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 with vinyl skin
Dear Ms. Gavard:
In your letter dated January 9, 2024, 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 with the vinyl skin option. The classification and country of origin for this item without the vinyl skin was determined in N336902. This item 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 vinyl skin will be affixed to the acrylic panel in Canada and functions to provide decorative appeal. 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, hardware, and vinyl skin, 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.
The applicable subheading for the Standard 3 Foot Rectangular VINdustry Peg and Panel kit with vinyl skin 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.
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 with the vinyl skin option. You state that the MDF panel, acrylic panel, and the aluminum pegs are from India. The small hardware pieces maybe from China or India. The vinyl skin is manufactured in South Korea and applied to the acrylic panel in Canada. 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; however, for a good of a NAFTA or USMCA country, the marking rules set forth in part 102 to this chapter (hereinafter referred to as the part 102 Rules) will determine the country of origin."
Pursuant to section 102.0, interim regulations, related to the marking rules, tariff-rate quotas, and other USMCA provisions, published in the Federal Register on July 6, 2021 (86 FR 35566), the rules set forth in §§ 102.1 through 102.18 and 102.20 determine the country of origin for marking purposes with respect to goods imported from Canada and Mexico. Section 102.11 provides a required hierarchy for determining the country of origin of a good for marking purposes, with the exception of textile goods which are subject to the provisions of 19 C.F.R. § 102.21. See 19 C.F.R. § 102.11.
Applied in sequential order, 19 CFR Part 102.11(a) provides 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 Part 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
The Peg and Panel kit with the vinyl skin option is neither "wholly obtained or produced" nor "produced exclusively from domestic materials." Therefore, paragraphs (a)(1) and (a)(2) cannot be used to determine the country of origin of the Peg and Panel kit with the vinyl skin option, and paragraph (a)(3) must be applied next to determine the origin of the finished article. The Peg and Panel kit with the vinyl skin option is classified under subheading 8302.50, HTSUS. The tariff shift requirement in Part 102.20 for subheading 8302.50 states:
A change to subheading 8302.10 through 8302.60 from any other subheading, including another subheading within that group.
The aluminum pegs will be classified in subheading 8302.50, HTSUS. Thus, the Peg and Panel kit with the vinyl skin option does not meet the tariff shift. As a result, Part 102.11(a) does not apply.
Section 102.11(b) states, in relevant 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:
(1) The country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good….
In determining the "essential character" of the finished good, Section 102.18(b)(1) provides, in relevant part:
For purposes of identifying the material that imparts the essential character to a good under Part 102.11, the only materials that shall be taken into consideration are those domestic or foreign materials that are classified in a tariff provision from which a change in tariff classification is not allowed under Part 102.20 specific rule or other requirements applicable to the good …
(iii) If there is only one material that is classified in a tariff provision from which a change in tariff classification is not allowed under the § 102.20 specific rule or other requirements applicable to the good, then that material will represent the single material that imparts the essential character to the good under § 102.11.
The aluminum pegs are the single component classified in a tariff provision from which a change in tariff classification is not allowed. The country of origin of the aluminum pegs is India. Accordingly, the country of origin of the Peg and Panel kit with the vinyl skin option for marking purposes will be India.
In accordance with 19 U.S.C. 1304, the wine racks must be marked to indicate that the country of origin is India.
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