Newly Released CBP HQ Rulings for Sept. 9
The Customs Rulings Online Search System (CROSS) was updated Sept. 9 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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H319586: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. §§ 10.41a(a)(1), 10.41a(a)(2); HTSUS subheading 9803.00.50; CFR Rinkens, LLC; steel container assemblies; accessories
| Ruling: The assemblies are not IITs, nor do they qualify as accessories of IITs. |
| Issue: Whether the subject SKD Assemblies are IITs or accessories of IITs |
| Item: Steel assemblies called the SKD Assembly, which are used to efficiently store and secure semi- knock-down (SKD) or partially assembled vehicles in shipping containers for exportation from the United States. They consist of four vertical posts and a moveable wheeled dolly on which the vehicle chassis and/or body are mounted. Once inside the container, each post is individually secured to the side of the container by the top side rail lashings and to the floor by either nailing/screwing or ratchet and webbing. They are used in over 11,000 shipments and average four 90-day circulations per year, and have a lifespan of ten to fifteen years. |
| Reason: The subject SKD Assemblies do not hold or contain merchandise independent of the shipping containers in which they are transported. Instead of holding or containing cargo, the SKD Assemblies are used to move auto parts into a shipping container and to secure these parts within the container. As a result, we find that the SKD Assemblies are not substantial holders or containers, and cannot be classified as IITs. The SKD Assemblies, which are used to secure merchandise within a shipping container, also are not accessories to IITs because they do not hold or contain the merchandise independently of the container.. |
| Ruling Date: Aug. 26, 2021 |
H315297: Country of origin of an Automotive Manual Cushion Frame; Section 301 trade remedy; USMCA Marking
| Ruling: The country of origin of the automotive manual cushion frame is Mexico for both Section 301 tariff purposes and for marking purposes. |
| Issue: The country of origin of the automotive manual cushion frame for the purposes of applying Section 301 trade remedies, as well as for marking purposes |
| Item: An automotive manual cushion frame produced from 42 to 46 components under five different sourcing scenarios. In each scenario, assembly will take place in Mexico from components of Mexican and Chinese origin. |
| Reason: While the assembly of the various components of Chinese origin will not not alter the shape of the components, the Chinese origin components alone will be insufficient to create the automotive manual cushion frame and a majority of the components in each scenario will be of Mexican origin. When combined with the Mexican components, the Chinese components will lose their individual identities and become an integral part of automotive manual cushion frame. The relatively minor Chinese components will be substantially transformed by the processing in Mexico and the country of origin of the automotive manual cushion frame in all production scenarios will be Mexico for purposes of Section 301 remedies. For marking purposes, the country of origin of the automotive manual cushion frame is the last country in which the goods underwent production. The operations performed in Mexico constitute production. |
| Ruling Date: Aug. 25, 2021 |
H307026: Application for Further Review and Protest No. 0712-19-100276; Valuation of apparel
| Ruling: Appraisement of the merchandise should be based upon the deductive value. |
| Issue: The proper basis of appraisement for the transaction between GDI and GRG. GRG declared a total entered value of $130,324 and duty amount of $18,757.73. In April 2019, CBP found that the related party sales price was not an acceptable transaction value. CBP advanced the value of the merchandise at liquidation at a value approximating the merchandise’s U.S. retail sale price and calculated a duty amount of $82,909.23. GRG is protesting this decision arguing that the subject merchandise should be valued according to the sales price between GRG and GDI or, alternatively, under the deductive value method. |
| Item: Apparel that GRG purchased from GDI and imported from Canada to the United States in July 2018. GRG states that it bought the merchandise from GDI on Ex-Works sales terms. The merchandise was shipped from Montreal and entered the United States through the Port of Champlain, New York destined for various GRG retail stores across the country. GRG states that GDI and GRG have entered into an Inventory Supply Agreement that serves as an overarching supply contract between the parties. |
| Reason: The sale from GDI to GRG was not a bona fide sale for exportation. Under the terms of the Inventory Supply Agreement, GRG could not make any decisions about what product to order or how much. Nor could GRG purchase from any supplier other than GDI. GRG was also not free to select downstream customers. Additionally, GDI was heavily involved with determining the final sales price to the U.S. customer. Finally, although GRG stated that the profit margin in sales between the parties was negotiated, GRG was not able to provide documentation on the negotiations of the profit margin in sales from GDI to GRG. However, the subject merchandise also cannot be valued at the price paid by the U.S. retail customers. Since the sales to the U.S. retail customers occur after importation, they are not sales for export to the United States. |
| Ruling Date: July 2, 2021 |