The country of origin of a charge adapter set from Vietnam

N304932 July 10, 2019 CLA-2-85:OT:RR:NC:N2:220 CATEGORY: Origin Victor Yeh Protop International Inc. 10F-8, NO. 237, SEC. 1, Datong Road Xizhi, New Taipei City 22161 Taiwan RE: The country of origin of a charge adapter set from Vietnam Dear Mr. Yeh: In your letter dated June 23, 2019 you requested a country of origin ruling on behalf of your client, Walgreen Co. The merchandise under consideration is identified as the Lightning 2.1 Amp Wall Charger set which consists of a retail package containing a 6 ft. braided electric cable, which has a male USB connector on one end and a lightning connector on the other end, and a 10.5 W power adapter plug with a USB output socket. Based on the information supplied, all of the component materials that make up the braided electric cable and the 10.5 W power adapter are sourced from China and the assembly of the two articles is conducted in Vietnam. In your request, you state that the adapter plug is assembled in Vietnam by wave soldering 43 components, such as resistors, capacitors, integrated circuits, fuses, diodes, and LEDs, onto a bare printed circuit board. The female USB connector and wall socket terminals are then soldered onto the assembly and encapsulated in a plastic case. At various stages throughout the assembly process, you indicate that testing and quality control procedures are conducted on the parts as well as the finished product. You also state that the braided electric cable is assembled in Vietnam by soldering the USB connector to one end of the cable followed by an application of a plastic strain relief over mold. On the other end of the cable, a lightning connector is soldered on and a plastic strain relief is applied. After the cable is tested, it is packaged with the wall adapter plug inside the retail carton. General Rule of Interpretation (GRI) 1, Harmonized Tariff Schedule of the United States (HTSUS), states in part that for legal purposes, classification shall be determined according to the terms of the headings, any relative section or chapter notes and, unless otherwise required, according to the remaining GRI’s taken in order. Goods that are, prima facie, classifiable under two or more headings, are classifiable in accordance with GRI 3. GRI 3 (a) states that the heading that provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings refer to only part of the items in a composite good or set, those headings are to be regarded as equally specific in relation to the goods, even if one of them gives a more complete or precise description of the good. As such, they are regarded as equally specific and classification of the composite good or set is to be determined by GRI 3(b) or GRI 3(c) taken in the appropriate order in which they are set out in GRI 3. GRI 3(b) states in part that composite goods or sets, which cannot be classified by reference to GRI 3(a), are to be classified as if they consisted of the component that gives them their essential character The Explanatory Notes to the Harmonized Tariff System, although not legally binding, provide guidance in the interpretation of the Harmonized Commodity Description and Coding System at the international level. Explanatory Note X to GRI 3 (b) provides that the term "goods put up in sets for retail sale" means goods that: (a) consist of at least two different articles which are, prima facie, classifiable in different headings; (b) consist of articles put up together to meet a particular need or carry out a specific activity; and (c) are put up in a manner suitable for sale directly to users without re-packing. Goods classifiable under GRI 3 (b) are classified as if they consisted of the material or component which gives them their essential character, which may be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the article. The Lightning 2.1 Amp Wall Charger set consists of two or more articles that are, prima facie, classifiable in different headings. The Lightning 2.1 Amp Wall Charger set also consists of articles put up together to carry out a specific activity (i.e., conversion of vehicle power to USB 5 V standard). Finally, the articles are put up in a manner suitable for sale directly to users without repacking. Therefore, the Lightning 2.1 Amp Wall Charger set is described within the meaning of "goods put up in sets for retail sale." In accordance with GRI 3 (b), which states in part that goods put up in sets for retail sale, that cannot be classified by reference to GRI 3 (a), are to be classified as if they consisted of the component which gives them their essential character. In our view, the article that provides the essence of the Lightning 2.1 Amp Wall Charger set is the charge adapter. With regard to the origin of the Lightning 2.1 Amp Wall Charger set, the marking statute, section 304, 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 its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. The “country of origin” is defined in 19 CFR 134.1(b) as “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; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.” The courts have held that a substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 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); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982). Further, in Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016), the Court of International Trade (“CIT”) interpreted the meaning of “substantial transformation” as used in the Trade Agreements Act of 1979 (“TAA”) for purposes of government procurement. In Energizer the court reviewed the “name, character and use” test in determining whether a substantial transformation had occurred in determining the origin of a flashlight, and reviewed various court decisions involving substantial transformation determinations. The court noted, citing Uniroyal, Inc. v. United States, 3 C.I.T. 220, 226, 542 F. Supp. 1026, 1031, aff’d, 702 F.2d 1022 (Fed. Cir. 1983), that when “the post-importation processing consists of assembly, courts have been reluctant to find a change in character, particularly when the imported articles do not undergo a physical change.” Energizer at 1318. In addition, the court noted that “when the end-use was pre-determined at the time of importation, courts have generally not found a change in use.” Energizer at 1319, citing as an example, National Hand Tool Corp. v. United States, 16 C.I.T. 308, 310, aff’d 989 F.2d 1201 (Fed. Cir. 1993). Furthermore, courts have considered the nature of the assembly, i.e., whether it is a simple assembly or more complex, such that individual parts lose their separate identities and become integral parts of a new article. Based upon the facts presented and the pertinent authorities, it is the opinion of this office that the assembly process described above results in a substantial transformation of the Chinese components. As the charge adapter establishes the essence of the set, and it is fabricated with Chinese components that are transformed in Vietnam into a new and different article of commerce with a name, character, and use distinct from the individual components and bare printed circuit board, the Lightning 2.1 Amp Wall Charger set is considered a product of Vietnam for origin and marking purposes at the time of importation into the United States. 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