OT:RR:NC:N2:220
Emily Wang
Protop International Inc.
10F-8, No. 237, Sec.1, Ta-tong Road
Xizhi District, New Taipei City, 22161
Taiwan
RE: The country of origin, marking, and applicability of Section 301 remedies of a Car Charger set
Dear Ms. Wang:
In your letter dated September 7, 2021 you requested a country of origin ruling.
The merchandise under consideration is identified as the 45W Car Charger Set (Car Charger Set) which consists of a retail package containing a 5 A universal car power adapter with a single USB female Type-C connector on one side and 12V vehicle electrical plug on the other; and a 6-foot insulated electric cable that has a male USB Type-C connector on one end and a C94 connector on the other end. The Car Charger Set is imported in a retail package with a 6-foot electric cable and is used to charge various electronic devices inside a vehicle.
In your submission, you state the car power adapter plug is made of materials that are sourced from China, the United States, and Vietnam. The assembly process begins with the manufacturing of a printed circuit board assembly (PCBA) that occurs in Vietnam by soldering multiple components, such as resistors, capacitors, integrated circuits, fuses, diodes, and an LED onto a bare printed circuit board. The female USB connector and anode head are then glued onto the case assembly along with the PCBA, which is then encapsulated in a plastic housing by means of ultrasonic welding. Throughout the assembly process, the testing and quality control procedures are conducted at various stages, on the parts, as well as the finished product. Lastly, the adapter plug is retail packaged with a 6-foot electrical cable of Chinese origin.
General Rule of Interpretation (GRI) 1, Harmonized Tariff Schedule of the United States (HTSUS), states in part that for legal purposes, classification shall be determined according to the terms of the headings, any relative section or chapter notes and, unless otherwise required, according to the remaining GRI’s taken in order. Goods that are, prima facie, classifiable under two or more headings, are classifiable in accordance with GRI 3.
GRI 3(a) states that the heading that provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings refer to only part of the items in a composite good or set, those headings are to be regarded as equally specific in relation to the goods, even if one of them gives a more complete or precise description of the good. As such, they are regarded as equally specific and classification of the composite good or set is to be determined by GRI 3(b) of GRI 3 (c) taken in the appropriate order in which they are set out in GRI 3. GRI 3(b) states in part that composite goods or sets, which cannot be classified by reference to GRI 3(a), are to be classified as if they consisted of the component that gives them their essential character.
The Explanatory Notes to the Harmonized Tariff System, although not legally binding, provide guidance in the interpretation of the Harmonized Commodity Description and Coding System at the international level. Explanatory Note X to GRI 3(b) provides that the term “goods put up for retail sale” means goods that: (a) consist at least two different articles which are, prima facie, classifiable in different headings; (b) consist of articles put up together to meet a particular need or carry out a specific activity; and (c) are put up in a manner suitable for sale directly to users without re-packing. Goods classifiable under GRI 3(b) are classifiable as if they consisted of the material or component which gives them their essential character, which may 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 article.
The Car Charger Set consists of two or more articles that are, prima facie, classifiable in different headings. This set also consists of articles put up together to carry out a specific activity (i.e., conversion of vehicle power to USB 5V standard). Finally, the articles are put up in a manner suitable for sale directly to users without repacking. Therefore, the Car Charger Set is described within the meaning of “goods put up for retail sale.”
In accordance with GRI 3(b), which states in part that goods put up in sets for retail sale, that cannot be classified by reference to GRI 3(a), are to be classified as if they consisted of the component which gives them their essential character. In our opinion, the article that provides the essence of the Car Charger Set is the plug-in adapter that rectifies the electricity and provides the USB connection.
With regard to the origin of the Car Charger Set, 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”.
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). Concerning the country of origin of the Car Charger Set, in our view the assembly of the PCBA in Vietnam by soldering the individual components onto the bare board results in a substantial transformation of the components to produce a PCBA of Vietnamese origin. Furthermore, it is the opinion of this office that the PCBA provides the essence of the electrical charging device because it is the article within the assembly that converts the electricity and supplies it to the attached personal electronics via the USB socket. As such, we find that the components that make up the power adapter are transformed into a new article of commerce with a different name, character, and use, and the adaptor is considered a product of Vietnam for origin and marking purposes at the time of importation into the United States.
However, the Chinese USB cable is merely packaged with the adapter in a retail carton. As such, we would note that Treasury Decision (T.D.) 91-7, published in Volume 25, Customs Bulletin and Decisions, at 6 (January 16, 1991), addressed, among other things, the application of country of origin marking requirements to sets. It states therein, at 16:
. . . in most cases, the mere inclusion of an item in a collection will not substantially transform it into an article with a new name, character or use and, therefore, each item must be separately marked with its own country of origin. (Where the marking of the container will reasonably indicate the country of origin to the ultimate purchaser, the container may be marked instead of the individual articles. See 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d)). This result is consistent with the purpose of the marking statute since the ultimate purchaser’s decision as to whether to buy the set might be influenced by the country of origin of any of the items in the set, whether or not an item gives the set its essential character.
In considering T.D. 91-7, we find that the Chinese origin USB cable included in the set is not substantially transformed as a result of packaging with the Vietnamese adapter plug, and the individual components and the origin of all items within the set must be identified. Consequently, each article in the set must be individually marked with their country of origin, provided such marking is visible through the retail packaging, or the packaging must identify the origin of each of these items.
Regarding Section 301 remedies applicable to products of China, certain guidance pertaining to sets packaged for retail sale is provided on the CBP website under “CBP Section 301 Trade Remedies Frequently Asked Questions”. The answer to “How are the Section 301 duties assessed in respect to sets packaged for retail sale, which contain components covered by the Section 301 remedy,” reads, in pertinent part, as follows:
When importing goods put up in sets for retail sale (in accordance with General Rule of Interpretation 3) that contain articles subject to the Section 301 remedy, if the product that imparts the essential character to the set (i.e. the HTSUS provision under which the entire set is classified) is covered by the Section 301 remedy, then the entire set will be subject to the additional 25% duties.
It is the opinion of this office that the Vietnamese origin adapter imparts the essential character of the set, and the 45W Car Charger Set is not subject to the additional duties applicable to products of China under Section 301 of the Trade Act of 1974, as amended, upon importation into the United States.
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.”
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