CLA-2-85:OT:RR:NC:N2:209
Chris Tovar
Consulting by Sandra Tovar, Inc., DBA CST Inc.
500 Westpark Dr. Peachtree City, GA 30269
RE: The tariff classification, country of origin and status under the United States-Australia Free Trade Agreement (UAFTA) of solar panels from Australia.
Dear Mr. Tovar:
In your letter dated August 26, 2024, you requested a ruling on the classification, origin and status of solar panels from Australia under the UAFTA, on behalf of your client, Tindo Operations Co Pty Ltd.
The items concerned are solar panels, part numbers Walara-425-54G3P, Walara-430-54G3P, Walara-570-72G3P, Walara-575-72G3P. The solar panels are made from mono crystallinesolar cells manufactured within China and various other components of various countries of origin. The components are imported into Australia by Tindo Operations Co Pty Ltd. for further manufacturing and assembly into the final solar panel. The modules in question are primarily designed for connection in strings to grid-tie inverters or to microinverters for residential or small commercial applications.
The manufacturing steps undertaken within Australia include the following:
Cell Cutting
Stringing the Cells
Glass, Front Encapsulant and Layup
Busbar Soldering
QA Checks and Bar Coding
Cell Taping, Back POE, Backsheet Layup
EL Testing
Lamination
Edge Trimming
Visual inspection and cleaning
Framing
Junction Box Soldering
Junction Box Potting and Curing
Junction Box finishing, flash testing and Pelletizing
A complete explanation of the manufacturing steps undertaken in Australia was provided with the request.
The applicable tariff provision for each of the solar panels in question (Walara-425-54G3P, Walara-430-54G3P, Walara-570-72G3P, and Walara-575-72G3P) will be 8541.43.0010, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Semiconductor devices (for example, diodes, transistors, semiconductor-based transducers); photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels;: Photosensitive semiconductor devices, including photovoltaic cells whether or not assembled in modules or made up into panels; light-emitting diodes (LED): Photovoltaic cells assembled in modules or made up into panels: Crystalline silicon photovoltaic cells of a kind described in statistical note 10 to this chapter. The general rate of duty is Free.
Effective January 23, 2018, Presidential Proclamation 9693 imposed safeguard measures on imports of crystalline silicon photovoltaic (CSPV) cells and certain products incorporating CSPV cells in the form of additional tariffs or tariff rate quotas for a period of three years. The safeguard measures were subsequently extended by Presidential Proclamation 10339, dated February 4, 2022, for an additional four years. As a result, products classified under subheading 8541.43, HTSUS, unless specifically excluded, are subject to the additional duties. See Note 18 to Chapter 99 and subheadings 9903.45.21 through 9903.45.27, HTSUS.
Regarding the United States-Australia Free Trade Agreement (UAFTA) eligibility:
General Note 28(b), HTSUS, sets forth the criteria for determining whether a good is originating under the UAFTA. General Note 28(b), HTSUS, (19 U.S.C. 1202) states, in pertinent part, that
For the purposes of this note, subject to the provisions of subdivisions (c), (d), (m) and (n) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good of a UAFTA country under the terms of this note only if -
(i) the good is a good wholly obtained or produced entirely in the territory of Australia or of the United States, or both;
(ii) the good was produced entirely in the territory of Australia or of the United States, or both, and-
(A) each of the non-originating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (n) of this note;
(B) the good otherwise satisfies any applicable regional value content requirement referred to in subdivision (n) of this note; or
(C) the good meets any other requirements specified in subdivision (n) of this note;
and such good satisfies all other applicable requirements of this note;
(iii) the good was produced entirely in the territory of Australia or of the United States, or both, exclusively from materials described in subdivision (b)(i) or (b)(ii) of this note; or
(iv) the good otherwise qualifies as an originating good under this note,
and is imported directly into the customs territory of the United States from the territory of Australia.
As the solar panels incorporate non-originating goods/materials, they would have to undergo an applicable change in tariff classification in order to meet the requirements of GN 28(b)(ii). We must refer to GN 28(n) for the specific classification change required. Goods classified in subheading 8541.43.0010, HTSUS, require: A change to assembled semiconductor devices, integrated circuits or microassemblies of subheading 8541.10 through 8542.90 from unmounted chips, wafers or dice of subheading 8541.10 through 8542.90 or from any other subheading.
Based on the facts provided, the goods described above qualify for UAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 28(b)(ii)(A). All non-originating goods/materials undergo the required tariff shift. The solar panels are therefore eligible for preferential treatment under the UAFTA, upon compliance with all applicable laws, regulations, and agreements.
Regarding the Country of origin:
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).
The solar panels in question are manufactured in Australia from solar cells of Chinese origin. The character of this product is imparted by the Chinese solar cells which would be considered the dominant components of this assembly. The Chinese solar cells have a pre-determined end use when exported from China.The assembly/manufacturing process that takes place in Australia does not change the end use of the solar cells. The solar cells do not under go a substantial transformation as a result of the Australian processing. Therefore, since a substantial transformation does not occur as a result of the Australian processing, the country of origin for marking purposes would be China upon importation into the United States. The solar panel assembly should be legibly, conspicuously, and permanently marked in accordance with the requirements of 19 U.S.C. 1304 to indicate that its country of origin is China.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8541.43.0010, 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., 9903.88.02, in addition to subheading 8541.43.0010, 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 Section 301 trade remedy, 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
https://www.cbp.gov/trade/remedies/301-certain-products-china
Additionally, the merchandise in question may be subject to antidumping duties and countervailing duties (AD/CVD). Written decisions regarding the scope of AD/CVD orders are issued by the Enforcement and Compliance office in the International Trade Administration of the Department of Commerce (ITA) and are separate from tariff classification and origin rulings issued by Customs and Border Protection (CBP). General information regarding the ITA and AD/CVD can be found at https://www.trade.gov/us-antidumping-and-countervailing-duties. The ITA's Guide on How to File for an Antidumping/Countervailing Duty Scope Ruling Request is available at https://enforcement.trade.gov/scope/Request-Scope-Ruling.pdf
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 at https://hts.usitc.gov/current.
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. Additionally, we note 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 and Border Protection 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, please contact National Import Specialist Steven Pollichino at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division