CLA 2-OT:RR:NC:N4:463
Ms. Karen Miranda
12211 W Marsham Cir
Houston, TX 77066
RE: Classification, country of origin, and marking for Kool Baby Playpens made in China
Dear Ms. Miranda:
This ruling is being issued in reply to your letter dated April 6, 2021, requesting a ruling on classification, country of origin and marking for Kool Baby Playpens. In lieu of samples, illustrative literature and product descriptions were provided.
FACTS:
The subject merchandise consists of collapsible playpen models PP-02 and PP-03, both of which are made of a metal frame and polyester fabric, and include a cradle, changing table, two locking castors and a cover to facilitate transportation of the playpens and their accessories. When set up, model PP-02 measures 110 cm (L) x 76 cm (W) x 77 cm (H) and weighs 9.6 kg, and model PP-03 measures 105 cm (L) x 77cm (W) x 80 cm (H) and weighs 10.5 kg. In addition to the above-mentioned components, model PP-02 includes a mosquito net. In addition to the above-mentioned components, model PP-03 includes a bassinet, hanging toys, diaper holder and an organizer bag. They are made in China of fabric and metal components of Chinese origin but will be packaged and labeled in Mexico. See the following images:
Model PP-02:
Model PP-03:
ISSUE:
What is the classification, marking, and country of origin of the subject merchandise?
CLASSIFICATION:
Classification under the Harmonized Tariff Schedule of the United States (HTSUS) is made in accordance with the General Rules of Interpretation (GRIs). 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 (together known as legal 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 are then applied in order.
Because the playpens are composed of different materials (metal frame, polyester fabric), they are considered composite goods for tariff purposes. The Explanatory Notes to the HTSUS, GRI 3(b) (VIII) state that “the factor which determines essential character will vary between different kinds of goods. It may, for example, be determined by the nature of the materials or components, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.” When the essential character of a composite good can be determined, the whole product is classified as if it consisted only of the material or component that imparts the essential character to the composite good. This office finds that the essential character of the subject playpens is imparted by their textile components.
This decision is supported by numerous rulings, such as HQ 956018 and HQ 954180, as well as NY N301386, NY N249820, NY J82926 and NY D81831. In all cases, CBP determined that the textile components, rather than the steel frame, imparted the essential character to the collapsible playpens.
The applicable subheading for the Kool Baby Playpens, model numbers PP-02 and PP-03, will be subheading 9403.89.6003, HTSUS, which provides for “Other furniture and parts thereof: Furniture of other materials, including cane, osier, bamboo or similar materials: Other: Other: Cribs, toddler beds, bassinets, and cradles; play yards and other enclosures for confining children.” 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 on World Wide Web at https://hts.usitc.gov/current.
COUNTRY OF ORIGIN AND MARKING:
The marking statute, Section 304(a), Tariff Act of 1930, as amended (19 U.S.C. § 1304(a)), provides that, unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit in such manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. § 1304 was “that the ultimate purchaser should be able to know by an inspection of the marking on imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.”
To allow for a more seamless transition period, at this time, CBP continues to utilize the marking rules set forth in 19 C.F.R. Part 102, with the exception of 19 C.F.R. § 102.19, for purposes of country of origin marking with respect to goods 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. 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 requirements of these rules are satisfied.
Since the playpens are not wholly obtained or produced in a single country, Rule (1) of § 102.11(a)(1) is inapplicable.
Since the playpens are not produced exclusively from domestic materials, Rule (2) of § 102.11(a)(2) is inapplicable.
Proceeding to Rule (3) of § 102.11(a)(3), we are instructed to apply § 102.20, which sets forth specific rules by tariff classification. The pertinent tariff shift rule for subheading 9403.89 states:
9403.10-9403.89 – A change to subheading 9403.10 through 9403.89 from any other subheading outside that group, except from subheading 9401.10 through 9403.89, and except from subheading 9401.90 and 9403.90 when that change is pursuant to General Rule of Interpretation 2(a).
Since no processing other than packaging and marking are performed in Mexico, the requisite specific tariff classification rule, 19 C.F.R. § 102.11(a)(3), is not met.
Continuing to 19 CFR 102.11(b)(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. The single material that imparts the essential character to the playpens is the Chinese fabric, therefore the country of origin of the playpens is China.
We note that 19 C.F.R. 102.17(c) indicates that a foreign material shall not be considered to have undergone an applicable change in tariff classification specified in 102.20 or 102.21 or have met any other applicable requirements of those sections merely by reasons of one of the following:
c) simple packing, repacking or retail packaging without more than minor processing. As the operations performed in Mexico are not more than those indicated in 19 CFR 102.17(c), the Mexican processing does not change the country of origin of the playpens under 102 rules for marking purposes.
Based on the aforementioned analysis, the marking of the playpens as “Made in China,” as suggested by the requester, is correct.
CHINA SECTION 301:
When determining the country of origin for purposes of applying current trade remedies under Section 301, the substantial transformation analysis is applicable. The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character or use, different from that possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 69 C.C.P.A. 151 (1982). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). As the processing in Mexico does not result in a substantial transformation, the imported playpens remain products of China. Accordingly, the playpens are products of China, and the Section 301 measures will apply.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 9403.89.6003, 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., 9903.88.03, in addition to subheading 9403.89.6003, HTSUS, listed above.
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.
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 Seth Mazze at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division