of a "part" established in Willoughby, the item constitutes a "part" of the article. Under either line of cases, an imported item is not a part if it is "a distinct and separate commercial entity."[4]
In Pompeo, the Court of Customs and Patent Appeals considered whether certain superchargers designed specifically for use with automobiles constituted "parts" of Ford and Austin automobiles. The uncontroverted and pertinent facts in Pompeo were as follows:
The undisputed testimony indicates that the imported superchargers are dedicated solely for use on automobiles; that extensive alterations in the engines are necessary to install the superchargers; that Ford automobiles and Austin automobiles as manufactured do not have superchargers; [. . .] that the Ford engine and the Austin engine will operate if no supercharger has been installed therein; and that once a supercharger has been installed in a Ford or Austin engine[,] the engine will not operate if the supercharger fails.[5]
The court disagreed with Customs' view that "since Ford and Austin automobiles function normally and to the extent intended by their respective manufacturers without superchargers, superchargers are not parts for those automobiles." Applying this position forces a paradox, as the court reasoned, because "at [the] time of importation[,] a supercharger installed in an automobile would definitely be a part of that automobile[,] but an uninstalled supercharger could not be said to be a part for any specific automobile," even though both superchargers perform the same function.[6] Instead, the court maintained that the case must turn on "the nature and function of the imported superchargers," and held that when installed in the automobiles, the superchargers met the definition of "parts" as established by Willoughby.[7]
Without more, an item cannot be a part if it merely supports another article that is separate, complete, and can "perform[] its separate function without loss of any of its essential characteristics."[8] In Willoughby, the Court of Customs and Patent Appeals considered whether certain tripods constituted "parts" of certain cameras.[9] It found that:
"[A]lthough it may be necessary to use tripods as supports for the involved cameras, tripods are not, for that reason, integral, constituent, or component parts of such cameras. The most that can be said is that the two articles - a tripod and a camera - are designed to be used together, one as a support for the other, and that they are chiefly so used."[10]
The tripods in Willoughby merely supported the cameras, and the court stressed that the mere compatibility of the tripod and the camera "does not necessarily make either a part of the other."[11] Rather, an item must be "necessary to the completion of that article" to constitute a part.[12] Thus, the camera was found to be "entirely able to function and perform its original purpose without the thing being imported," namely the tripod.
There is no dispute that the subject dispensing stations are "dedicated solely for use" with the dispensing machines. The determinant, then, is whether the stations, when applied to their intended use, are "integral, constituent, or component parts" of the dispensing machines, such that without the stations, the machines could not function as such articles.
We find that the subject dispensing stations fail to meet the Pompeo test since they are not integral to the functioning of the dispensing machines. The function of the dispensing machine is to project sanitizer liquid. The dispensing machines contain all the internal components necessary to carry out that function. Thus, the machines constitute complete "mechanical appliances for projecting liquid," under heading 8424, HTSUS. As the protestant claims, and as indicated by its submitted videos, the dispensing machines are mechanically capable of projecting sanitizer with or without a device for supporting the machine off the floor - be it the subject dispensing stations or the separately sold wall mounts. In fact, the stations being interchangeable with the wall mounts at all preponderates against their supposed necessity as "parts." The protestant contends that despite this fungibility, we must consider both the stations and the wall mounts as parts since they both can be used to support the machine at a proper height for normal use. But this view contradicts the plain meaning of "integral." The subject dispensing station cannot be wholly replaceable by an entirely different article and yet be "necessary" for the dispensing machine's completion. In reality, nothing about the subject dispensing stations contributes to the dispensing machine's function, and therefore, the stations cannot be "parts" of the dispensing machines.
The protestant asserts that the dispensing station "supercharges" the dispensing machine by providing mobility that "changes the performance of the [d]ispenser" and "provide[s] effective protection against germs in high-traffic areas." In addition, without the dispensing station, the dispensing machine loses its mobility and "cannot function as a mobile [d]ispenser." But this analysis misperceives the issue. The question is whether the machines can function "as such articles" (i.e., as dispensing machines) in the absence of the stations, not whether the machines continue to exhibit a new trait imparted by a distinct and separate article in the absence of such article. The machine does not suddenly become an article of heading 8424, HTSUS, by the mere virtue of any mobility that may be supplied by the station. Besides, since nothing in the terms "mechanical appliances for projecting liquids" suggests that such articles must be mobile to be classified as such, the addition of a dispensing station or a wall mount does not change the character of the supported good. The mechanical function of projecting sanitizer liquid remains unchanged.
Additionally, the protestant claims that to use the dispensing machine on the floor "would result in violations to the Americans with Disabilities Act, as no one in a wheelchair would be able to access the [d]ispenser if it is on the floor." The protestant cautions that the machine would create a trip or slip hazard if it were to be used on the floor, or if it were to fall off a table due to not being fixed by a support. Even if we pretend that these concerns are relevant, the wall mount could address them all.
We finally note that the role that the subject dispensing stations "play" in relation to the dispensing machine's functioning is substantially similar to that of the tripods in Willoughby. The tripods in Willoughby were primarily designed as supports for the cameras, and the appellee argued that the tripods were "essential to the proper use by photographers of certain cameras." Nonetheless, the Court of Customs and Patent Appeals concluded that the tripods were not essential to the functioning and use of the cameras, which were complete in and of themselves. Similarly, the stations here are designed to support their respective article: the dispensing machines. Further, like the appellee in Willoughby, the protestant maintains that the stations are sine qua non for the machines - that they are necessary for the proper use of the dispensing machine to act as a proper mobile unit, particularly one that is not a tripping hazard or a violation of the Americans with Disabilities Act, and is suitable for targeting high-traffic areas. But though these dispensing stations may be useful as supports for the machines, they "are not, for that reason, integral, constituent, or component parts" of such machines.
The Court of Customs and Patent Appeals expressed in Willoughby that "[t]he most that can be said is that the two articles-a tripod and a camera-are designed to be used together, one as a support for the other, and that they are chiefly so used." We similarly find that the most that can be said of the dispensing stations is that they and the dispensing machines are designed to be used together, one as support for the other. The context may differ - photography versus sanitation - but the supporting roles played by both are largely similar and equally unpersuasive.
We hold that the subject dispensing stations are properly classified under heading 9403, HTSUS. Note 2 to Chapter 94, HTSUS, requires that the dispensing stations be "designed for placing on the floor or ground" to be classified under heading 9403, HTSUS. The dispensing stations are clearly designed to be placed on the floor: they include a stand on the bottom and, when the stations are fully assembled, they allow the dispensing machines to stand upright from the floor. The dispensing stations also constitute "furniture" as they can equip a space for sanitizing users' hands.[13] As such, the dispensing stations fall under heading 9403, HTSUS.
HOLDING:
By application of GRIs 1 (Note 2 to Chapter 94) and 6, the dispensing stations are classified under heading 9403, specifically subheading 9403.70.40 , HTSUS, which provides for "Other furniture and parts thereof: Furniture of plastics: Of reinforced or laminated plastics." The column one general rate of duty is free.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 9403.70.40, 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., 9903.88.04, in addition to subheading 9403.70.40, HTSUS, listed above.[14]
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 https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively.
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 on the internet at www.usitc.gov/tata/hts/.
You are instructed to DENY the protest.
In accordance with Part III, Section III of the CBP Protest/Petition Processing Handbook (HB 3500-015, October 2021, p. 26), you are to complete the processing of this decision no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the Customs Rulings Online Search System ("CROSS") at https://rulings.cbp.gov/, which can be found on the CBP website at http://www.cbp.gov and other methods of public distribution.
Sincerely,
Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division
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[1] We emphasize that the articles being imported are the supports for the machines. The dispensing stations are not the machines themselves; the stations themselves cannot dispense hand sanitizer; and the actual machines are not under consideration.
[2] See Bauerhin Tech's Ltd. v. United States, 110 F.3d 774, 779 (Fed. Cir. 1997).
[3] See Bauerhin, 110 F.3d at 778 (quoting United States v. Willoughby Camera Stores, Inc., 21 C.C.P.A. 322, 324 (1933)).
[4] See Baxter Healthcare Corp. v. United States, 182 F.3d 1333, 1338-39 (Fed. Cir. 1999) (quoting Willoughby, 21 C.C.P.A. at 325).
[5] United States v. Pompeo, 43 C.C.P.A. 9, 10-11 (1955).
[6] See Pompeo, 43 C.C.P.A. at 12-13.
[7] See Pompeo, 43 C.C.P.A. at 14.
[8] See Willoughby, 21 C.C.P.A. at 325.
[9] Willoughby, 21 C.C.P.A. 322.
[10] See id.
[11] See id. at 324 (citing Columbia Shipping Co. v. United States, 11 Ct. Cust. App. 281 (1922); United States v. Kalter Mercantile Co., 11 Ct. Cust. App. 540 (1923)).
[12] Willoughby, 21 C.C.P.A. at 324.
[13] There is no dispute that the subject dispenser stations do not constitute "seats" under heading 9401, HTSUS; "medical, surgical, dental, or veterinary furniture" under heading 9402, HTSUS; or "barbers' chairs and similar chairs" that rotate, recline, and elevate under heading 9402, HTSUS.
[14] Please note that the duty rate applicable to goods covered by subheading 9903.88.16, HTSUS, will depend on the entry dates. Subdivisions (t) and (u) of U.S. Note 20 to Chapter 99, HTSUS, and subheading 9903.88.16, HTSUS, were suspended at the time certain entries were made.