Newly Released CBP HQ Rulings July 28
The Customs Rulings Online Search System (CROSS) was updated on July 28 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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H332934: Application for Further Review of Protest No. 3901-16-100266; United States-Singapore Free Trade Agreement; General Note 25 of the HTSUS; Microscopes
| Ruling: The M720 OH5 stereoscopic surgical microscope does not qualify for duty-free, preferential tariff treatment under the United States-Singapore Free Trade Agreement (US-SFTA) and was properly liquidated at a duty rate of 7.2% ad valorem. |
| Issue: Whether the microscope at issue is eligible for preferential tariff treatment under the US-SFTA. |
| Item: Leica Microsystems' imports of the M720 OH5 stereoscopic surgical microscope. |
| Reason: CBP looked at whether the goods qualify as originating under General Notes 25(b)(iii), HTSUS. The merchandise may have been applicable if it satisfied a requirement for a regional value content (RVC) of not less than 35% based on the build-up method or 45% based on the build-down method. In this case, CBP’s audit revealed that Leica’s calculation of the RVC for the microscope had been performed using standard costs based on actual costs for the microscope from the previous year. Leica provided no actual costs to CBP that contradicted the audit findings. Once CBP reviewed the actual costs associated with the production of the microscope, the costs were lower for each of the subassemblies involved in production. In addition, the manufacturing costs associated with one of these subassemblies, an optics carrier — consisting of direct material, direct labor, and manufacturing overhead — was also reviewed and found to be lacking support. CBP then used the actual costs of the subassemblies, supported by internal information from Leica, and found that the microscope had an RVC of 31.46% using the build-down method and 34.61% using the build-up method. Because the RVC requirement found in GN 25(o), rule 34(B) has not been satisfied, the goods do not qualify as originating. |
| Ruling Date: April 18, 2025 |
H346403: Articles for the handicapped; Subheading 9817.00.96; Quilted Bonded Fabric
| Ruling: The quilted bonded fabric is not eligible for duty-free treatment under subheading 9817.00.96. CBP affirms NY N344168 on this issue. |
| Issue: Whether to reverse the ruling of NY N344168, dated Dec. 19, 2024, which had denied duty-free treatment under subheading 9817.00.96 to the quilted bonded fabric. |
| Item: Cooley Group Holdings' quilted bonded fabric, which is ultimately used in the production of finished incontinence bed pads. |
| Reason: In NY N344168, CBP held that, because the imported product could have a myriad of uses at the time of importation, the quilted bonded fabric was not eligible for duty-free treatment under subheading 9817.00.9. In understanding General Rules of Interpretation (GRI) 2(a), the Harmonized Commodity Description and Coding System Explanatory Notes, unfinished articles can qualify for duty-free treatment under subheading 9817.00.96, but the article must have the essential character or essential shape of the qualifying, finished article. In this case, CBP does not believe that the identity of the bed pads for the use of the handicapped can be seen emerging with certainty from the undifferentiated material. Here, the fabric must be cut to shape, the edges must be finished, and labels must be stitched to the product. CBP also believes that prior rulings brought forth by Cooley are not contradictory because they deal with finished incontinence products, not unfinished rolls like those at issue in the present case. The analysis in this case turns on whether the quilted bonded fabric has the essential character or shape of the finished bed pads. In making this determination, CBP only needs to analyze the state of the quilted bonded fabric as it is imported. |
| Ruling Date: July 18, 2025 |
H336382: Apportionment of Assists
| Ruling: The company’s proposed methodologies for the valuation and apportionment the non-U.S. research and development assists and equipment assists are acceptable under 19 U.S.C. § 1401a(b) and 19 C.F.R. §§ 152.102(a) and 152.103. |
| Issue: Whether the proposed methodologies for the apportionment of the non-U.S. R&D and equipment assists are acceptable under 19 U.S.C. § 1401a(b) and 19 C.F.R. §§ 152.102(a), 152.103, and 159.31. |
| Item: The apportionment of certain research and development and equipment assists that the unnamed company, a U.S. importer and distributor of footwear, apparel and accessories, will provide to foreign manufacturers |
| Reason: CBP believes the company’s proposed apportionment method is acceptable under the Generally Accepted Accounting Principles (GAAP) and is therefore allowed under 19 C.F.R. § 152.103(e) and 19 U.S.C. § 1401a. As in HQ H299185, the company will determine the amount of non-U.S. research and development applicable to U.S. imports by calculating the ratio of U.S. import purchases to global purchases for the entire fiscal year. Further, because the company intends to continue applying the uplift factor until the prior year’s assist value is fully declared if there is a balance remaining at the end of the year-long period, CBP is satisfied that the amount of the assists will be fully covered using this method. Therefore, the proposed apportionment method is reasonable. |
| Ruling Date: July 18, 2025 |
H338716: Country of Origin and USMCA Eligibility of Integrated Thermal Management System for Passenger Vehicle or Light Truck; De Minimis; Section 301 Measures
| Ruling: The subject merchandise qualifies as USMCA-originating goods and will be eligible for preferential tariff treatment under the USMCA, provided that all other applicable requirements are met. Because a substantial transformation occurs in Mexico, the merchandise is a product of Mexico for purposes of Section 301 measures. |
| Issue: Whether the ITMS is eligible for USMCA preferential tariff treatment under the USMCA when imported from Mexico into the United States. What is the country of origin of the ITMS for purposes of Section 301 measures? |
| Item: The country of origin of an Integrated Thermal Management System (“ITMS”) for purposes of Section 301 measures and the eligibility of the merchandise for preferential tariff treatment under the United States-Mexico-Canada Agreement. The ITMS at issue is described as a multi-port manifold box containing centrifugal pumps for driving fluid and electronically actuated spider valves for regulating and directing cooling fluid. The ITMS is used in electric vehicles to maintain the battery at the appropriate temperature, ensuring maximum performance. |
| Reason: Although neither the transaction value nor the total cost of the good was provided, the bill of materials indicates that the non-originating material that failed to meet the required tariff shift represents less than 1.59% of the total value of materials used in the production of the good. As both the transaction value and the total cost incorporate costs in addition to the total value of materials used in the production of the good, the percentage would therefore be lower than 1.59% under either method. Accordingly, the goods qualify as originating under GN 11(e)(i) and will be eligible for USMCA preferential tariff treatment, provided all other applicable requirements are met. As for the country of origin, the manufacturing of the manifold subassembly and the three valve subassemblies, and the subsequent assembly into the finished ITMS units, results in an article with a new name, character, and use. As in H303866, this case involves complex and meaningful assembly operations that include injection molding, hot-plate welding, and ultrasonic welding. The assembly operations incorporate more than 100 different materials and numerous sophisticated manufacturing operations on automated production lines. Moreover, as a result of this process, the individual materials lose their separate identities and become integral parts to the new article — namely, the ITMS. |
| Ruling Date: July 21, 2025 |
H305273: Tariff Classification of Unfinished Fiberglass Fish Blanks from China
| Ruling: By application of GRIs 1, 2(a) and 6, the subject merchandise is classified in heading 3926, and specifically in subheading 3926.40, which provides for “Other articles of plastics and articles of other materials of headings 3901 to 3914: Statuettes and other ornamental articles.” |
| Issue: Whether the subject merchandise is classified in heading 3926, as other plastic articles, or in heading 9023, as demonstrational instruments. |
| Item: Unfinished fiberglass fish blanks from China. They are highly realistic, anatomically correct replica of specific marine species, created to full scale and built for public display and decorative appeal. |
| Reason: The unfinished fish blanks are display pieces that serve as a visual enhancement in a public or commercial setting rather than a demonstrational or teaching device. Therefore, the unfinished fish blanks are not classifiable in heading 9023. The subject unfinished fish blanks are constructed of fiberglass and epoxy resin, and they are decorative and commercial articles made of plastic. Heading 3926 provides for in relevant part “other articles of plastics” and subheading 3926.40 provides for “[s]tatuettes and other ornamental articles.” Since the unfinished fish blanks are plastic display fish used in commercial establishments, they are classifiable in subheading 3926.40. Also, after importation to the United States, the subject unfinished fish blanks are hand-finished and painted by marine artists. Per GRI 2(a), CBP concludes that the unfinished fish blanks have the essential character of finished fish blanks. |
| Ruling Date: July 24, 2025 |