CLA-2-83:OT:RR:NC:N5:121
Adrienne Gavard
Blue Grouse Wine Cellars
1621 Welch Street
North Vancouver, V7P 3G9
Canada
RE: The classification and country of origin of a wall mounted wine rack kit
Dear Mr. Gavard:
In your letter dated December 4, 2023, you requested a tariff classification and country of origin determination ruling. Product descriptions and website for the products were provided for our review.
The article under consideration is identified as the Standard 3 Foot Rectangular VINdustry Peg and Panel kit. It consists of an MDF back panel with predrilled holes for mounting to a wall, an acrylic face panel that mounts on top of the MDF panel, aluminum pegs that screw into the panel and small hardware pieces that affix the pegs to the panel. It comes in three different peg options, Single Deep Pegs, Double Deep Pegs and Triple Deep Pegs for different wine bottle capacity. The components in the kit are intended to assemble into a wall mounted rack designed to hold wine bottles.
Classification under the Harmonized Tariff Schedule of the United States (HTSUS) is governed by the principles set forth in the General Rules of Interpretation (GRIs) taken in order. GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. If the goods cannot be classified solely based on GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order. GRI 2(a) 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.
Furthermore, the Explanatory Notes to the Harmonized Commodity Description and Coding System (ENs) represent the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS, and are generally indicative of the proper interpretation of these headings. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989). The EN for GRI 2(a) states in “Rule 2(a) (Articles presented unassembled or disassembled) (V): The second part of Rule 2 (a) provides that complete or finished articles presented unassembled or disassembled are to be classified in the same heading as the assembled article. When goods are so presented, it is usually for reasons such as requirements or convenience of packing, handling or transport.” In this instance, the unassembled components are intended to complete a wall mounted wine rack, a composite good whose purpose is to hold wine bottles.
Because the merchandise is a composite good, GRI 3(b) governs classification. GRI 3(b) states as follows: Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. Explanatory Note VIII to GRI 3(b) provides: “the factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.”
In the case of the wine rack, the aluminum pegs provide the function of holding wine bottles and predominate by value over the MDF panel, acrylic panel, and hardware, and therefore provide the essential character of this article. As such, the wall mounted wine rack is classified by application of GRI 3(b), according to its aluminum pegs component.
Therefore, in accordance with GRI 3(b), the applicable subheading for the Standard 3 Foot Rectangular VINdustry Peg and Panel kit will be 8302.50.0000, HTSUS, which provides for Base metal mountings, fittings and similar articles suitable for furniture, doors, staircases, windows, blinds, coachwork, saddlery, trunks, chests, caskets or the like; base metal hat racks, hat-pegs, brackets and similar fixtures; …: Hat-racks, hat pegs, brackets and similar fixtures, and parts thereof. The rate of duty will be free.
You indicate that there is an optional custom vinyl skin that will increase the cost of the panel. You state that this option is quoted on an individual basis. Please submit a separate ruling request with the value and weight breakdown for each component and provide clear photos of the vinyl skin.
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 at https://hts.usitc.gov/current.
In your ruling request, you also inquire as to the country of origin of the subject wall mounted wine rack kit. You state that the MDF panel, acrylic panel, and the aluminum pegs are from India. The small hardware pieces may be from China or India. The various components are then packaged in Canada for shipping to customers.
The "country of origin" is defined in 19 CFR 134.1(b) 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.” A substantial transformation occurs when an article loses its separate identity and becomes a new article having a new name, character or use.
In this instant case, the aluminum pegs made in India impart the essential character of the finished article as they predominate by value and function. Therefore, the entire kit shall be considered country of origin India for entry purposes.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Jennifer Jameson at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division