Newly Released CBP HQ Rulings June 5-14
The Customs Rulings Online Search System (CROSS) was updated June 5-14 with the following headquarters rulings (ruling revocations and modifications will be detailed elsewhere in a separate article as they are announced in the Customs Bulletin):
H330091: Application for Further Review of Protest No. 2704-23-164303; Classification of Adjustable Baby Seats; Applicability of Section 301 Trade Remedy
| Ruling: The subject adjustable baby seats are classified in subheading 9401.80.4046, which provides for “Seats (other than those of heading 9402), whether or not convertible into beds, and parts thereof: Other seats: Of rubber or plastics: Other: Other.” The 2021 general column one rate of duty for subheading 9401.80.4046 is free. According to Section XXII, Chapter 99, Subchapter III U.S. Note 20(g)(8), products of China are subject to the additional 25% ad valorem rate of duty. |
| Issue: Whether the subject seats are properly described by statistical reporting number 9401.80.4001 as "children’s highchairs and booster seats," or by statistical reporting number 9401.80.4046 as "other" seats. |
| Item: Three models of adjustable seats for babies of four to 12 months of age. All three models are composed of a plastic structure with a U-shaped stability base, two arms that connect the base to the seat structure, and lockable hinges connecting the arms to the base and the arms to the seat that allow for the seat to be adjusted by raising or lowering the seat in relation to the base by tilting the arms. The plastic seat structure is covered in a padded textile seat foundation that has two holes to accommodate a baby’s legs and a built-in three-point safety restraint harness. |
| Reason: The defining characteristic of a highchair is the height to which it can raise a child to a height that adults find useful, typically the height of a table or kitchen counter, for activities or eating with normal sized adults. The adjustable baby seats at issue here can raise a child 12” off the ground. As such, the adjustable baby seats are not highchairs. The adjustable baby seats are designed to secure a child into a seat and raise them to a higher position, however, they are not designed to be placed on or securely attached to another larger seat. As such, the adjustable baby seats are not booster seats |
| Ruling Date: April 15, 2024 |
H328467: Affirmation of NY N304760; tariff classification of decorative wooden sign from China
| Ruling: The decorative wooden sign from China is currently classified under subheading 4420.19.00, which provides for “Wood marquetry and inlaid wood; caskets and cases for jewelry or cutlery and similar articles, of wood; statuettes and other ornaments, of wood; wooden articles of furniture not falling within chapter 94: Statuettes and other ornaments: Other.” The current column 1 general duty rate is 3.2%. |
| Issue: In NY N304760, CBP classified a decorative wooden sign from China in heading 4420, which provides for “Wood marquetry and inlaid wood; caskets and cases for jewelry or cutlery and similar articles, of wood; statuettes and other ornaments, of wood; wooden articles of furniture not falling within chapter 94.” |
| Item: A decorative sign consisting of a wooden frame around a visible lattice backing and a central wood plaque. The plaque is painted with the word “Believe” below a simple scene of a rustic red barn and evergreen trees. A small spray of pine needles is mounted at the top of the frame. A rope is attached for hanging. The article will only be sold during the Christmas season and that the article “is adorned with artificial pine needle leaves and Holly Berries.” |
| Reason: The word “Believe,” the rustic barn scene, and the artificial pine needles and red berries are not closely associated with Christmas. The word “believe” itself is not closely associated with Christmas. The rustic scene with the barn and evergreen trees appears and is depicted regularly outside the festival of Christmas. At best the scene is associated with winter, due to the evergreen trees and white background, which is evocative of snow. The pine needles and red berries are not closely associated with Christmas. Pine needles are evocative of the winter or fall seasons. Holly berries are associated closely with Christmas; however, the red berries are not accompanied by holly leaves. Without holly leaves, holly berries are indistinguishable from other red berries. Finally, when viewed as a whole, all of the details do not coalesce to closely associate the article with the festival of Christmas rather than the winter season. This article fails the first of the Midwest factors. This article also fails the second Midwest factor and the Park B. Smith test, because displaying this article outside of the Christmas festival would not be aberrant. |
| Ruling Date: June 13, 2019 |
H301778: Restrictions on Disposition or Use; Price Actually Paid or Payable; Dutiability of Service Fees; Related Party Transactions
| Ruling: (1) The imported goods aren't subject to restrictions on disposition or use that preclude the use of the transaction value method. (2) The fees associated with the with retail operations in the U.S. aren't part of the price actually paid or payable for the imported goods. (3) The related-party price is acceptable as transaction value for the imported goods. |
| Issue; (1) Whether the imported goods are subject to restrictions on disposition or use that precludes the use of the transaction value method; (2) whether certain service fees associated with retail operations in the U.S. are part of the price actually paid or payable for the imported goods; and (3) whether the related-price price is acceptable as transaction value for the imported goods. |
| Item: The Seller is a parent company located in Europe. The Seller globally promotes and sells brand-name merchandise for which it owns all the intellectual property, brand names, and trade names. The merchandise includes luxury goods such as large and small leather goods, shoes, apparel, watches, jewelry, fashion accessories, and books. The Seller designs and develops the merchandise, oversees its production by both related and unrelated manufacturers located abroad and in the United States, and purchases the finished products from the manufacturers. The Importer is a subsidiary of the Seller based in the United States. The Importer acts as a corporate wholesaler that sells all its inventory to two U.S. “Retail Groups” that are also wholly owned by the Seller. In addition to the imported goods at issue in this case, the Importer also purchases U.S.-made goods that it sells to the Retail Groups. The Seller provides “retrieval dates” for its products, which the importer characterized as “recommendations” about when certain products should be removed from the shelves in retail stores. The importer provided a non-exhaustive table of 186 products that continued to be sold in the U.S. after the retrieval date specified by the seller in 2017. In addition to merchandise, the Seller bills the Importer fees that relate to retail services provided to the two U.S. Retail Groups, including merchandising, advertising, sales and marketing, supply chain and logistics, information systems, human resources, financial assistance, and administrative and risk management services. |
| Reason: (1) Here, even assuming that a “restriction on disposition or use” could be inferred from a business practice, rather than imposed by the seller in a binding legal agreement, the practice of retail groups returning all unsold merchandise to the Importer, with a small percentage sold to employees via staff sale, is “usual in the trade concerned” -- namely, the luxury fashion market. |
| Reason: (2) While the seller provides numerous services to the Retail Groups in order to enhance their operations in the U.S., none of these services relate to the production of any merchandise. Instead, the fees are paid to assist the Retail Groups in their efforts to resell goods -- both imported and domestically produced -- in the United States. The fees become payable not when goods are purchased or imported, but when the Seller provides the agreed-upon services in the United States. Therefore, the fees do not “proximately result in” importation, nor are they “connected in some way to importation.” The fees remain payable even if no goods are purchased or imported. |
| Reason: (3) The sales price will not be considered influenced by the relationship for purposes of the circumstances of the sale test, based on the totality of the information considered and CBP's review and examination of all relevant aspects of the transaction, including the way in which the Importer and the Seller organize their commercial relations and the way in which the price in question was arrived at. |
| Ruling Date: June 4, 2024 |
H333673: Application for Further Review of Protest No. 3901-23-129760; Classification of a Rain-Light-Solar-Humidity Sensor from China
| Ruling: The subject rain-light-solar-humidity sensor is classified under heading 8543, specifically subheading 8543.70.98, HTSUS, which provides for, “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus: Other: Other: Other.” The general column one rate of duty is 2.9 percent ad valorem. |
| Issue: Whether the subject RLSH sensor is described in statistical reporting number 8543.70.9860 as an “apparatus using passive infrared detection sensors designed for turning lights on and off." Whether the sensor qualifies for a Section 301 exclusion for apparatus using passive infrared detection sensors designed for turning lights on and off. |
| Item: A rain-light-solar-humidity (RLSH) sensor from China. It is a device that mounts behind the windshield of a motor vehicle. The RLSH sensor houses four ancillary sensors which are each designed to detect certain environmental conditions surrounding the vehicle and individually control specific vehicle functions. The first ancillary sensor is a rain sensor for automatic windshield wiper control. The second and third ancillary sensors are light sensors: one ambient light sensor and one front light sensor. Together, the light sensors detect the brightness of the surrounding environment and, in response, automatically control the vehicle’s low beams and instrument lighting. The fourth ancillary sensor is a solar sensor that measures solar radiation for automatically adjusting the vehicle’s air conditioning system. The RLSH sensor can also support an ancillary humidity sensor and heads-up display. |
| Reason: There is no dispute that the subject merchandise constitutes an “electrical machine” of Chapter 85. Importantly, the subject merchandise exhibits “individual functions." First, the RLSH sensor cannot engage the windshield wipers or control a vehicle’s air conditioning system unless it is “incorporated in a more complex entity,” specifically a vehicle and its electrical system. Second, the automatic control of the windshield wipers and the control of the air conditioning system are functions that are distinct from the functions performed by the vehicle and its electronic system. The wiper control, lighting, and air conditioning functions play no part in the functioning of the larger “entity” -- the vehicle itself; the RLSH sensor does not interact with the powertrain. Third, the RLSH sensor’s functions do not play an integral and inseparable part in the operation of the vehicle. “The highest priority for switching on” each of the RLSH sensor’s respective functions “belongs to the corresponding operating switch,” indicating that the vehicle can operate entirely without the ancillary sensors. Taking these factors into consideration, The subject merchandise constitutes an “electrical machine having individual functions.” Because no other more specific heading or subheading exists, the RLSH sensor is classifiable under subheading 8543.70.98. However, it fails to qualify for a Section 301 exclusion because the subject RLSH sensor exhibits multiple functions beyond the use of passive infrared detection sensors to turn lights on and off. |
| Ruling Date: May 14, 2024 |
H338482: U.S. Government Procurement; Title III, Trade Agreements Act of 1979 (19 U.S.C. 2511); Subpart B, Part 177, CBP Regulations; Country of Origin of Upholstered Wood Chairs
| Ruling: The components imported into the United States undergo a substantial transformation when made into the subject upholstered wood chairs. |
| Issue: Whether the imported components are substantially transformed when assembled into the upholstered wood chairs in the U.S. |
| Item: A solid wood upholstered chair. The components in a kit from China consist of the left seat rail, right seat rail, left leg, right leg, front crossbar, back crossbar, bottom crossbar, 60mm bolts with Loctite, 40mm bolts with Loctite, 35mm bolts with Loctite, and 10mm x 40mm large wooden dowels. The U.S.-origin fabric, dust covers, and welt cord are cut to size and combined with the U.S.-origin foam to form the seat and the seat back. |
| Reason: When the foreign components are integrated with the U.S. components, they lose their individual identities and become an integral part of a new article, the upholstered wood chair, possessing a new name, character and use. The last substantial transformation occurs in the U.S. |
| Ruling Date: May 29, 2024 |
H335007: 19 U.S.C. § 1466; Vessel Repair; Installation of Liquefied Natural Gas fuel system; [ ]
| Ruling: The proposed shipyard work constitutes non-dutiable modifications to the propulsion system of the vessel. |
| Issue: Whether or not the work constitutes dutiable foreign repairs or modifications to the Vessel under 19 U.S.C. § 1466. |
| Item: Proposed modifications to a U.S.-flagged, coastwise-qualified vessel to add a Liquified Natural Gas (“LNG”) fuel burning capability to the Vessel’s propulsion system. |
| Reason: See ruling. |
| Ruling Date: April 29, 2024 |
H338116: U.S. Government Procurement; Title III, Trade Agreements Act of 1979 (19 U.S.C. 2511); Subpart B, Part 177, CBP Regulations; Country of Origin of Global Navigation Satellite System R12i Receivers; Country of Origin Marking 134.32(d); 19 CFR 134.32(m)
| Ruling: For the purposes of U.S. Government procurement and country of origin marking, the GNSS R12i Receiver is a product of the U.S. and is not substantially transformed by its final assembly in Thailand. Furthermore, as a product of the U.S., it is excepted from the country of origin marking requirement when exported and returned to the United States, under 19 CFR 134.32(m). |
| Issue: What is the country of origin of the GNSS R12i Receiver for the purposes of U.S. Government procurement? Is the GNSS R12i Receiver excepted from country of origin marking requirements under 19 CFR 134.32(m)? |
| Item: The Global Navigation Satellite System (GNSS) R12i Receiver, designed for “surveying and mapping in challenging environments.” The receiver consists of seven primary components, which undergo final assembly into a chassis in Thailand. The main board assembly, the power supply and communications board assembly, the antenna element assembly, and the radio interface are manufactured in the U.S. Two of the main components, the antenna low noise amplifier and battery SIM, are produced in Thailand. The radio is made in China. |
| Reason: The U.S.-origin primary PCBA contains the “essential character” of the GNSS R12i Receiver. The PCBA originates from the U.S., where most of the required production took place. This production process included assembling hundreds of electronic components onto the PCBA using SMT, including the CPU, RAM, GPS components, and communications components, which are central to the device’s operation. Furthermore, it involved programming and configuring the primary PCBA with Trimble’s proprietary U.S.-origin software, which is required in order for the device to function and defines its use. The assembly in Thailand is simple assembly that doesn't result in a substantial transformation. |
| Ruling Date: June 4, 2024 |