Classification and Eligibility for preferential tariff treatment under the USMCA of the Mobili-T Swallowing System

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H314639 November 9, 2020 OT:RR:CTF:VS H314639 CMR CATEGORY: Classification Ms. Misty Gibbins Pacific Customs Brokers Inc. 1400 A Street Blaine, Washington 98230 RE: Classification and Eligibility for preferential tariff treatment under the USMCA of the Mobili-T Swallowing System Dear Ms. Gibbins: This is in response to your request, on behalf of your client, True Angle Medical Technologies, for a ruling on the classification of a device designed to be used for swallowing exercises. You also inquire as to the eligibility of the device, referred to as the Mobili-T Swallowing System, for preferential tariff treatment under the United States – Mexico – Canada Agreement (USMCA). Your request was referred to this office for a response. FACTS: The Mobili-T Swallowing System is described as a product used in swallowing therapy. It is an app-enabled, wearable electronic device designed for use during active swallowing exercises. The device enables feedback on muscle activity for individuals with swallowing impairment disorders. The Mobili-T has a hardware enclosure that houses a printed circuit board, three electrodes, a disc magnet, battery, and Bluetooth module, which allows for wireless connectivity to the Mobili-T app used on a smart device. The Mobili-T is imported with a case that is also used as a charging dock. In operation, the hardware is placed under the user’s chin in alignment with the jaw by using a skin sensitive adhesive. The user follows a series of Mobili-T app-based exercise routines to monitor muscle activity by measuring surface electromyography (sEMG). Swallowing activity is displayed to the user in real time throughout the exercise session. Once the exercise session is completed, the user is able to view their performance and compare it against previous exercise sessions. The Mobili-T Swallowing System is designed to be used in the home setting. You indicate that the Mobili-T, consisting of a printed circuit board, electrodes, a disc magnet, battery, a Bluetooth module, LED light tubes and charging pins housed in a plastic enclosure, is assembled in Canada. In addition, the charging base, which also serves as a storage case, is assembled in Canada. The various components of the Mobili-T and storage case are sourced from the United States, Canada, Taiwan and China. The components which are of origins other than the United States or Canada and assembled with U.S. and Canadian components in Canada are: two steel tackserts (Taiwan), 3 mm light pipe (China), 6mm length PC light pipe (China), battery (China), USB cable (China), and 2 screws (China). ISSUE: What is the classification of the Mobili-T Swallowing System? Whether the Mobili-T Swallowing System qualifies for preferential tariff treatment under the USMCA. LAW AND ANALYSIS: Classification decisions under the HTSUS are made in accordance with the General Rules of Interpretation (“GRIs”). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order. You propose that the Mobili-T Swallowing System is classifiable under subheading 9031.80.8085, HTSUS, which provides for: “Measuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter; profile projectors; parts and accessories thereof: Other instruments, appliances and machines: Other: Other.” We agree. The next question is whether the Mobili-T Swallowing System qualifies for preferential tariff treatment under the USMCA. The United States-Mexico-Canada Agreement (“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 of the 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: For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country, as defined in subdivision (l) of this note, 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— the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries; the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials; the good is a good produced entirely in the territory of one or more USMCA countries using nonoriginating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o)); or * * * As the Mobili-T Swallowing System is assembled in Canada of components which include non-originating components, we must look to the tariff shift rule for goods of subheading 9031.80, HTSUS, to see if the non-originating components make the applicable shift so that the product assembled in Canada qualifies as originating under the USMCA. The applicable tariff shift rule set forth in GN 11(o), Ch. 90, Rule 76, provides: A change to subheading 9031.80 from any other heading; or A change to subheading 9031.80 from subheading 9031.90, whether or not there is also a change from any other heading, provided there is a regional value content of not less than: (1) 60 percent where the transaction value method is used; or (2) 50 percent where the net cost method is used. The non-originating components which are imported into Canada to be assembled with U.S. and Canadian originating components are classifiable in headings of Chapters 39, 73 and 85. As such, the tariff shift rule set forth in GN 11(o), Ch. 90, Rule 76(A) is met. Thus, the Mobili-T Swallowing System qualifies as an originating good eligible for preferential tariff treatment under the USMCA. HOLDING: The Mobili-T Swallowing System is classified in subheading 9031.80.8085, HTSUS, which provides for: “Measuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter; profile projectors; parts and accessories thereof: Other instruments, appliances and machines: Other: Other.” The Mobili-T Swallowing System qualifies as an originating good under the USMCA. Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.” 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, Monika R. Brenner, Chief Valuation and Special Programs Branch