The tariff classification and country of origin of a hands-on detection controller

N348231 May 2, 2025 CLA-2-85:OT:RR:NC:N2:212 CATEGORY: Classification; Origin TARIFF NO.: 8543.70.9860; 9903.01.25 Byeoung Ho Park SEIN Customs & Auditing Corp 138, Seoun-ro, Seocho-gu Seoul 06619 South Korea RE: The tariff classification and country of origin of a hands-on detection controller Dear Mr. Park: In your letter dated April 25, 2025, you requested a tariff classification and country of origin determination ruling on behalf of your client, Hyundai Motor Company. There are two items at issue with this request, which are different models of the same item, described as a Hands-On Detection (HOD) Controller. The two items are identified by part numbers 56188DO000 and 56188P6000 and are virtually identical in form and function. The subject devices are capacitive sensing systems for use within a vehicle. The subject device is comprised of a Printed Circuit Board Assembly (PCBA) populated with various electronics including integrated circuits, resistors, capacitors, and connectors. This PCBA is encased within a plastic enclosure. The completed device is placed within the steering wheel of a vehicle. In use, the sensing system creates a capacitive field that, through electrical conductivity, allows the PCBA to detect when a driver’s hands are in contact with the steering wheel and the driver is in control of the vehicle. Once negative contact is detected by the PCBA, an electrical signal is sent through the vehicle’s Controller Area Network (CAN) to the vehicle’s Advanced Driver Assistance System (ADAS), which will alert the driver to take control of the vehicle. In your request, you suggest that the correct classification for the subject devices should be 8543.70.9860, Harmonized Tariff Schedule of the United States (HTSUS). We agree. The applicable subheading for the Hands-On Detection Controller, part numbers 56188DO000 and 56188P6000, will be 8543.70.9860, HTSUS, which provides for “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus: Other: Other: Other: Other.” The general rate of duty will be 2.6% ad valorem. Effective April 5, 2025, Executive Orders implemented “Reciprocal Tariffs.” All imported merchandise must be reported with either the Chapter 99 provision under which the reciprocal tariff applies or one of the Chapter 99 provisions covering exceptions to the reciprocal tariffs. Products of China, including Hong Kong and Macau, will be assessed an additional ad valorem rate of duty of 125 percent. Products from all other countries will be subject to an additional 10 percent ad valorem rate of duty. At the time of entry, you must report the Chapter 99 heading applicable to your product classification, i.e. 9903.01.25, in addition to subheading 8543.70.9860, HTSUS, listed above. 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 at https://hts.usitc.gov/. You further request a country of origin determination based on the information provided. You state that the manufacturing process begins in France with the creation of the PCBA, which includes the microcontroller, multiplexer, transceiver, power management, and various other electrical components. This process is completed via a Surface Mount Technology (SMT) process where the PCBA is loaded with the components and then they are soldered and heated in a reflow oven. The finished PCBA is then inspected, packaged, and shipped to China. In China, the PCBA is mounted within a plastic upper and lower housing, which are molded in China. The finished device is then inspected and packaged for shipment to the United States. When determining the country of origin for purposes of applying current trade remedies under Section 301, the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling Letter (“HQ”) H301619, dated November 6, 2018. 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, 681 F.2d 778 (C.C.P.A. 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). Regarding the origin of the subject HOD Controllers, it is the opinion of this office that the French PCBA imparts the character of the finished device as it represents the principle electrical functionality of the finished device. Further, the steps performed in China are simple in nature and do not substantially transform the PCBA into a new and different article of commerce. Based upon the facts presented, the country of origin for the HOD Controllers, part numbers 56188DO000 and 56188P6000, will be France. The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP. 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 Luke LePage at luke.lepage@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division