CLA-2-76:OT:RR:NC:N5:116
Mr. Tiago Lopes
ShadeFX Canopies Inc.
8-2340 Meadowvale Blvd.
Mississauga, Ontario L5N 0H1
Canada
RE: The tariff classification, country of origin for marking purposes, and status under the United States-Mexico-Canada Trade Agreement (USMCA) of a freestanding retractable canopy
Dear Mr. Lopes:
In your letter dated April 4, 2024, you requested a tariff classification and a country of origin ruling for marking purposes for a freestanding retractable canopy. Also, you inquire whether the retractable canopy is eligible for duty free treatment under the United States-Mexico-Canada (USMCA) Trade Agreement.
The product under consideration is identified as the ShadeFX Freestanding Retractable Canopy which is available in ten different sizes. This outdoor manually operated retractable canopy is designed to provide shade and is permanently attached to a patio, porch or deck. Based on the information provided, this canopy is mainly comprised of a retractable fabric canopy, two post legs, two post arms, post skirts, two bases, two base covers, a TSB (track supporting beam), a drive beam (track), wings, and flat stock that are all made from aluminum, a flat gimp made of plastic, a manually operated handle, and hardware to mount the canopy to concrete or wood. The components that make up the canopy are sourced from various countries including the United States (U.S.), Turkey, Canada, China, Germany, Taiwan, etc. You indicate that the canopy is ready to use in its condition as imported and just requires assembly.
According to your submission, fabric of U.S. origin is exported to Canada where it is cut, sewn, and attached to a two-legged structure. The posts, drive track, flat stock, and wings are produced from aluminum billets of Turkish origin that are shipped to and extruded in Canada. Other manufacturing operations performed on the aluminum components in Canada include cutting, tapping holes, welding (base plates to posts), painting, etc. After the work is completed in Canada, the canopy is packaged and then shipped to the U.S.
You suggested that the ShadeFX Freestanding Retractable Canopy should be classified under 6306.22, Harmonized Tariff Schedule of the United States, (HTSUS), which provides for Tarpaulins, awnings and sunblinds; tents (including temporary canopies and similar articles); sails for boats, sailboards or landcraft; camping goods: Tents: Of synthetic fibers. We disagree. The item is a freestanding aluminum structure with a retractable textile canopy that does not have any walls, necessary to permit the formation of an enclosure or shelter, provide protection from the elements, and is meant to be permanently affixed to concrete or a wooden foundation. Therefore, the item will not be considered a tent under subheading 6306.22, HTSUS.
The Explanatory Notes (ENs) to heading 73.08, HTSUS, covers complete or incomplete metal structures as well as parts of structures. EN 76.10 states that EN 73.08 applies, mutatis mutandis, to heading 7610, HTSUS. This office finds that the subject canopy is a permanent structure characterized by the fact that once it is put in position, it generally remains in that position or is expected to remain so configured for extended periods of time as required for classification in heading 7308, HTSUS, (7610 in this case) in Target Stores v. United States, Court No. 06-00444 (Slip Op. 12-41, March 22, 2012). For classification purposes, the retractable canopy is a composite good of which the essential character is imparted by the aluminum structure and will be classified as such in accordance with General Rule of Interpretation (GRI) 3(b).
The applicable subheading for the ShadeFX Freestanding Retractable Canopy will be 7610.90.0080, HTSUS, which provides for aluminum structures (excluding prefabricated buildings of heading 9406) and parts of structures (for example, bridges and bridge-sections, towers, lattice masts, roofs, roofing frameworks, doors and windows and their frames and thresholds for doors, balustrades, pillars and columns); aluminum plates, rods, profiles, tubes and the like, prepared for use in structures: other: other: other. The rate of duty will be 5.7 percent ad valorem.
USMCA
You inquire whether the retractable canopy is eligible for preferential treatment under the USMCA. 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, 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, in relevant part:
For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country 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
(i) the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries;
(ii) the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials;
(iii) 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 retractable canopy is comprised of non-originating materials from multiple countries. Therefore, the canopy is not considered a good wholly obtained or produced entirely in a USMCA country under GN 11(b)(i) and (ii). We must next determine whether the canopy qualifies under GN 11(b)(iii). The imported canopy is classified in heading 7610, HTSUS. The applicable rule of origin for merchandise classified in heading 7610, HTSUS, is in GN 11(o), HTSUS, which provides, in relevant part:
Chapter 76 (9) A change to headings 7610 through 7613 from any other heading, including another heading within that group.
Aluminum billets along with other components (i.e., canopy, manual handle, etc.) are sent to Canada where they are manufactured into the retractable canopy. In order to satisfy the rule of origin in GN 11(o), all the non-originating materials/components must meet the tariff shift requirements. This office finds that all the non-originating materials/components (i.e., canopy, aluminum billets, manual handle, etc.) meet the required tariff shift. Since all the non-originating components meet the requisite tariff shift, the retractable canopy is considered an originating good and therefore, is eligible for preferential treatment under the USMCA.
Country of Origin
In addition to USMCA eligibility, you are requesting a country of origin determination for the subject retractable canopy for marking purposes. 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 or USMCA country, the marking rules set forth in part 102 of this chapter (hereinafter referred to as the part 102 Rules) will determine the country of origin.
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. 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 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 the cases described above because the imported canopy is neither wholly obtained or produced or 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). Pursuant to 19 C.F.R. 102.11(a)(3), the country of origin of a good is the country in which each foreign material incorporated in that good undergoes an applicable change in tariff classification as set forth in 19 C.F.R. 102.20 and satisfies any other applicable requirements of that section.
Based on the facts presented, because the retractable canopy imported into the U.S. from Canada is classified in heading 7610, HTSUS, the change in tariff classification must be made in accordance with section 102.20(n), Section XV: Chapters 72 through 83, heading 7606 - 7615, HTSUS, which requires A change to heading 7606 through 7615 from any other heading, including another heading within that group.
In order to satisfy the rule of origin in section 102.20(n), all the non-originating materials/components must meet the tariff shift requirements. Based on the information provided, we find that the aluminum billets, canopy, manual handle, and all other non-originating components/materials meet the tariff shift requirement in the rule of origin cited above. Since all the non-originating components meet the requisite tariff shift, the country of origin for marking purposes is Canada.
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 Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. You should also be aware that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
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 Angelia Amerson at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division