CLA-2-76:OT:RR:NC:N1:113
Mr. Matt Nakachi
Junker & Nakachi
One Market Street Spear Tower, Suite 3600
San Francisco, CA 94105
RE: The tariff classification and country of origin marking of shells, end-caps and O-rings from China
Dear Mr. Nakachi:
In your corrected ruling request dated March 28, 2019, on behalf of your client Aeration Technology, LLC, you requested a classification and marking ruling on shells, end-caps and O-rings. Photographs, drawings and a manufacturing process flow chart were submitted for our review.
This ruling addresses issues A and D of the six items in your request letter. Issues B, C, E, and F were addressed in N303461 dated April 9, 2019.
Your submission identified the products at issue as shells, sealing end-caps and O-rings to be used as components of finished Elite Chargers used in whipped-cream dispensers. You stated in your letter that “The Elite Charger will be manufactured in the United States from bulk nitrous oxide (N2O) sourced in the United States, as well as from components (a rubber O-Ring, aluminum shell, and steel end-cap) imported from the People’s Republic of China (PRC).” You indicated that in condition as imported, the incomplete partial aluminum shells, unattached steel end-caps and O-rings are not dedicated to any specific use and are not capable of holding or dispensing gas.
The applicable subheading for the steel end caps will be 8309.90.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for stoppers, caps and lids (including crown corks, screw caps and pouring stoppers), capsules for bottles, threaded bungs, bung covers, seals and other packing accessories and parts thereof, of base metal; other. The rate of duty will be 2.6 percent ad valorem.
The applicable subheading for the aluminum shells will be 7613.00.0000, HTSUS, which provides for aluminum containers for compressed or liquefied gas. The rate of duty will be 5 percent ad valorem.
You suggested classification for the O-rings composed of ethylene propylene diene monomer (EPDM) synthetic rubber or from another type of vulcanized rubber in subheading 4016.93.1010, HTSUS, which provides for other articles of vulcanized rubber other than hard rubber: other: gaskets, washers and other seals: of a kind used in automotive goods of chapter 87, O-rings. This classification is not appropriate because the rubber O-rings are not being used in automotive goods. O-rings composed of EDPM rubber or any type of vulcanized rubber would be classified in 4016.93.5010, HTSUS, which provides for other articles of vulcanized rubber other than hard rubber: gaskets, washers and other seals: other: O-rings. The rate of duty will be 2.5 percent ad valorem.
The applicable subheading for the silicon plastic O-rings will be 3926.90.4510, HTSUS, which provides for other articles of plastics and articles of other materials of headings 3901 to 3914: other: gaskets, washers and other seals: O-rings. The rate of duty will be 3.5 percent ad valorem.
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 World Wide Web at https://hts.usitc.gov/current.
Effective July 6, 2018, the Office of the United States Trade Representative (USTR) imposed an additional tariff on certain products of China classified in the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(b), HTSUS. The USTR imposed additional tariffs, effective August 23, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(d), HTSUS. Subsequently, the USTR imposed further tariffs, effective September 24, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(f) and U.S. Note 20(g), HTSUS. For additional information, please see the relevant Federal Register notices dated June 20, 2018 (83 F.R. 28710), August 16, 2018 (83 F.R. 40823), and September 21, 2018 (83 F.R. 47974). Products of China that are provided for in subheading 9903.88.01, 9903.88.02, 9903.88.03, or 9903.88.04 and classified in one of the subheadings enumerated in U.S. Note 20(b), U.S. Note 20(d), U.S. Note 20(f) or U.S. Note 20(g) to subchapter III shall continue to be subject to antidumping, countervailing, or other duties, fees and charges that apply to such products, as well as to those imposed by the aforementioned Chapter 99 subheadings.
Products of China classified under subheadings 8309.90.0000, 7613.00.0000, 4016.93.5010 and 3926.90.4510, HTSUS, unless specifically excluded, are subject to the additional 10 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheadings 8309.90.0000, 7613.00.0000, 4016.93.5010 and 3926.90.4510, HTSUS, listed above.
The tariff is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Notice cited above and the applicable Chapter 99 subheading.
You have also asked for the country of origin marking requirements for the shells, end-caps and O-rings at the time of importation into the United States. We note that in New York Ruling N303461 dated April 9, 2019, Customs and Border Protection (CBP) determined that the imported shells, end-caps and O-rings are substantially transformed as a result of the U.S. processing when they are used to make the elite chargers, and therefore the U.S. manufacturer is the ultimate purchaser of the imported products.
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 134.41(b), Customs Regulations (19 CFR 134.41(b)), mandates that the ultimate purchaser in the U.S. must be able to find the marking easily and read it without strain. Section 134.1(d) defines the ultimate purchaser as generally the last person in the U.S. who will receive the article in the form in which it was imported. 19 CFR 134.1(d)(1) states that if an imported article will be used in manufacture, the manufacturer may be the ultimate purchaser if he subjects the imported article to a process which results in a substantial transformation of the article. The case of U.S. v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940), provides that an article used in manufacture which results in an article having a name, character or use differing from that of the constituent article will be considered substantially transformed and that the manufacturer or processor will be considered the ultimate purchaser of the constituent materials. In such circumstances, the imported article is excepted from marking and only the outermost container is required to be marked. See 19 CFR 134.35.
In this case, the imported shells, end-caps and O-rings are substantially transformed as a result of the U.S. processing as discussed in N303461, and therefore the U.S. manufacturer is the ultimate purchaser of the imported shells, end-caps and O-rings and under 19 CFR 134.35 only the containers which reach the ultimate purchaser are required to be marked with the country of origin “China”.
This ruling is being issued under the provisions of Part 177 of the Customs 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 Ann Taub at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division