CLA-2-70:OT:RR:NC:N1:126
Jorge A. Torres
Interlink Trade Services
6500 South 35th St.
McAllen, Texas 78503
RE: The tariff classification of a multiple-walled insulating unit of glass assembled in Mexico; United States Mexico Canada Agreement (USMCA) applicability; Country of Origin; and Marking
Dear Mr. Torres:
In your letter dated October 11, 2022, on behalf of your client, Western Reflections, LLC, you requested a tariff classification ruling, on a multiple-walled insulating unit of glass containing a leaded glass panel from China. You also requested a ruling on the status of this product under United States-Mexico-Canada Agreement (USMCA) as well as the correct country of origin for marking purposes.
The merchandise under consideration is a multi-walled insulating glass unit (“IGU”), SKU/Part Number 27127001, which is representative of several models that will be produced in Mexico. From the information provided, the IGU consists of the following components: Outer glass panels (2) of tempered glass from the United States (U.S.), inner leaded glass panel from China, Deco Seal from the U.S., Vinyl Barrier Tape from China, and “Made in Mexico” Label from the U.S.
You stated that the outer glass panels (the tempered sheets) which make up the insulating unit are produced in the United States from raw material of U.S. origin. The inner leaded glass panel within the unit is made in China from raw material of Chinese origin, the Deco Seal is produced in the U.S. from raw material of U.S. origin, the Vinyl Barrier Tape is made in China from raw material of Chinese origin, and the “Made in Mexico” Label is produced in Mexico from raw materials of Mexican origin. These components are combined in Mexico to make the complete product.
In Mexico the outer glass panels of U.S. origin are combined to form the insulating unit, and the inner leaded glass panel of Chinese origin is placed within the insulating unit. In addition to the outer glass panels of U.S. origin and the inner glass leaded panel of Chinese origin, when the complete insulating unit is formed in Mexico, the laborers use sealing material of U.S. origin, and Vinyl Barrier Tape of Chinese origin (which forms the frame for the insulating unit), and a “Made in Mexico” Label of U.S. origin.
The applicable tariff provision for the multiple-wall insulating unit of glass, SKU/Part Number 27127001, will be 7008.00.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Multiple-wall insulating units of glass”. The general rate of duty will be 3.9 percent ad valorem.
In your submission you inquire whether the IGU is eligible for preferential treatment under the USMCA.
From the information you provided, you indicate that the IGU, SKU/Part Number 27127001, will be manufactured and assembled with other components in Mexico to form a complete IGU prior to importation into the United States. The production process includes:
Leaded Glass Panel is cleaned
Tempered Glass Sheets are cleaned
Leaded Glass Panel is inspected for any defects
Leaded Glass Panel and Tempered Glass Sheets are transferred to insulation Chamber
Leaded Glass Panel is placed between the 2 Tempered Glass Sheets and Insulating Technology process is applied (Deco Seal)
Once the Insulating Technology process (Deco Seal) is applied, the Door Lite is introduced in the Bake Oven
After the Door Lite goes through the baking process, the Vinyl Barrier Tape is applied
8. The “Made in Mexico Label” is applied
The USMCA was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). General Note (“GN”) 11 of the HTSUS implements the USMCA. GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA. GN 11(b) states:
For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country, as defined in subdivision (l) of this note, is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a “good originating in the territory of a USMCA country” only if—
the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries;
the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials;
the good is a good produced entirely in the territory of one or more USMCA countries using non-originating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o);
The subject IGU contains non-originating materials and is not considered a good wholly obtained or produced entirely in a USMCA country under GN 11(b)(i). Moreover, under GN 11(b)(ii), the IGU is not a good produced entirely in Mexico exclusively from originating materials. Therefore, we must next determine whether the non-originating materials undergo the tariff shift and satisfy other applicable requirements provided for in GN 11(b)(iii) and GN 11(o).
The applicable tariff shift rule for merchandise classifiable under heading 7008.00, HTSUS, is in GN 11(o), HTSUS, which provides, in relevant part:
A change to headings 7003 through 7008 from any heading outside that group, except from heading 7009.
Since all the Chinese-origin parts (inner leaded glass panel, heading 7016, and Vinyl Barrier Tape, heading 3919) are classified outside of subheadings 7003 through 7008 HTSUS and not from heading 7009, HTSUS, the requisite tariff shift rule is met as a result of the processing done in Mexico. Thus, the finished IGU is considered an originating good under the USMCA and eligible for preferential treatment.
Regarding your question on the correct country of origin for marking purposes, please note the following.
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.” United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940).
Pursuant to section 102.0, interim regulations, related to the marking rules, tariff-rate quotas, and other USMCA provisions, published in the Federal Register on July 6, 2021 (86 FR 35566), the rules set forth in §§ 102.1 through 102.18 and 102.20 determine the country of origin for marking purposes with respect to goods imported 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 under 19 C.F.R. Section 102.11, establishes that: (a) The country of origin of a good is the country in which: (1) The good is wholly obtained or produced;
(2) The good is produced exclusively from domestic materials; or (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.
Sections 102.11(a)(1) and 102.11(a)(2) do not apply to the facts presented in this case because the IGU is neither wholly obtained nor produced exclusively from “domestic” (Mexico, in this case) materials. Accordingly, we look to section 102.11(a)(3). The applicable tariff shift requirement in section 102.20(o) for the IGU of subheading 7008.00, HTSUS, consists of the following:
A change to headings 7003 through 7008 from any heading outside that group, except from heading 7009.
As we have established earlier, the “foreign” components are classified outside of headings 7003 through 7008, HTSUS, and not from heading 7009, HTSUS. Therefore, the tariff shift is met and the country of origin of the IGU will be Mexico for marking purposes.
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 Elena Pietron at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division