The country of origin of single handle shower systems

N333771 July 27, 2023 OT:RR:NC:N1:102 CATEGORY: Origin M. Jason Cunningham Sonnenberg & Cunningham PA 780 Fifth Ave South, Suite 780Naples, FL 34102 RE:  The country of origin of single handle shower systems Dear Mr. Cunningham: In your letter dated June 30, 2023, you requested a country of origin ruling on two single handle shower systems on behalf of your client, Delta Faucet Company. The products at issue are two single handle shower systems, item numbers B114900C and B112900C.  Item number B114900C consists of a plastic showerhead, a shower arm, an escutcheon, a single-handle brass valve that controls the flow of water, and a tub spout.  Item number B112900C consists of a plastic showerhead, a shower arm, an escutcheon, and a single-handle brass valve that controls the flow of water. The items for each system are packaged together ready for retail sale. 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 single handle shower systems consist of two or more different articles that are, prima facie, classifiable in different headings.  The systems also consist of articles put up together to carry out a specific activity, i.e., controlling the flow of water.  Finally, the articles are put up in a manner suitable for sale directly to users without repacking.  Therefore, the single handle shower systems are 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.  Here, the article that provides the essential character of each single handle shower systems is the brass valve, as it controls the flow of water. With regard to country of origin, the items packaged in each set are from China or Vietnam. For both sets, the manufacturing of the valve body occurs in Vietnam and begins with a raw brass rod being cut-to-size.  The cut-to-size rod is then heated and pressed. The rod, which is now referred to as a blank, is then machined.  The machining processes form the inlet and outlet connections, and threading of the valve body.  Additionally, the cavity of the body is milled and deburred. Afterwards, the body undergoes a passivating process. The process continues in Vietnam with the assembly of the cartridge valve.  The assembly of the valve cartridge begins with the installation of a Chinese O-ring and washer into the valve seat of the cartridge.  Afterwards, an O-ring is installed onto a Chinese balance valve, which is pressed onto the valve seat manually and mechanically.  A rubber washer is manually installed onto the outer valve shell, followed by the installation of a water gasket and stop spring into the outer valve shell.  To complete the cartridge valve, a Chinese cartridge is pressed into the outer valve shell. Once the cartridge valve is assembled, a Chinese check valve is inserted into the Vietnamese manufactured valve body.Afterwards, the cartridge valve is inserted into the valve body, over the check valve, and then pressed in place manually and using a machine. A Chinese bonnet is then automatically pressed onto the valve body with the cartridge valve.  Finally, a Chinese temperature adjuster and O-ring are automatically installed onto the bonnet or valve body.  The completed valve undergoes various inspections and testing. The manufacturing of the handle, which also occurs in Vietnam, begins with the melting of ingots.  The melted material is then poured into a cast. Afterwards, the handle is transferred to a tray for finishing processes, such as deburring, threading, sandblasting, and polishing. The handle is then plated. A complete valve and handle are then exported to China to be packaged together with the items from China, e.g., showerhead, shower arm, escutcheon, and fasteners. A tub spout is also packaged with part number B114900C.   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." The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character or use, different from that possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 69 C.C.P.A. 151 (1982). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff'd, 989 F.2d 1201 (Fed. Cir. 1993). For each system, we consider the origin of the valve, as it is the essential character.  With the valve, the valve body is manufactured in Vietnam and afterwards assembled to various components from China and Vietnam (the cartridge valve) in Vietnam. Similar scenarios for faucet units were discussed in Headquarters ruling H321630 (June 27, 2022) and while, we are considering the origin of shower sets rather than faucet units, like the faucet units, the valve is the essential character of each faucet set, and the country of origin of the valves was based on the manufacturing, assembly and testing processes of the valve bodies and their components. Therefore, like H321630, it is our view the components here lose their identities in Vietnam to become a brass valve. As such, the country of origin of the valve in both sets is Vietnam. Accordingly, the country of origin of both single handle shower systems for the purpose of Section 301 Trade Remedies is Vietnam. In regard to the application of Section 301 Trade Remedies, we note that goods originating from China unless specifically excluded, are subject to the trade remedy duties. In our present scenario, articles of Chinese origin are packaged in each single handle shower system. Considering such, we refer to the guidance pertaining to sets packaged for retail sale, which is provided on the CBP website under “CBP Section 301 Trade Remedies Frequently Asked Questions.” The answer to “How are the Section 301 duties assessed in respect to sets packaged for retail sale, which contain components covered by the Section 301 remedy,” reads, in pertinent part, as follows: When importing goods put up in sets for retail sale (in accordance with General Rule of Interpretation 3) that contain articles subject to the Section 301 remedy, if the product that imparts the essential character to the set (i.e., the HTSUS provision under which the entire set is classified) is covered by the Section 301 remedy, then the entire set will be subject to the additional 25% duties.For the two single handle shower systems, item numbers B114900C and B112900C, the valve, which is of Vietnamese origin, is the essential component of both single handle shower systems. As such, both single handle shower systems are not subject to the additional duties applicable to products of China under Section 301 of the Trade Act of 1974, as amended, upon importation into the United States.Regarding the marking of the system, we would note that Treasury Decision (T.D.) 91-7, published in Volume 25, Customs Bulletin and Decisions, at 6 (January 16, 1991), addressed, among other things, the application of country of origin marking requirements to sets. It states therein, specifically at 16: . . . in most cases, the mere inclusion of an item in a collection will not substantially transform it into an article with a new name, character or use and, therefore, each item must be separately marked with its own country of origin. (Where the marking of the container will reasonably indicate the country of origin to the ultimate purchaser, the container may be marked instead of the individual articles. See 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d).) This result is consistent with the purpose of the marking statute since the ultimate purchaser’s decision as to whether to buy the set might be influenced by the country of origin of any of the items in the set, whether or not an item gives the set its essential character.In considering T.D. 91-7, we find that the Chinese origin components packaged with the single handle systems are not substantially transformed as a result of being packaged with the Vietnamese components, and the individual components and the origin of all items within the systems must be identified. Consequently, each article must be individually marked with their country of origin, provided such marking is visible through the retail packaging of the systems, or the packaging must identify the origin of each of these items. Please note that 19 C.F.R. § 177.9(b)(1) provides that each 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 and Border Protection 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. This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection 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, please contact National Import Specialist Sandra Martinez at sandra.martinez@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division