RE: The tariff classification and country of origin of the XP Series inline labeling system

U.S. Department of Homeland Security U.S. Customs and Border Protection National Commodity Specialist Division One World Trade Center, Suite 51.201 New York, NY 10007 U.S. Customs and Border Protection N365387 October 23, 2026 CLA-2-84:OT:RR:NC:N1:105 CATEGORY: Classification; Origin TARIFF NO.: 8422.30.9120 Jean Francois Laurin LGC Consultants en logistique 360 Rue Saint-Jacques Montreal, QC H2Y 1P5 Canada RE: The tariff classification and country of origin of the XP Series inline labeling system Dear Mr. Laurin: In your letter dated September 24, 2026, on behalf of your client, Nita, you requested a tariff classification and country of origin determination ruling. The item under consideration is described as the XP Series inline labeling system, specifically the XP-200T (item #3568), which is designed to automatically apply pressure-sensitive labels to bottles and other containers moving through a production or packaging process. While there are several different variations within the XP Series, they are all manufactured and function in a substantially similar manner with the only difference being the size and quantity of labeling heads. In the representative configuration there will be two NITA AE-916 MK2 pressure-sensitive wipe-on labeling heads; a powered conveyor and associated product guide rails; Pathfinder product-handling assemblies; a Top Clamping Belt (TCB) and related adjustment assemblies; product sensors and label-sensing equipment; side applicator and foam-roller assemblies; an electrical enclosure and machine-control system; a panel PC HMI running NITA productivity software; and the machine frame, head-adjustment systems, safety controls and associated structural components. NITA commercial literature describes the XP inline series as a fully integrated system combining conveyance, product handling, NITA labeling heads and the NITA productivity software/HMI. The pressure-sensitive wipe-on labeling head (item AE-916 MK2), is the core of the system and is designed to dispense and apply pressure-sensitive labels to bottles and other containers. The device manages the label web from the initial supply roll, through the application process, and finally to the recovery of the spent backing liner. During operation, the labeling head feeds and advances the label web under controlled tension, utilizing a sensor to detect the position of individual labels and index the web to the appropriate application position. At the peel plate, the backing liner changes direction, causing the pressure-sensitive label to separate from the liner and be presented for application, where it is then applied to the container using a wipe-on process. The labeling head incorporates principal mechanical and electromechanical systems, including an unwind system, web-tensioning and guiding mechanisms, a servo-driven web-advance system, and a spent-liner rewind system, which may be operated via an individual external control interface or connected to a common control system serving multiple heads. The unit is designed to operate in conjunction with a conveyor or other container-handling system that moves the product through the labeling position to complete the application. The conveyor, product-handling systems and controls support, stabilize and coordinate the labeling operation but do not themselves dispense, peel, present, or apply the labels. The systems are constructed from materials sourced from Canada, the United States, Japan, China, Hungary, and South Korea. The Canadian components include minor assembly components and the plastic support for the clear-label sensor. The US components include the labeling heads, clear label sensor kit and connector, plastic labels, routing clamps, washers, leveling pads, tubes, nuts, screws, caps, machine key, couplings, belt, servo, metering belt motor, springs, dowels, brackets, and rubber sheet. The web break sensors are of Japanese origin while the product presence sensor is from Hungary. Chinese components include the labeling junction box, tower light, buzzer, filter assembly and fan, split collar, split miter gear, collar assembly, handle assemblies, collar assemblies, rods, plates, flanges, shafts, knobs, clamps, cable grips, buttons, electric harness, plastic enclosure, caps, pulley assemblies, spacers, timing belt, and roller foam. Finally, the components sourced from South Korea include the dispenser motors, servo, and belt motor. The comprehensive manufacturing process occurs in Canada and begins with the fabrication of machine frames and associated structural elements, the in-house machining of selected components to engineering drawings, and the preparation, fitting, inspection, and adjustment of structural and mounting components. Following this initial phase, workers proceed with assembly and system integration into the final configuration, which involves installing and aligning powered conveyors, guide rails, and product-handling systems; positioning U.S.-manufactured AE-916 MK2 labeling heads on their adjustment assemblies; and integrating side applicators, sensors, safety devices, electrical enclosures, HMIs, and machine controls through complete electrical interconnection and mechanical alignment. Finally, the fully assembled machine undergoes calibration and functional testing at the Canadian facility to verify the coordinated operation of all systems under the intended machine configuration, ensuring that any necessary mechanical, control, or operating adjustments are completed prior to final approval and release for shipment. CLASSIFICATION Section XVI, Note 4, Harmonized Tariff Schedule of the United States (HTSUS), addresses functional units. The note states “Where a machine...consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in chapter 84 or chapter 85, then the whole falls to be classified in the heading appropriate to that function”. The Explanatory Notes state that a “functional unit” covers only those “machines and combination of machines essential to the performance of the function specific to the functional unit as a whole...” In our opinion, the labeling heads, conveyor, Pathfinder product-handling assemblies, TCB, product sensors, roller assemblies, control system, and other components contribute to the clearly defined function of bottle labeling. Therefore, in accordance with Section XVI, Note 4, the applicable subheading for the XP Series inline labeling system will be 8422.30.9120, HTSUS, which provides for “Dishwashing machines; machinery for cleaning or drying bottles or other containers; machinery for filling, closing, sealing or labeling bottles, cans, boxes, bags or other containers; machinery for capsuling bottles, jars, tubes and similar containers; other packing or wrapping machinery (including heat-shrink wrapping machinery); machinery for aerating beverages; parts thereof: Other: Labeling Machines.” The general rate of duty will be free. ORIGIN FOR MARKING Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that unless excepted, every article of foreign origin imported into the United States 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 United States, the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. 1304 was “that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” See United States v. Friedlander & Co., 27 C.C.P.A. 297, 302 (1940). Section 134.1(b), CBP Regulations (19 CFR 134.1(b)), defines “country of origin” 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 the marking laws and regulations. Pursuant to section 102.0, interim regulations, related to the marking rules, tariff-rate quotas, and other United States-Mexico-Canada Agreement (USMCA) provisions, published in the Federal Register on July 6, 2021 (86 FR 35566), the rules set forth in sections 102.1 through 102.18 and 102.20 determine the country of origin for marking purposes with respect to goods imported from Canada and Mexico. Section 102.11 provides a required hierarchy for determining the country of origin of a good for marking purposes, with the exception of textile and apparel goods which are subject to the provisions of 19 CFR 102.21. See 19 CFR 102.11. Applied in sequential order, 19 CFR 102.11(a) provides that the country of origin of a good is the country in which: (1) The good is wholly obtained or produced; (2) The good is produced exclusively from domestic materials; or (3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in Part 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied. Since the subject merchandise is neither “wholly obtained or produced” nor “produced exclusively from domestic materials,” paragraphs (a)(1) and (a)(2) cannot be used to determine the country of origin of the XP Series inline labeling system, then paragraph (a)(3) must be applied to determine the origin of the finished article. As the XP Series inline labeling system is classified under subheading 8422.30, HTSUS, the applicable tariff shift requirement in Part 102.20 for the items under consideration states, in pertinent part: A change to subheading 8422.11 through 8422.40 from any other subheading, including another subheading within that group. The XP Series inline labeling system under consideration herein is made of Chinese, Japanese, Canadian, Hungarian, South Korean and U.S. components. Of significance here is the US-origin NITA AE-916 MK2 pressure-sensitive wipe-on labeling heads that are classifiable under subheading 8422.30, HTSUS. As a result of the foreign status of the labeling heads, the Part 102.20 tariff shift requirement is not met and the origin of the XP Series inline labeling system will be determined under Part 102.11(b), which states, in pertinent part: The country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good. It is the decision of this office that the pressure-sensitive wipe-on labeling head (item AE-616 MK2) is the principal component of the finished subject XP Series inline labeling system. As a result, at the time of importation into the United States, the country of origin of the XP Series inline labeling system, specifically the XP-200T (item #3568), will be the United States for marking purposes. ORIGIN FOR TRADE REMEDIES When determining the country of origin for purposes of applying current trade remedies under Section 301 and additional duties, the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling Letter 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 for trade remedies purposes of the XP Series inline labeling system, it is our opinion that the manufacturing and assembly process performed in Canada does not substantially transform the United States-origin pressure-sensitive wipe-on labeling heads (item AE-616 MK2). While the remaining Chinese, Japanese, Canadian, Hungarian, South Korean and U.S. components are integrated into a fully functioning system in Canada, the primary function (provided by the labeling heads) of the overall system is not transformed into a new article with a name, character and use, different than the individual components. As a result, at the time of importation into the United States, the country of origin of the XP Series inline labeling system, specifically the XP-200T (item #3568), will be the United States for trade remedy purposes, which coincides with the origin of the pressure-sensitive wipe-on labeling heads (item AE-616 MK2). The duties cited above are current as of this ruling’s issuance. 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/. This ruling does not address the applicability of any additional duties, taxes, fees, exactions and/or other charges, which may apply to the goods discussed herein. This includes, but is not limited to, tariffs and other duties as provided for in Subchapter III to Chapter 99, HTSUS. Thus, for example, in addition to the classification stated above, the merchandise covered by this ruling may also need to be reported with either the Chapter 99 provision under which an additional tariff applies or one of the Chapter 99 provisions covering exceptions to such tariffs. For further information to assist with the importation process, please refer to the frequently updated Cargo Systems Messaging Service (CSMS) messages at https://www.cbp.gov/trade/automated/cargo-systems-messaging-service and the Trade Remedies page at https://www.cbp.gov/trade/programs-administration/trade-remedies. 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 Jason Christie at jason.m.christie@cbp.dhs.gov. Sincerely, (for) James P. Forkan Director National Commodity Specialist Division