Newly Released CBP HQ Rulings for June 28 - July 21
The Customs Rulings Online Search System (CROSS) was updated June 28 - July 21 with the following headquarters rulings (ruling revocations and modifications will be detailed elsewhere in a separate article as they are announced in the Customs Bulletin):
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H332753: Internal Advice: Apportionment of Merchandise Processing Fees on Direct Identification Drawback Claims
| Ruling: Merchandise processing fees (MPFs) are to be calculated and apportioned at the entry summary line level whether the drawback claim is based upon direct identification or substitution. |
| Issue: Are merchandise processing fees to be calculated and apportioned at the entry summary line level for direct identification drawback claims? |
| Item: There was disagreement between CBP's Petroleum, Natural Gas, and Minerals Center of Excellence and Expertise (PNGM) and certain members of the trade community as to the proper way drawback claimants should calculate the refund of MPFs. PNGM believes that apportionment is made at the entry summary line item level (e.g., CBP Form 7501 or its electronic equivalent) and that such an apportionment methodology applies no matter whether the drawback claim is pursuant to direct identification or substitution. Certain trade community members assert that apportionment should occur at the invoice line item level for direct identification drawback claims (e.g., 19 U.S.C. §§ 1313(a) and 1313(j)(1)) and apportionment should occur at the entry summary line level for substitution drawback claims. |
| Reason: 19 C.F.R. § 190.51(b)(2) requires drawback claimants to calculate and apportion MPFs at the entry summary line level, whether the claim is direct identification or substitution. CBP has the authority to require the apportioning of MPFs at the entry summary line level and that apportionment is necessary to ensure that MPFs are not over-refunded. The MPF apportionment calculation regulations also set MPF calculations apart from the calculation of all other fees. Although the MPF regulations only refer to “line item,” CBP has been consistent throughout its regulations to use the term “line item” when referencing the entry summary line. For all these reasons, MPFs are to be calculated and apportioned at the entry summary line level whether the drawback claim is based upon direct identification or substitution. |
| Ruling Date: May 20, 2024 |
H304679: Country of Origin of LED Light Sets; Marking
| Origin: China |
| Issue: Is the country of origin Cambodia for marking purposes? |
| Item: Miniature LED Light Sets, which will be used for Christmas decorations. Most of the components/materials used in producing them are of Chinese origin, including LED light bulbs, shrink sleeves, copper clips, color boxes, switches and integrated circuits. The main components of Cambodian origin are the battery/control boxes and electric wires. The label and instruction manual are also of Cambodian origin. |
| Reason: None of the components of the subject LED Light Sets are substantially transformed by the assembly operation in Cambodia. The components of all four LED Light Sets have a pre-determined end-use as parts and components of the light sets when imported into Cambodia. Additionally, the assembly process is quite simple, involving only connecting and cutting of components. |
| Ruling Date: June 11, 2024 |
H272806: Application for Further Review of Protest 3401-15-150003; CHS, Inc.; Merchandise Processing Fees; Pipeline
| Ruling: As the monthly consolidated entry program is optional, if CHS chooses to not participate or is unable to participate because of the practices of Front Range, CHS is required to file daily entries and daily merchandise processing fees (MPFs) are owed. |
| Issue: Should MPF be assessed on a monthly, rather than a daily basis, for imports of crude oil on a continuous stream pipeline? |
| Item: CHS is the importer of record for crude oil imported into the United States from Canada on the Front Range Pipeline. In most instances, CHS is the end-user of the imported oil. CHS files entry at the Port of Pembina for crude oil deliveries. CHS filed the entries at issue either once or twice a month between February and October 2014. CHS’s entries were liquidated between March and July 2015. CHS asserts that because of the nature of the continuous stream pipeline, it entered the crude oil once for a month’s worth of flow for the entries at issue and, accordingly, should only be subject to one MPF for each month-long entry. |
| Reason: The date of importation is “the date on which the merchandise arrives within the Customs territory of the United States.” 19 C.F.R. § 101.1. The date upon which the crude oil from a continuous stream pipeline arrives within the U.S. Customs territory is daily or each day. Thus, CBP’s statutory and regulatory provisions dictate that daily entries are required for the daily importation of crude oil into the Customs territory of the United States. Because MPFs are due upon the entry of merchandise, CBP properly assessed MPFs on a daily basis. |
| Ruling Date: May 14, 2024 |
H331939: U.S. Government Procurement; Title III, Trade Agreements Act of 1979 (19 U.S.C. § 2511); Subpart B, Part 177, CBP Regulations; Country of Origin of DisplayPort Male to Female Adapter
| Origin: Taiwan |
| Marking: Taiwan |
| Issue: What is the country of origin of the DisplayPort male to female adapter for purposes of U.S. Government procurement? What is the proper country of origin marking of the imported DisplayPort male to female adapter? |
| Item: Aegis imports a “DisplayPort male to female adapter”, which is an eight-inch-long video converter. The adapter is used to connect a desktop or laptop computer with a video graphics array (“VGA”) compliant monitor or television, converting signals transmitted between the computer and the monitor. You state that the adapter has one DisplayPort male connector (source signal input), one printed circuit board assembly attached to a VGA female connector (PCBA/signal output), and one eight-inch-long cable. The adapter manufacturing process consists of two phases: (1) printed circuit board assembly (“PCBA”) production in Taiwan, and (2) final assembly in China. |
| Reason: It is the PCBA that enables the device to function as a connector, and, therefore, it imparts the character of the subject device. The processing in China, which consists of wire cutting, stamping, fitting, and visual inspection, is not sufficiently complex and meaningful to result in a substantial transformation. Instead, as described above, the components added in China consist of casing and wires used to facilitate the functions performed by the PCBA. |
| Ruling Date: June 27, 2024 |
H339732: Ruling Request; U.S. International Trade Commission; General Exclusion Order; Investigation No. 337-TA-1155; Certain Luxury Vinyl Tile and Components Thereof.
| Ruling: VILOX has met its burden to show that the articles at issue aren't subject to the 1155 GEO |
| Issue: Has VILOX met its burden to show that the articles at issue do not infringe on the relevant claims of the ‘460 patent; the ‘490 patent; and the ‘655 patent, and thus are not subject to the 1155 GEO? |
| Item: VILOX requested a ruling from CBP that VILOX-licensed luxury vinyl using an angle-angle interlocking method and made of stone polymer composite doesn't violate a Section 337 general exclusion order. |
| Reason: See ruling. |
| Ruling Date: June 11, 2024 |
H326891: Application for Further Review of Protest No. 130322103681; Green Food Ingredients LLC; “First Sale” Appraisement; Multi-Tiered Transaction
| Reason: The circumstances relating to the purported sale between Jinxiang and Green Food, and the level of documentation provided, are not indicative of a transfer of title and risk of loss between Jinxiang and Green Food. Instead, all information and documents presented, as well as the findings of Regulatory Audit, lead us to conclude that the bona fide sale for exportation to the United States for customs purposes occurred between Jinxiang and the U.S. end customer, McCormick. Therefore, Green Food may not use the related-party price between itself and Jinxiang as the transaction value for the merchandise. The proper method of valuation of the subject entry is the transaction value between Green Food and its unrelated U.S. buyer, McCormick. The transaction value shall include a deduction for the actual amount of duties paid upon entry. |
| Issue: Was there a bona fide sale between Jinxiang and Green Food? What is the proper method of appraisement for the imported merchandise? |
| Item: Green Food is a U.S. importer of dehydrated garlic from China. Green Food, along with a related company that is not the subject of this protest, Lunong Ingredients LLC, imported dehydrated garlic from two related Chinese sellers, Jinxiang Lunong Agricultural Trading Co., LTD. and Shandong Lunong Food Technology Co., LTD. The importations that are the subject of this protest and AFR were sold by Jinxiang. Both Jinxiang and Shandong are owned/affiliated to an owner of Green Food. The subject merchandise was sold and shipped directly to McCormick & Co. (“McCormick”), an unrelated party, or to a warehouse designated by McCormick. |
| Reason: The use of identical terms of sale in both sets of invoices (i.e., those issued by Jinxiang to Green Food and Green Food to McCormick) suggests that there is only one sale, namely that between Jinxiang and the ultimate U.S. customer, McCormick. In addition, both sets of invoices (i.e., between Jinxiang and Green Food, and Green Food and McCormick) share the same format and dates (both issued July 23, 2018), which further corroborates a finding that the title and risk of loss passed instantaneously. |
| Ruling Date: May 29, 2024 |
H327577: Application for Further Review of Protest No. 300422101621; SIPCO Innovations Inc.; USMCA Preference Eligibility for Plant Fertilizer Amendment; Section 301 Trade Remedy
| Ruling: The imported Hyshield fertilizer amendment classified under 3913.90.20 does qualify for preferential tariff treatment under the USMCA. The country of origin for marking purposes is nevertheless China. Furthermore, the country of origin for purposes of Section 301 is Canada and, therefore, Section 301 remedies do not apply. |
| Issue: What is the proper classification of the imported fertilizer amendment under the Harmonized Tariff Schedule of the United States? Does the imported fertilizer amendment qualify for preferential tariff treatment under the USMCA? What is the proper country of origin marking of the imported fertilizer amendment? Did CBP properly assess Section 301 Trade Remedy Duties on the imported fertilizer amendment? |
| Item: Hyshield, “plant fertilizer amendment” used in agricultural and horticultural applications that improves fertilizer and nutrient efficiency. Chinese-origin chitosan is imported in flake form, and is derived from chitin, which is obtained from the exoskeletons of shellfish, including shrimp, lobsters, or crabs. SIPCO purchases the chitosan from a U.S. supplier based in Bellingham, Washington. The Hyshield is produced in Canada via a proprietary process in which the chitosan flakes are combined with various Canadian-origin inputs to create the liquid Hyshield. Lctic or citric acid is added to the chitosan flakes, which causes an acid-base reaction that forms a zwitterion ion with the carboxyl group of the lactic or citric acid. As a result of this acid-base reaction, the imported chitosan’s amino group changes from NH2 to a charged +NH3 in the finished product. This enables the chitosan to be soluble in water. Following this, the Canadian ingredients including water, citric acid, lactic acid, and potassium benzoate, are blended with the chitosan liquid and then filtered to create Hyshield. |
| Reason: A good of chapter 39 through 40 that results from a chemical reaction in the territory of one or more of the USMCA countries shall be treated as an originating good. As such, Hyshield, which is a good under chapter 39, is the product of a chemical reaction occurring in Canada and therefore satisfies the alternate rule of origin. For marking, however, the imported chitosan doesn't undergo the applicable tariff shift. |
| Ruling Date: May 8, 2024 |
H338253: Ruling Request; U.S. International Trade Commission; Limited Exclusion Order; Investigation No. 337-TA-1266; Certain Wearable Devices with ECG Functionality and Components Thereof
| Ruling: Apple Inc. has met its burden to show that certain redesigned wearable devices don't infringe one or more of claims 12, 13, and 19-23 of U.S. Patent No. 10,638,941 (“the ’941 Patent”) and claims 1, 3, 5, 8-10, 12, 15, and 16 of U.S. Patent No. 10,595,731 (“the ’731 Patent). Thus, the articles at issue are not subject to the limited exclusion order that the U.S. International Trade Commission issued in Investigation No. 337-TA-1266. |
| Issue: Has Apple met its burden to show that the articles at issue don't infringe on the ’731 or ’931 patents, and thus are not subject to the limited exclusion order issued in the 1266 investigation. |
| Item: This ruling analyzes whether the articles at issue, in their present condition as described in the proceeding, satisfy the relevant claim limitations, the ability for post-importation modification leads the EOE Branch to the view that a certification, pursuant to paragraph 5 of the 1266 LEO, is warranted should the Commission lift suspension on enforcement of the limited exclusion order. While the complainant AliveCor is on notice, as provided in this ruling, regarding the use of a certification if the Commission lifts suspension on the exclusion order’s enforcement, the EOE Branch considers it appropriate for AliveCor to have an opportunity to participate in the drafting process for the proposed certification, with specific procedures established when and if the Commission lifts the suspension. |
| Reason: Apple has met its burden to establish that the articles at issue do not infringe any of claims 12, 13, and 19-23 of the ’941 patent or claims 1, 3, 5, 8-10, 12, 15, and 16 the ’731 patent. Accordingly, the articles at issue are not subject to the LEO issued as result of Investigation No. 337-TA-1266. Entry for consumption into the United States, entry for consumption from a foreign trade zone, or withdrawal from a warehouse for consumption of the articles at issue, however, is conditioned on the drafting and submission of a certification, as provided for in this ruling, that would take effect should the Commission lift the suspension on enforcement of the limited exclusion order. |
| Ruling Date: June 20, 2024 |
H328859: U.S. Government Procurement; Title III, Trade Agreements Act of 1979 (19 U.S.C. 2511); Subpart B, Part 177; Brother Mobile Solutions, Inc.; Country of Origin of Mobile Thermal Printers; Substantial Transformation
| Origin: China |
| Issue: What is the country of origin of the subject thermal printers for purposes of U.S. government procurement? |
| Item: Five separate models of thermal printers described as the Brother PocketJet 8 Mobile Thermal Printers. The assembly process for the thermal printers is the same, though the devices differ in type of interface (i.e., USB, Bluetooth, or Wi-Fi) and resolution (either “standard resolution” at 203 dots per inch (“DPI”) or “high resolution” at 300 dots per inch). |
| Reason: CBP found that the mechanical printing functions are imparted by the Chinese-origin components. The present scenario is analogous to past proceedings where the imported material did not undergo a substantial transformation and where the manufacture of the upper, just like the many Chinese printer components in the Brother thermal printers, provided the character to the finished article. |
| Ruling Date: June 10, 2024 |
H332752: U.S. Government Procurement; Title III, Trade Agreements Act of 1979 (19 U.S.C. 2511); Subpart B, Part 177, CBP Regulations; Country of Origin of UPanelS Products
| Origin: Taiwan |
| Issue: What is the country of origin of the subject thermal printers for purposes of U.S. government procurement? |
| Item: Unilumin imports various models of “high-performance [LED] display[s]” sold under the UPanelS product line. The UPanelS product line consists of a series of display units capable of producing high-definition video or photographic images differentiated primarily by pixel pitch. Each UPanelS consists of two major sub-assemblies: a “module board” and a “cabinet housing.” The module board drives and controls each LED unit, forming images for display. The cabinet encases the device and provides the power supply function. |
| Reason: The assembly of the main printed circuit board assembly (PCBA) in Taiwan results in a substantial transformation. The SMT and curing processes incorporate a large number of discrete component parts onto a printed circuit board, which is a sufficiently complex and meaningful operation so as to result in a substantial transformation of the parts making up the PCBA. A variety of electronic components are added to the raw PCB via SMT in Taiwan to create the subject PCBAs. The PCBA enables the device to distribute power to the LED lamps and therefore imparts the character of the subject device. The processing in China, which consists of installing and attaching the subassemblies together for testing, is not sufficiently complex and meaningful to result in a substantial transformation. |
| Ruling Date: June 10, 2024 |
H339291: Instruments of International Traffic; 19 U.S.C. § 1332(a); §§ 10.41a(a)(1), 10a(a)(2); Sakuma International Inc.; Returnable Pallets, Totes, and Trays.
| Ruling: The subject pallets, totes, and trays qualify for treatment as instruments of international trade (IIT) within the meaning of 19 U.S.C. § 1322(a) and § 10.41a(a)(1). |
| Issue: Do the subject pallets qualify for consideration as IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1)? Do the subject totes qualify for consideration as IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1)? Do the subject trays qualify for consideration as IIT within the meaning of 19 U.S.C. § 1322(a) and 19 C.F.R. § 10.41a(a)(1)? |
| Item: There are three subject items: pallets totes, and trays. These subject items are designed to be responsive to the production needs of Sakuma. Sakuma plans to pack automative parts in the subject items and deliver them to its Sakuma International subsidiary in the U.S. Each tote will contain eight trays that will secure multiple individual parts. Approximately 36 totes will be placed and strapped on each pallet before shipping. Once the pallets and totes are broken down and empty, Sakuma International USA will deliver the automotive parts to its U.S. customers, and they will export the pallets, totes, and trays back to Japan to be re-used for the same process. Sakuma anticipates a rotating inventory of approximately 200 to 400 pallets, 5,000 to 8,000 tote boxes, 20,000 trays, and 20,000 lids will be in circulation. The average lifespan of the subject items is five to seven years. |
| Reason: Pallets have already been designated as an instrument of international traffic by regulation. The subject totes and trays are containers that are substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic. They are substantial in that they are made of plastic and the component parts have an average lifespan of five to seven years. They are used in significant numbers in international commerce, and suitable for and capable of reuse in that three to five shipments are anticipated per month. |
| Ruling Date: July 1, 2024 |
H331999: Internal Advice Request; Classification of stainless steel and zinc panels
| Ruling: (1) 7308.90.9590, 9903.88.02, free + 25%, “Structures (excluding prefabricated building of heading 9406) and parts of structures … of iron or steel; plates, rods, angles, shapes, sections, tubes and the like, prepared for use in structures, of iron or steel: Other: Other: Other: Other: Other.” (2) 7907.00.6000, 9903.88.03, 3% + 25%, “Other articles of zinc: Other.” |
| Issue: (1) Are the subject stainless steel panels classified in subheading 7308.90.9560 as “Structures (excluding prefabricated building of heading 9406) and parts of structures … of iron or steel; plates, rods, angles, shapes, sections, tubes and the like, prepared for use in structures, of iron or steel: Other: Other: Other: Other: Architectural and ornamental work”; in subheading 7308.90.9590 as “Structures (excluding prefabricated building of heading 9406) and parts of structures … of iron or steel; plates, rods, angles, shapes, sections, tubes and the like, prepared for use in structures, of iron or steel: Other: Other: Other: Other: Other”; or in subheading 7610.90.0080, as “Aluminum structures (excluding prefabricated buildings of heading 9406) and parts of structures (for example, bridges and bridge-section, towers, lattice masts, roofs, roofing frameworks, doors and windows and their frames and thresholds for doors, balustrades, pillars and columns); aluminum plates, rods, profiles tubes and the like, prepared for use in structures: Other: Other: Other.”? (2) Are the subject zinc panels classified in subheading 7610.90.0080 as “Aluminum structures (excluding prefabricated buildings of heading 9406) and parts of structures (for example, bridges and bridge-section, towers, lattice masts, roofs, roofing frameworks, doors and windows and their frames and thresholds for doors, balustrades, pillars and columns); aluminum plates, rods, profiles tubes and the like, prepared for use in structures: Other: Other: Other”; in subheading 7905.00.0000 as “Zinc plates, sheets, strip and foil”; or in subheading 7907.00.6000, as “Other articles of zinc: Other.”? |
| Item: Stainless steel and zinc panels used as building materials for Overgaard’s School of Music (“SOM”) project. (1) The stainless steel panels at issue are bent stainless steel panels with small aluminum clips attached. The aluminum clips connect the panels together and are not themselves structural aluminum components. Some of the stainless steel panels include small aluminum supports. The stainless steel panels make up a portion of the final SOM project that is beneath the window curtain wall or above the curtain wall. The stainless steel panels are independent of the curtain wall and are not connected to it. Based on the commercial invoices, the stainless steel portion of the panels predominates over the aluminum portion by value and by weight. (2) According to Overgaard’s submission, the zinc panels are made from zinc sheets from Germany that are sent to China to be cut and bent. Extruded aluminum brackets/clips are then added to the back of the panels in China. The zinc panels include a zinc lip around some or all of the outer edges. These panels are rainscreen wall panels and are described as individual panels that connect to a solid concrete wall, and not to one another. |
| Reason: Because the stainless steel and zinc panels are composite goods, they are classified under GRI 3(b), as if they consisted of the material or component which gives them their essential character. Additionally, note 7 to section XV provides that composite articles of base metal containing two or more base metals are to be treated as articles of the base metal predominating by weight over each of the other materials. Here, the stainless steel component of the stainless steel panels, and the zinc component of the zinc panels, predominate by weight and value over the aluminum component. According to the submitted documentation, the stainless steel or zinc is the facing material, and the aluminum components serve only supporting roles in attaching the stainless steel panel to the concrete wall behind it. |
| Ruling Date: April 25, 2024 |