Newly Released CBP HQ Rulings for July 2

July 8, 2021 |Customs Rulings

The Customs Rulings Online Search System (CROSS) was updated July 2 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):

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H318453: Request for a determination of the right to act as importer of record by Quality Brand Imports, Inc.

Ruling: The selling agent has a sufficient financial interest in the imported wine to act as importer of record.

Issue: Whether a selling agent has sufficient financial interest in the goods, to act as importer of record. The selling agent acts as an intermediary between European Wineries and licensed U.S. wine wholesalers. The selling agent will not act as a buyer, or take ownership of the goods, but only facilitate the import and sale of the wine. The selling agent enters into sale/purchasing agreements with wineries and wholesalers and receives a financial benefit for these services. The wineries decide all aspects of the products specifications, label, design, pricing, terms of sale, and mode of transportation. The winery will agree to pay: a flat fee per bottle imported; a flat fee per bottle for customs clearance and entry services provided by the licensed broker; a fee per TTB COLA, and reimbursement for label approvals paid by the selling agent; and deposit all duties, taxes, and fees applicable to the importations, to be provided to the selling agent prior to shipment into the Unites States, upon request. Additionally, the Agreement outlines the selling agent's ability to retain third-party customs broker services to facilitate customs clearance, with the winery’s written consent.

Ruling: Because the selling agent receives a fee for its services performed in connection to the imported wine, there is a sufficient financial nexus between the selling agent and the imported goods.

Ruling Date: June 30, 2021

H310170: Tariff classification of Liquefied Natural Gas Plant

HTS: 8418.69.01, free, “Refrigerators, freezers and other refrigerating or freezing equipment, electric or other; heat pumps, other than the air conditioning machines of heading 8415; parts thereof: Other refrigerating or freezing equipment; heat pumps: Other... ." Secondary subheading: 9903.88.01, 25%.

Item: A liquefied natural gas plant consisting of the following main components: a Gas Inlet Receiving Unit that meters, controls, and conditions natural gas; a Mercury Removal Unit that removes mercury from the feed gas due to its corrosive effect on the machinery in the liquefaction unit; an Acid Gas Removal Unit that removes the acidic gases to avoid corrosion, freezing, and plugging problems; a Dehydration Unit, as dehydration of the gas feeds helps minimize corrosion, removes water and prevents the hydrate formation of clogs at the pipelines when the materials are under cryogenic conditions; and a Natural Gas Liquids Fractionation Unit that removes the natural gas liquid condensate and benzene from the feed gas to prevent freeze-out in the liquefaction unit.

Reason: The components that make up the LNG Plant, configured as described, contribute together to perform the function of refrigerating the natural gas to produce liquified natural gas. With the EN to heading 8419 excluding refrigerating machinery of heading 8418, the LNG Plant is a refrigerator that is properly classified under heading 8418.

Ruling Date: June 25, 2021

H316194: USMCA Eligibility of Sway Bar End Link Kit

HTS: 8708.80.6590, 2.5%, "Parts and accessories of the motor vehicles of heading 8701 to 8705: Suspension systems and parts thereof (including shock absorbers): Parts: Other: Other: Other.”

USMCA: Qualifies for USMCA treatment.

Item: A sway bar end link kit for model year 2000-2012 Dodge Ram 2500/3500 pickup trucks. A sway bar end link is a part that attaches to the vehicle’s control arm and the sway bar, which are both part of the suspension system. According to the information provided, the kit is designed to replace a truck’s original equipment, which is prone to failure. Compared to the original equipment, the aftermarket kit produced by BD Engine Brake Inc. incorporates an additional pivot point, which is claimed to help prevent the link from failing. Assembly of the sway bar end link kit will occur at BD Engine Brake’s facilities in Canada using both originating and non-originating materials.

Reason: The merchandise is not used to attach anything to a vehicle coachwork. As a result, this article does not meet the terms of heading 8302. Furthermore, the merchandise operates as a supporting mechanism for an automobile’s suspension system. The EN to heading 8302 makes no mention of any parts related to an automobile’s suspension system. In contrast, the EN to heading 8708 does specifically mention parts pertaining to an automobile’s suspension mountings. The merchandise satisfies the applicable rule of origin requiring an RVC of not less than 50 percent under the net cost method.

Ruling Date: June 24, 2021

H316279: Accumulation under USMCA

Ruling: The manufacturer may accumulate originating material costs through multiple tiers of sourcing when determining the regional value requirement (“RVC”) under the USMCA.

Issue: Whether a commercial vehicle manufacturer may accumulate originating material costs through multiple tiers of sourcing under USMCA. In the example given by the manufacturer, the material (the water pump) from the tier one supplier would not qualify as originating material. However, under currently accepted accumulation practice, the manufacturer may use the originating cost of the bracket, grommet, housing, and processing in the amount of $5.27 for purposes of calculating the regional value content of its engine. At the same time, based on the water pump producer’s costed bill of materials, the manufacturer knows that both the hose and the printed circuit board assembly (“PCBA”) were also subject to processing within a USMCA territory although that work was not sufficient to result in an originating material. In this proposed situation, the manufacturer would work with its water pump supplier to have the Tier Two hose and PCBA suppliers to further break down their respective costs ($2.37 for the hose and $4.87 for PCBA) into originating and non-originating values. Based on support provided by those suppliers in writing, the further breakdown of originating costs results in an increased accumulated value from $5.27 to $8.17 from the purchase of the water pump.

Reason: All stages of production which have taken place in a party to the free trade agreement can be counted as qualifying operations in the manufacture of an originating good, regardless of whether the processing is sufficient to confer originating status to the materials themselves. This means that all operations carried out in the participating countries of a free trade area may be taken into account for origin determination purposes.

Ruling Date: June 24, 2021

H314566: Country of origin of FB3 Wiper Blade assembled in Mexico; Marking; Section 301 trade remedy; 9903.88.03, HTSUS

Marking: Mexico

Origin: Mexico, Section 301 tariffs do not apply.

Item: A beam-type wiper blade featuring dual precision-tensioned steel springs that distributes uniform pressure along the entire length of the blade. The wiper blade is used to clear water, debris and dust from a vehicle’s windscreen. The wiper blade will be partially manufactured and assembled in Mexico. The finished wiper blade under subheading 8512.90.90. The imported components used to produce the wiper blade include steel coil from China (classified in 7217.90.50), which is cut to size in Mexico, bent to shape, and formed using a punch press to create holes for final wiper blade assembly. This cutting and bending process is precise and engineered to product specifications, and that accurate bending of the flat vertebra is key to proper wiper performance. The flat blade vertebra is then assembled with the remaining imported components: a rubber wiper blade element from a country in Europe (classified in 4016.99.60), a basic adaptor, a spoiler, and an end cap from Kosovo (all classified in 8512.90.90), and a hook connector/holding spring, a plastic beauty cover, and a holding spring from China (all classified in 8512.90.90). With the exception of the steel coil, all other components of non-Mexican origin are imported as-is with their end-use determined.

Reason: For marking purposes, the country of origin of the wiper blade is the last country in which the goods underwent production. The term “production" includes manufacturing, processing, and assembling a good. Taken together, the operations performed in Mexico constitute production. The totality of processing that takes place in Mexico is sufficient for the imported materials to be substantially transformed in Mexico.

Ruling Date: June 17, 2021

H311606: Country of Origin of the Wacom Cintiq Pro 16 Drawing Tablet; Section 301 Measures

Origin: Taiwan

Item: A device known as a drawing tablet, described as a multifunctional device that has a liquid crystal display (LCD) with a touch screen that operates in conjunction with automatic data processing (ADP) machines. It does not operate as a stand-alone unit. The user can make professional drawings and images, such as animations and industrial designs, and is able to draw directly onto the LCD screen by using a specialized stylus, a pen-like drawing apparatus stylus. It only functions as a drawing tablet and does not perform any other operations. The product is comprised of an LCD display module, front and back cover assemblies, and various printed circuit board assemblies (PCBAs). When it is sold to the consumer, it is retail packaged with a power adapter, specialized cables, and the stylus pen. There are four major components that make up the tablet: the sensor control board, scaler board, keypad board, and front-cover module. The keypad board, scaler board, and sensor control will be produced in Taiwan

Reason: The proposed processing and assembly operations performed in Taiwan will result in a substantial transformation of the Chinese components, which are shipped to Taiwan. This processing work now includes the production of the three PCBA boards, the SCB PCBA, the scaler board, and the keypad board, with the addition of the Taiwanese firmware. Building the three PCBA boards is technically intricate and a complex operation. It involves using SMT to populate a myriad of electronic components, including the attachment of the active and passive elements as well as other components onto a bare printed circuit board by soldering, gluing and other means. In addition to the intricate work of populating the components onto the blank PCB boards, they will be programmed with specially written firmware and software, which lets the tablet perform its function as a drawing tablet.

Ruling Date: June 16, 2021

H312261: Tariff classification of Liquefied Natural Gas Plant

Item: A liquefied natural gas plant consisting of the following main components: a Gas Inlet Receiving Unit that meters, controls, and conditions natural gas; a Dehydration and Mercury Removal Unit that removes mercury from the natural gas to prevent machine corrosion; an Acid Gas Removal Unit that removes acidic gases such as carbon dioxide and hydrogen sulfide from the natural gas to prevent corrosion and freezing; a Heavy Hydrocarbon Removal Unit that removes heavy hydrocarbons from the gas stream to prevent freezing at a higher temperature than lighter molecules’ dew point; a Heavy Hydrocarbon Stabilizer that separates lighter hydrocarbons in the condensate from the heavy hydrocarbons that are then removed from the gas stream;and a Liquefaction Unit that liquefies the natural gas by pre-cooling in heat exchangers and sub-cooling (which removes LNG vapor for use in the Plant’s compressor turbines or collects it in a residue gas compressor).

Reason: The components that make up the LNG Plant, configured as described, contribute together to perform the function of refrigerating the natural gas to produce liquefied natural gas. With the EN to heading 8419 excluding refrigerating machinery of heading 8418, the LNG Plant is a refrigerator that is properly classified under heading 8418.

Ruling Date: June 15, 2021