Country of origin marking of a bowed wall repair kit

HQ H312877 February 9, 2021 OT:RR:CTF:FTM H312877 PJG CATEGORY: Origin Mr. William G. Braier Radix Group International dba DHL Global Forwarding 6120 Ace Industrial Drive Cudahy, Wisconsin 53110 Re: Country of origin marking of a bowed wall repair kit Dear Mr. Braier: This is in response to your ruling request and subsequent submission, dated June 3, 2020 and July 10, 2020, respectively, requesting a binding ruling on the country of origin marking and tariff classification of a bowed wall repair kit, specifically, the “Rhino Carbon Fiber 560 GSM Bidirectional Bowed Wall Repair Kit.” The National Commodity Specialist Division forwarded your request to this office for a response. Along with your request, you submitted the instruction manual for the product. The tariff classification of the “Rhino Carbon Fiber 560 GSM Bidirectional Bowed Wall Repair Kit” was addressed in Headquarters Ruling Letter (“HQ”) H314588, dated January 25, 2021. This ruling concerns the country of origin marking of the merchandise. FACTS: In your ruling request, you state that the “Rhino Carbon Fiber 560 GSM Bidirectional Bowed Wall Repair Kit” is “used to repair bowed basement walls, block and poured concrete foundations, and pool walls that are bowed, cracked or leaking.” The kit includes epoxy resin, roll of carbon fibers, metal plates, metal bolts, metal washers, applicators, and vinyl disposable gloves. You provided an instruction manual that describes the appropriate use of the “Rhino Carbon Fiber 560 GSM Bidirectional Bowed Wall Repair Kit.” In summary, a strip of carbon fiber is saturated with epoxy and wrapped around a metal bracket. This bracket is then mounted on the wall using the fasteners. A coat of epoxy is applied over the entire wall area requiring repair, the mounted strip of carbon fiber is laid taut over, and worked into the epoxy. Another layer of epoxy is applied over the carbon fiber strip and allowed to dry. You indicate that “[w]hen the epoxy resin hardens it creates a strip that is 10 times stronger than steel to prevent the wall from continued bowing, and the epoxy seals any leaks.” In one of your submissions, you indicate that the country of origin of the carbon fibers is China, and the remaining components of the kit are from the United States. In an email, dated July 22, 2020, you further indicate that the kit is put together in Canada. ISSUE: What is the country of origin for marking purposes of the “Rhino Carbon Fiber 560 GSM Bidirectional Bowed Wall Repair Kit?” LAW AND ANALYSIS: 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). To allow for a more seamless transition period, at this time, CBP continues to utilize the marking rules set forth in 19 C.F.R. Part 102, with the exception of 19 C.F.R. § 102.19, for purposes of country of origin marking with respect to goods from Canada and Mexico. In this instance, the bowed wall repair kit contains components that originate in the United States and China that are packaged in Canada, therefore, 19 C.F.R. Part 102 is applicable. 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: (1) The good is wholly obtained or produced; The good is produced exclusively from domestic materials; or 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. . . . See 19 C.F.R. §§ 102.11(a)(1)-(3). Section 102.1(g), CBP Regulations (19 C.F.R. § 102.1(g)(10)), defines a “good wholly obtained or produced” as including “A good produced in that country exclusively from goods referred to in paragraphs (g)(1) through (g)(10) of this section or from their derivatives, at any stage of production.” Because the bowed wall repair kit is not described by paragraphs (g)(1)-(g)(10) and it is produced from materials made in the United States and China, the kit does not qualify as “a good wholly obtained or produced” in a country. Therefore, the country of origin of the subject merchandise may not be determined under section 102.11(a)(1). The next step under the hierarchy is to consider whether the country of origin may be determined according to section 102.11(a)(2). Under section 102.11(a)(2), the origin of the good may be based on the origin of the materials used to produce the good, provided the good is produced exclusively from domestic materials. Section 102.1(d), Customs Regulations (19 C.F.R. § 102.1(d)), defines domestic material as “a material whose country of origin as determined under these rules is the same country as the country in which the good is produced.” Because the bowed wall repair kit includes materials from the United States and China, the finished article is not produced exclusively from domestic materials. Accordingly, 19 C.F.R. § 102.11(a)(2) may not be used to determine the country of origin of the subject merchandise. Therefore, analysis must continue to 19 C.F.R. § 102.11(a)(3) to determine the country of origin of the bowed wall repair kit. Under section 102.11(a)(3), “[e]ach 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.” Section 102.1(e) defines “[f]oreign material” as “a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced.” 19 C.F.R. § 102.17 provides, in relevant part: A foreign material shall not be considered to have undergone an applicable change in tariff classification specified in § 102.20 or § 102.21 or to have met any other applicable requirements of those sections merely by reason of one or more of the following:(c) Simple packing, repacking or retail packaging without more than minor processing; In this case, all of the components of the bowed wall repair are produced in the United States, except for the carbon fiber, which is produced in China. Furthermore, all of the components are simply packaged together into a kit in Canada before they are imported into the United States. Therefore, even if the goods were to undergo the applicable change in tariff classification in 19 C.F.R. § 102.20 (which is not the case here, since carbon fiber from China is classified in the same subheading as the bowed wall repair kit (subheading 6815.10, HTSUS)), the simple packing or repacking is not a qualifying operation in Canada under 19 C.F.R. § 102.17. Hence, the “Rhino Carbon Fiber 560 GSM Bidirectional Bowed Wall Repair Kit” is not considered a product of Canada, pursuant to 19 C.F.R. § 102.11(a)(3). Since the country of origin cannot be determined under 19 C.F.R. § 102.11(a), we turn next to 19 C.F.R. § 102.11(b). Section 102.11(b) contains an exception for goods classified as a set pursuant to General Rule of Interpretation (“GRI”) 3. The bowed wall repair kit is classified as a set pursuant to GRI 3(b), therefore, section 102.11(b) does not apply in this case. Next, we turn to 19 C.F.R. § 102.11(c), which states, in relevant part, that when a good is classified as a set pursuant to GRI 3, “the country of origin of the good is the country or countries of origin of all materials that merit equal consideration for determining the essential character of the good.” All of the materials of the set, which merit equal consideration, must be considered. See HQ 559032 (Oct. 25, 1995) (discussing the interpretation and application of the phrase “merit equal consideration”). With regard to the bowed wall repair kit, the carbon fiber and the epoxy merit equal consideration for determining essential character because they are the two main components of the kit based on their percentage of value and role in relation to the kit. Therefore, although CBP’s determination in HQ H314588, January 25, 2021, was that the carbon fiber imparted the essential character of the bowed wall repair kit for classification purposes, the countries of origin of the bowed wall repair kit are the countries from which the carbon fiber and the epoxy originate. See, e.g., HQ H313148 (Dec. 9, 2020) (determining that the pasta and tomatoes merited equal consideration for determining the essential character of the pasta kits under 19 C.F.R. § 102.11(c) even though the pasta imparted the essential character of the pasta kits for classification purposes). Since the country of origin of the epoxy in each kit is the United States and the country of origin of the carbon fibers is China, the country of origin of the bowed wall repair kit will be the United States and China. In accordance with 19 U.S.C. § 1304, every article of foreign origin, unless excepted, must be marked with the name of the country of origin of the article. Inasmuch as the marking requirements of 19 U.S.C. § 1304 are applicable only to articles of “foreign origin,” the bowed wall repair kit is not required to be marked with a reference to the United States origin upon importation into the United States. See HQ H313148 (Dec. 9, 2020). The Federal Trade Commission (“FTC”) has jurisdiction concerning the use of the phrase “Made in the U.S.A.,” or similar words denoting U.S. origin. Consequently, any inquiries regarding the use of such phrases reflecting U.S. origin should be directed to the FTC, at the following address: Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580. HOLDING: Based on the facts provided, the country of origin for marking purposes of the “Rhino Carbon Fiber 560 GSM Bidirectional Bowed Wall Repair Kit” is the United States and China. The FTC has jurisdiction concerning the use of the phrase “Made in the U.S.A.,” or similar words denoting U.S. origin. Consequently, any inquiries regarding the use of such phrases reflecting U.S. origin should be directed to the FTC, at the following address: Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, D.C. 20580. A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction. Sincerely, Yuliya A. Gulis, Chief Food, Textiles and Marking Branch