CLA-2-94:OT:RR:NC:N4:433
Joshua Beker
Roberts & Kehagiaras LLP
2339 Commerce Street
Houston, TX 77003
RE: The country of origin and the applicability of Section 301 trade remedy of swivel seats.
Dear Mr. Beker:
In your letter dated June 7, 2022, you requested a binding country of origin ruling on behalf of Arozzi Gaming Distribution, Inc. In lieu of samples, illustrative literature, product descriptions, and manufacturing processes were provided.
The items subject of this ruling request are constructed of foreign and domestically sourced raw materials. Descriptions of the items immediately follows.
Item 1, identified as the “Milano Gaming Chairs,” are a series of manual gas lift, variable height adjustment, tilting and locking ergonomic swivel seats constructed of wooden frames with swivel mechanisms, and each having five wheeled casters. The upholstered backrests and seat foundations are constructed of polyvinyl chloride (PVC) leather over high-density memory foam cushions.
Padded armrests constructed of plastic are affixed to the wooden frame. Seating is provided for a single individual. The dimensions approximate 14.6” in width, 21” in depth, and 51.6” in height of which 17.7” - 21.7” exists from the floor to the seat foundation. The seats will be manufactured in a variety of colors, packaged unassembled for retail sale, and will contain all hardware required for assembly.
Item 2, identified as the “Vernazza Gaming Chairs,” are a series of manual gas lift, variable height adjustment, tilting and locking ergonomic swivel seats constructed of metal frames with swivel mechanisms, and each having five wheeled casters. The upholstered backrests and seat foundations are constructed of polyvinyl chloride (PVC) leather over high-density memory foam cushions. Padded armrests constructed of metal encased over plastic are affixed to the metal frame. Seating is provided for a single individual. The dimensions approximate 12.2” in width, 20.5” in depth, and 55.2” in height of which 18.5” - 21.3” exists from the floor to the seat foundation. The seats will be manufactured in a variety of colors, packaged unassembled for retail sale, and will contain all hardware required for assembly.
The applicable subheading for item 1 will be 9401.31.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Seats (other than those of heading 9402), whether or not convertible into beds, and parts thereof: Swivel seats with variable height adjustment: Of wood.” The rate of duty will be free.
The applicable subheading for item 2 will be 9401.39.0010, HTSUS, which provides for “Seats (other than those of heading 9402), whether or not convertible into beds, and parts thereof: Swivel seats with variable height adjustment: Other: Other household.” The rate of duty will be free.
Per your submission, the Milano (wooden frame) seat components and the Vernazza (metal frame) seat components are sourced from multiple countries with operations occurring in Sweden. You request an origin determination of Sweden.
Sourcing Scenario:
The prefabricated foreign origin components for the Milano (wood frame) seats includes: the backrest covers, backrest foams, wooden backrests, seat covers, seat foam, wooden seat foundations, wheelbases, arm rests, plastic covers, stickers, gas lift cylinders, and the seat lift mechanisms. The prefabricated foreign origin components for the Vernazza (metal frame) seats includes: the backrest covers, the backrest foams, metal backrest frames, support straps, seat covers, seat foams, metal seat foundations, wheelbases, arm rests, plastic covers, recline mechanisms, stickers, gas lift cylinders, and the seat lift mechanisms. Prior to importation into Sweden, documentation provided for the Milano and the Vernazza seats states 1.) the wooden seat foundations and the wooden seat backrests have been cut to shape; 2.) the metal frame seat foundations and the metal frame seat backrests have been fabricated and cut to shape; 3.) the seat foundations and the seat backrests foams have been molded to shape; 4) the fabric components have been roughly cut to shape.
The Swedish domestic materials include: the packing materials, retail cartons, printed assembly guides, cardboard corner supports, tape and stickers, glue, mounting screws/washers, rivets and metal loops.
Country of Origin:
Section 134.1(b), Customs Regulations (19 C.F.R. § 134.1(b)) defines “country of origin” 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.” A substantial transformation occurs when articles lose their identity and become articles having a new name, character, or use. No one factor is decisive.
In Sweden, a general assembly workflow for the Milano (wooden frame) seats and the Vernazza (metal frame) seats involves the use of hand tools, power tools, glue, and staples. The molded foam is trimmed, sewn, stapled, and mounted to the seat foundations and the seat backrests. Padding is added to the head cushion and lumbar cushion components. The armrests are mounted with cushions. The seat lift mechanisms are cleaned, lubricated, and mounted. The unassembled seats are inspected and packaged for export to the United States.
A predominant number of the foreign origin structural seat components are engineered, molded, cast, and manufactured to shape with a pre-determined end use prior to importation into Sweden. The post-importation processing consisting primarily of assembly operations do not change the basic nature of the articles; it represents different stages of the same products. Based on the documentation provided, in Sweden 1.) the Milano (wooden frame) seat components and the Vernazza (metal frame) seat components do not undergo a physical change such as sand blasting, grinding, polishing, coating with anti-rust agents, heat treatment, die-cutting, bending, painting, powder coating, welding, or electro-plating; 2.) the seat components do not undergo soldering, fusing, machining, knurling, or crimping. Prior to Swedish importation, the foreign unassembled seat components are clearly dedicated for use in making the swivel seats and cannot be used for any other purpose. In the instant case, the Chinese origin seat components comprise the indispensable attribute that strongly marks or serves to distinguish the structure, core or condition of the assembled articles. In view of these facts, the country of origin for the Milano (wooden frame) seats and the Vernazza (metal frame) seats is China.
Section 301 Trade Remedy:
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 9401.31.0000 and 9401.39.0010, 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 9401.31.0000 and 9401.39.0010, 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.
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 the World Wide Web at https://hts.usitc.gov/current.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. § 177).
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 19 C.F.R. § 177.9(b)(1). In the event that the facts or merchandise are modified in any way, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and you should resubmit for a new ruling in accordance with 19 C.F.R. § 177.2.
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 Dharmendra Lilia at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division