The tariff classification, country of origin, and application of Section 301 trade remedy of a vehicle heater control switchboard from China

N302435 March 4, 2019 CLA-2-85:OT:RR:NC:N2:220 CATEGORY: Classification; Origin TARIFF NO.: 8537.10.9170 Tomokatsu Waragaya Stanley Electric U.S. 420 East High St London, OH 43140 RE: The tariff classification, country of origin, and application of Section 301 trade remedy of a vehicle heater control switchboard from China Dear Mr. Waragaya: In your letter dated December 20, 2018 you requested a ruling on the country of origin and application of Section 301 additional duties for the vehicle heater control switchboard (TJBA). The TJBA consists of a printed circuit board assembly (PCBA), an LCD display, molded plastic covers and panels, a switch operator/actuator panel assembly, and various hardware such as clips, screws, and cushioning gaskets. Once fully assembled, the TJBA is the center console for the vehicle that incorporates the various switches and features for the user to interact with. The stated function of an assembled TJBA is to allow the user to select their preferred in-vehicle temperature by interacting with the vehicle’s electronic control unit. With regard to your suggested classification of the final TJBA vehicle heater control switchboard assembly, consisting of the PCBA, the switch operator/actuator panel assembly, the covers and case panels, under 8537.10.9170, Harmonized Tariff Schedule of the United States, (HTSUS), we agree. Further, we note your suggestion that the PCBA, which you state functions as a controller board, is properly classified under 8537.10.9170, HTSUS. We agree. Based on the provided information, the PCBA has a distinct function of electrical control as users press the buttons on the front of the console, located within the switch operator/actuator panel, which makes physical contact with the corresponding electrical switch on the PCBA for the purpose of performing some vehicle function. In your request you provided a brief description of the manufacturing steps numbered 1 through 45 and propose three scenarios where the TJBA is assembled in a specific combination of production steps which are summarized as follows: In manufacturing steps 1 through 12 electronic components (capacitors, resistors, LEDs, transistors, integrated circuits, and 22 tactile switches) are surface mounted (SMT) to a bare printed circuit board. At this juncture the PCBA consists of six boards and you state it to be operative and capable of performing its intended functions. However, we would note that until the completion of step 15, the six assemblies are on a singular board structure. In manufacturing steps 13 through 15 the PCBA undergoes a quality inspection, waterproofing, and dicing into six individual boards. In manufacturing steps 16 through 24 an encoder switch, an LCD, a diffusion sheet, and a housing is assembled onto the PCBA. In manufacturing steps 25 through 45 the PCBA/LCD assembly is inserted into the molded plastic case, garnish panels, and cover assembly along with the switch operator/actuator panel assembly, knobs, and remaining components to produce a fully functional vehicle center control console. In the first scenario you indicate that the PCBA is manufactured in Thailand as described above in manufacturing steps 1 through 12. The remaining manufacturing steps are conducted in China. In the second scenario you indicate that the PCBA is manufactured and further processed in Thailand as described above in manufacturing steps 1 through 15. The remaining manufacturing steps are conducted in China. In the third scenario you indicate that the PCBA is manufactured and further processed in Thailand as described above in manufacturing steps 1 through 24. The remaining manufacturing steps are conducted in China. With regard to your request for the appropriate country of origin marking of the subject TJBA, Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit in such a manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. The regulations implementing the requirements and exception to 19 U.S.C. § 1304 are set forth in Part 134, Customs and Border Protection Regulations (19 C.F.R. Part 134). 19 C.F.R. § 134.1(b) provides in pertinent part as follows: Country of origin means the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the “country of origin” within the meaning of this part; As stated in HQ 735009 dated July 30, 1993, “The country of origin is the country where the article last underwent a “substantial transformation”, that is, processing which results in a change in the article's name, character, or use”. Customs and Border Protection (CBP) maintains, based on United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (C.A.D. 98) (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993), that “A substantial transformation occurs when an article emerges from a manufacturing process with a name, character, and use that differs from the original material subjected to the processing.” However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. See Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). In determining the origin of the subject TJBA switchboard, we would note that the SMT manufacturing process of the PCBA in Thailand is significant and one that substantially transforms the individual electrical components and bare printed circuit board into a new article. Therefore, the country of origin of the PCBA will be Thailand. It is the view of this office that the PCBA imparts the essential character of the complete TJBA switchboard and the assembly of the remaining components into the TJBA switchboard, as described in manufacturing steps 13 through 45, does not constitute substantial transformation of the original article into a new or different article of commerce. Therefore, the country of origin of the TJBA switchboard for each of the provided scenarios is based on the origin of the apparatus that establishes its essential character, the PCBA, and will be Thailand. Furthermore, the TJBA switchboard is not subject to the Section 301 trade remedies as provided for under 9903.88.03, HTSUS. The applicable subheading for the vehicle heater control switchboard TJBA will be 8537.10.9170, HTSUS, which provides for “Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of 8535 or 8536, for electric control or the distribution of electricity…: For a voltage not exceeding 1,000 V: Other: Other: Other”. The general rate of duty will be 2.7 percent ad valorem. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at https://hts.usitc.gov/current. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Karl Moosbrugger at karl.moosbrugger@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division