CLA-2-85:OT:RR:NC:N2:220
Jennifer Diaz
Diaz Trade Law
12700 Biscayne Boulevard
Suite 301
North Miami, FL 33181
RE: The country of origin of a battery charger
Dear Ms. Diaz:
In your letter dated November 26, 2019 you requested a country of origin ruling on behalf of your client, Delta-Q Technologies Corporation.
The merchandise under consideration is identified as the Battery Charger, Product Number IC650 940-0006, which is described as a charger used in a variety of industrial and recreational machinery, such as electric pallet jacks, scissor lifts, golf carts, and e-mobility scooters. The charger consists of a printed circuit board assembly (PCBA), a cast heat sink base, electrical connectors, wires/cables, and various parts and fasteners. You state the charger is manufactured in Mexico from components sourced primarily from China and Mexico.
Based on the information supplied, the PCBA is assembled in Mexico from a bare PCB, integrated circuits, transistors, resistors, transformers, capacitors, and more, by surface mount and manual through-hole soldering processes to produce the PCBA. The PCBA, which functions to convert the input voltage and control the electrical charging of the intended machinery, is encapsulated in a conformal coating, assembled into an aluminum heat dissipating enclosure, and tested. The charger is inspected and programmed with customer specific software prior to final packaging and shipping. In your request, you state that the complete assembly process as described is conducted in Mexico.
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.
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 country, the NAFTA Marking Rules will determine the country of origin.”
Since Mexico is a NAFTA country, the NAFTA Marking Rules must be applied in determining the country of origin for purposes of marking.
Part 102, Customs and Border Protection Regulations (19 C.F.R. Part 102), sets forth the NAFTA Marking Rules. Section 102.11 provides a required hierarchy for determining the country of origin of a good for marking purposes. See 19 C.F.R. § 102.11. Applied in sequential order, the required hierarchy establishes that the country of origin of a good is the country in which:
(a)(1) The good is wholly obtained or produced;
(a)(2) The good is produced exclusively from domestic materials; or
(a)(3) 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.
Sections 102.11(a)(1) and 102.11(a)(2) do not apply to the facts presented in this case because the assembled charger is neither wholly obtained nor produced exclusively from “domestic” materials. Because the analysis of sections 102.11(a)(1) and 102.11(a)(2) does not yield a country of origin determination, we look to section 102.11(a)(3). “Foreign material” is defined in 19 C.F.R. § 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.” The applicable rule for subheading 8504.10 through 8504.50, HTSUS, in section 102.20 requires:
A change to subheading 8504.10 through 8504.50 from any other subheading outside that group.
As previously stated, the bulk of the components that make up the charger are imported into Mexico and are therefore designated as foreign material. Consequently, in order to meet the tariff shift requirements, the components must be classifiable outside of subheadings 8504.10 through 8504.50, HTSUS. Based on the information provided, nine components, identified as transformers and/or inductors, are classified within the stated subheadings which prevents the charger from satisfying the subheading change rule provided in section 102.11(a)(3). Furthermore, the combined value of the non-originating components classified within the stated subheadings exceed the allowable de minimus cap as outlined in 19 CFR 102.13. Accordingly, the subject charger does not satisfy the applicable subheading change outlined in 19 CFR 102.20.
In our view, section 102.11(b) or (c) are also not applicable as the chargers are neither a set pursuant to General Rule of Interpretation 3, nor is there a single component(s) within the assembly that imparts the essential character of the charger. Consequently, Section 102.11(d) requires:
(d) Where the country of origin of a good cannot be determined under paragraph (a), (b) or (c) of this section, the country of origin of the good shall be determined as follows:
(d)(1) If the good was produced only as a result of minor processing, the country of origin of the good is the country or countries of origin of each material that merits equal consideration for determining the essential character of the good;
(d)(2) If the good was produced by simple assembly and the assembled parts that merit equal consideration for determining the essential character of the good are from the same country, the country of origin of the good is the country of origin of those parts; or
(d)(3) If the country of origin of the good cannot be determined under paragraph (d)(1) or (d)(2) of this section, the country of origin of the good is the last country in which the good underwent production.
The production of the charger cannot be described as minor processing or simple assembly. The assembly of the individual components into a PCBA of Mexican origin substantially transforms the non-originating materials into a charging device. Thus, the country of origin of the subject charger, upon importation into the United States, is Mexico. Further, for purposes of marking and in accordance with section 102.11(d)(3), the charger will be marked with the country of origin of Mexico.
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 Karl Moosbrugger at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division