Newly Released CBP HQ Rulings Dec. 17 - Dec. 20
The Customs Rulings Online Search System (CROSS) was updated between Dec. 17 and Dec. 20 with the following headquarters ruling (ruling revocations and modifications will be detailed elsewhere in a separate article as they are announced in the Customs Bulletin):
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H340157: Internal Advice; Protest No. 1601-24-107165; Transaction Value; Related Party Transactions; Post-Importation Adjustments
| Ruling: Transaction value is the appropriate method of appraisement in respect to sales between the protestant and the related sellers. The protestant may take into account post-importation adjustments to the values of the imported merchandise declared to CBP for the year at issue. |
| Issue: Do the circumstances of the sale establish that the price actually paid or payable by the protestant to its related sellers is not influenced by the relationship of the parties and is acceptable for purposes of transaction value? Is the related party price fixed or determinable pursuant to an objective formula at the time of importation for purposes of determining transaction value? |
| Item: The treatment of certain post-importation adjustments protested by global automotive and industrial supplier Schaeffler Group; refunds due to a decrease in the reported customs values resulting from the protestant’s year-end transfer pricing adjustments in fiscal year 2022 |
| Reason: CBP found that the price between the protestant and the related sellers isn't influenced by the relationship for purposes of the circumstances of the sale test, based on the totality of the information considered and CBP's review and examination of all relevant aspects of the transaction, including the way in which the protestant and the sellers organize their commercial relations and the way in which the price in question was arrived at. As a result, CBP found that transaction value is the proper method of appraisement for the related party transactions. |
| Ruling Date: Oct. 14, 2024 |
H341609: Application for Further Review of Protest No. 3901-24-131277; Classification of Certain Direct Attach Copper Cable Assemblies from China
| Ruling: By application of General Rules of Interpretation 1 and 6, the DACs are classified under 8517.62.00, which provides for, “Telephone sets, including smartphones and other telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528; parts thereof: Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network): Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus.” |
| Issues: Are the DACs properly classified under heading 8517 or heading 8544? |
| Item: Material in Motion's direct attach copper cable assemblies (DACs) from China, which consist of a twin-axial copper cable with two or more small form factor pluggable transceivers terminating the cable at each end |
| Reason: The subject DACs are composite machines, consisting of twin-axial copper cables, along which data is transmitted, and OSFP/QSFP transceivers, which facilitate the transmission of data across the copper cables. The DACs’ principal function is imparted by the OSFP/QSFP transceivers. Although the transceivers do not contain optical-to-electrical circuit components, they convert binary logic signals to PAM4 signals for transmission across the copper cable media, while also generating signals to communicate with the host network device. Therefore, OSFP/QSFP transceivers not only facilitate the transmission of data across the copper cable media but are required for any signal transmission to occur. |
| Ruling Date: Oct. 21, 2024 |
H305598: Tariff classification and application of Section 301 trade remedy of corrugating systems
| Ruling: By application of GRIs 1 and 6, the subject corrugated system, when entered in its entirety, is classified in heading 8441, and is specifically provided for in subheading 8441.80, which provides for “Other machinery for making up paper pulp, paper or paperboard, including cutting machines of all kinds, and parts thereof: Other machinery.” Based on the facts of this case, the corrugated system at issue is not subject to Section 301 duties. |
| Issues: What is the tariff classification of the corrugating system? Do Section 301 duties apply to the corrugating system? |
| Item: BHS Corrugated North America's corrugating systems and the applicability of Section 301 duties to certain components of these systems. BHS’s corrugating system consists of individual machines designed to produce stacks of corrugated board from reels of paper. |
| Reason: CBP agreed with the protestant that the reel stand and splicer are classified in subheading 8441.80.80. As for the pre-heater, the heating of the paper is needed to form the flutes and enables the paper layers to be bonded to each other. As this process appears to be part of the paper making process, the pre-heater is classified in 8419.89.10, which provides for “other” machinery, plant or equipment for making paper pulp, paper or paperboard. As for Section 301 duties, the reel stand, splicer, and preheater, would be subject to additional 25 percent ad valorem duties because they are from China. However, the protestant noted that because the reel stand, splicer, and preheater are components of a Note 4 to Section XVI functional unit, they are not subject to Section 301 duties even though they are made in China. Furthermore, all the components are combined in Germany for shipment to the U.S. As the corrugating system is a functional unit under Note 4 to Section XVI, each of its components contributes to a clearly defined function. As a result, CBP must classify the corrugating system in its entirety. As the reel stand, splicer, and preheater are combined in Germany and shipped from Germany, they are not subject to 301 duties when imported in a single shipment of the corrugated system. |
| Ruling Date: Dec. 18, 2024 |
H342569: Tariff classification of reusable transport tanks
| Ruling: By application of GRI 1, the 120-liter and 300-liter transport tanks are classified in heading 8609, specifically in subheading 8609.00.00, which provides for “Containers (including containers for the transport of fluids) specially designed and equipped for carriage by one or more modes of transport.” |
| Issues: Are the reusable tanks classified under heading 7309, heading 7310, heading 8419 or heading 8609? |
| Item: The tariff classification of 120-liter and 300-liter reusable transport tanks primarily used to repeatedly transport liquid drug materials and medicines. The tanks may also be used to store such substances, or they may be shipped empty between global manufacturing sites, ports of destination, and storage facilities. The tanks have liquid capacities of 120 liters and 300 liters. |
| Reason: These containers (including lift vans) are packing receptacles specially designed and equipped for carriage by one or more modes of transport (e.g., road, rail, water or air). They are equipped with fittings (hooks, rings, castors, supports, etc.) to facilitate handling and securing on the transporting vehicle, aircraft or vessel. They are thus suitable for the “door to door” transport of goods without intermediate repacking and, being of robust construction, are intended to be used repeatedly. The instant transport tanks are packing receptacles specially designed for carriage by certain modes of transport. For the 120-liter tanks, they are wheeled directly onto trucks or into other containers via integrated heavy-duty casters attached to the bottom of the tanks. Similarly, the 300-liter tanks are lifted and moved using integrated forklift skid channels attached to the bottom of the tanks. Both tanks contain substantial side handles that serve as anchor points for tie-down straps that secure the tanks once loaded onto transit containers. For these reasons, CBP found that the subject tanks are described by heading 8609, as “Containers (including containers for the transport of fluids) specially designed and equipped for carriage by one or more modes of transport.” |
| Ruling Date: Dec. 19, 2024 |