Application for Further Review of Protest No. 2704-22-160272; Country of Origin of Computer Cooler Fans; Section 301 Measures

HQ H327526 June 28, 2024 OT:RR:CTF:VS H327526 RRB CATEGORY: Origin Center Director, Electronics Center of Excellence and Expertise U.S. Customs and Border Protection 301 E. Ocean Blvd. Long Beach, CA 90802 Attn: Ann Martines, Import Specialist RE: Application for Further Review of Protest No. 2704-22-160272; Country of Origin of Computer Cooler Fans; Section 301 Measures Dear Port Director: This is in response to the Application for Further Review (“AFR”) of Protest No. 2704-22-160272, timely filed on May 3, 2022, by Kyl J. Kirby, Attorney and Counselor at Law, P.C., on behalf of On 2 Tech Inc. DBA CWC Group Inc. (“Protestant” or “On 2 Tech”). This decision concerns the country of origin of computer cooler fans and the assessment of Section 301 duties. FACTS: The merchandise at issue are computer cooler fans that are imported from China. The Protestant explains that the computer cooler fans were originally part of kits with countries of origin that are “believed to be either Vietnam or Malaysia.” In a third country, the central processing unit (“CPU”) chips were separated from the computer cooler fans. The CPU chips were not imported with the computer cooler fans. The protested merchandise consists of six (6) entries that were entered at the Port of Los Angeles/Long Beach (“Port”) on June 2, 2021; June 12, 2021; July 10, 2021; July 22, 2021; August 5, 2021; and September 7, 2021, under subheading 8473.30.51, Harmonized Tariff Schedule of the United States (“HTSUS”), with a country of origin of Malaysia. On September 3, 2021, your office issued a proposed Notice of Action (CBP Form 28) to the Protestant on one of the entries, requesting descriptive literature regarding how the product is manufactured and copies of the following documentation: a list of owners and corporate officers, along with a narrative outlining the business relationships and selling policy between the importer, consignee, foreign logistics company, and foreign shipper. Your office also requested, via the same CBP Form 28, the following records to substantiate the importer’s country of origin claim: 1) A through bill of lading showing movement of the goods from outside the factory through to the place of delivery in the U.S.; 2) purchase order and any revisions from the manufacturer to the importer of record; 3) manufacturer invoices and proof of payment from importer to manufacturer for the shipment; 4) records from the Malaysian factory demonstrating that raw materials were obtained by the factory and were available for production, i.e., purchase order for raw materials, invoices for raw materials, shipping records for raw materials, proof of payment for raw materials, Customs clearance records for raw materials imported into the country of manufacture; 5) importer of record copy of commercial invoice, if purchased; 6) production records for products assembled; 7) assembly or production records maintained on the factory floor by the production manager; 8) time cards to show that employees were actually working during the time the goods were manufactured; 9) export documentation showing the goods purported to be produced by the factory were ones actually exported; 10) complete description of all production processing steps and dates they were performed; 11) pictures of the factory inside and out, factory inspection reports conducted by the importer or their agent; 12) a complete list and types of machinery available for the production process, including pictures; 13) any other documents you can provide that may substantiate origin, e.g., bill of lading, truck waybill, etc. showing movement of this shipment. After no response was received, your office issued a CBP Form 29 to the Protestant on October 27, 2021, notifying the Protestant that the country of origin on the entered merchandise was changed from Malaysia to China, with the assessment of duties under Section 301. The entry for which the CBP Form 28 and CBP Form 29 were issued was liquidated on November 5, 2021. On October 28, 2021, the broker emailed your office with additional documentation, and explained that “[t]his shipment contains all computer CPU coolers except 3100pcs RMA replacement fans (country of origin: Malaysia). We had been verified with our agents these parts fall under HS code: 84733010, a special category of computer parts, which are duty-free.” However, the Protestant did not provide any information substantiating their claim that the country of origin of the imported computer cooler fans is Malaysia. Your office responded via email, dated February 16, 2022, that since the Protestant failed to prove that the products were made in Malaysia, they will be changing the country of origin from Malaysia to China on the other five entries at issue in this Protest. On February 17, 2022, the Protestant asked for time to compile information concerning the Port’s request. The Protestant was given a deadline of July 1, 2022, to respond with the requested information to substantiate their claim that the country of origin of the computer cooler fans is Malaysia. No additional information was received by this deadline. Accordingly, the remaining entries at issue in this Protest were liquidated on March 11, 2022; and April 8, 2022. The Protestant filed this Protest and AFR on May 3, 2022, asserting that the country of origin of the protested merchandise is Malaysia, and that therefore, the merchandise is not subject to Section 301 duties. ISSUE: What is the country of origin of the computer cooler fans for purposes of Section 301 trade measures? LAW AND ANALYSIS: We note that this matter is protestable under 19 U.S.C. § 1514(a)(5) as a decision relating to the liquidation or reliquidation of an entry. The protest was timely filed within 180 days of liquidation. See 19 U.S.C. § 1514(c)(3). Further Review of Protest Number 2704-22-160272 was properly accorded to the Protestant pursuant to 19 C.F.R. § 174.24(b) because the decision against which the protest was filed is alleged to involve questions of law or fact which have not been decided on by CBP or by the Customs courts. The United States Trade Representative (“USTR”) has determined that an additional ad valorem duty of 25 percent will be imposed on certain Chinese imports pursuant to USTR’s authority under Section 301(b) of the Trade Act of 1974 (“Section 301 measures”). The Section 301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter III, U.S. Note 20, HTSUS. As indicated above, after a review of the initial information submitted with the merchandise upon entry, the Port concluded that the Protestant provided insufficient evidence for its claims that the country of origin of the computer cooler fans was Malaysia. While the broker emailed your office with some additional documentation, no information was submitted to substantiate the claim that the country of origin of the imported computer cooler fans is Malaysia. Furthermore, although the Protestant asked for time to compile information concerning your office’s request, no additional information was received. After AFR was granted, our office e-mailed counsel for the Protestant on April 11, 2024, seeking more detailed information about the production process of the protested merchandise. After receiving no response, we again e-mailed counsel for the Protestant on May 1, 2024, seeking an update on our request for additional information. On May 7, 2024, our office e-mailed counsel for the Protestant a third time, and we set a deadline of May 22, 2024, for the requested information. On May 16, 2024, counsel for the Protestant responded to our request for more detailed information to substantiate its claims that the country of origin of the computer cooler fans is Malaysia with the following statement: “[t]he kits were originally solely made up of CPUs and cooling fans. The kits were broken up outside the U.S. before being entered into the U.S. with only the colling [sic] fans being imported. No other items were originally included in the kits.” Aside from this statement, no additional documentation was ever submitted to our office. As the Protestant has failed to substantiate its claim that the country of origin of the computer cooler fans is Malaysia, and the fans were imported from China, we believe that the Port properly denied this Protest. Accordingly, the country of origin of the protested merchandise is China. HOLDING: The country of origin of the imported computer cooler fans is China for purposes of Section 301 measures. The protest should be DENIED. You are instructed to notify the protestant of this decision no later than 60 days from the date of this decision. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to this notification. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel, and to the public on the Customs Rulings Online Search System (“CROSS”) at https://rulings.cbp.gov/, which can be found on the CBP website at https://www.cbp.gov and other methods of public distribution. Sincerely, for Yuliya A. Gulis, Director Commercial Trade and Facilitation