H312891

 HQ H312891 October 14, 2021 OT:RR:CTF:FTM H312891 JER CATEGORY: Origin Mr. C. J. Erickson Cowan, Liebowitz & Latman, P.C. 114 West 47th Street New York, NY 10036 RE: Country of Origin of Catalytic Converter Assemblies; Marking; Section 301 Trade Remedy; 9903.88.01 Dear Mr. Erickson, This is in response to your correspondence, dated July 15, 2020, in which you request a binding ruling, on behalf of your client, Cateran, Inc. (“Cateran”), concerning the country of origin of certain catalytic converter assemblies imported from Canada into the United States. Your request, submitted as an electronic ruling request, was forwarded to this office from the National Commodity Specialist Division for review. Our ruling is set forth below. FACTS: The merchandise consists of three catalytic converter assemblies: Model Number 53263, Model No. 33208 and Model No. 33016. The catalytic converters are emission control devices that convert toxic gases and pollutants in exhaust gas to fewer toxic pollutants by catalyzing a redox reaction. Each of the three catalytic converters consists of a monolithic core and component parts which complete the assembly. The monolithic core is made up of a ceramic substrate and precious metals. The structure of the monolithic core includes thousands of channels (or holes) which act as filtration for converting automobile gases and emissions into non-toxic substances. Model No. 53263 features a catalytic converter housing (which houses the monolithic core), a cast iron outlet, a cast iron inlet, outlet flanges and gasket and bolt accessories. Model No. 33208 features a catalytic converter housing (which houses the monolithic core) with a heat shield which is wrapped around the catalytic converter housing, a conical end on each end, a 409SS outlet pipe with an O2 sensor Boss/Nut, flanges and gasket and bolt accessories. Model No. 33016 features a catalytic converter housing (which houses the monolithic core) an inlet collector, an inlet cone (conical end), flanges, a 409SS outlet pipe with an O2 sensor Boss/Nut, brackets and gasket and bolt accessories. The manufacturing process of the finished catalytic converter assemblies takes place in three different countries: Canada, China and the United States. Manufacturing in the United States Production of the ceramic fiber mat. The intumescent ceramic fiber mat (in rolls) is produced entirely in the United States through an automated process. The mat is exported to the assembly facility in China where it used for manually “canning” (or wrapping) the catalyst (monolithic core). Manufacturing in Canada Production of the ceramic substrate (monolithic core). The process of creating the monolithic core consists of submersion of a ceramic honeycomb structure substrate (manufactured in the United States) into a formulated slurry consisting of a washcoat and proprietary mixture of precious metals. The product is cured in an industrial oven at predetermined temperatures for the necessary time. The catalyst or ceramic substrate (monolithic core) is then shipped to China for “canning” (or wrapping). Once returned to Canada, the product is labeled, quality control inspected and packaged for export. The Canadian built catalyst makes up nearly 50% of the overall cost of the completed catalytic converter assembly. Manufacturing in China In China, the canning of the ceramic substrate (monolithic core) is performed. This involves the wrapping of the ceramic substrate (monolithic core) with the intumescent ceramic fiber mat (which was produced in the United States). The catalyst is wrapped into a metal shell (housing) and the inlet and outlet pipes are attached to the housing. The metal shell and attached pipes are secured to the casing through welding. The completed assemblies are returned to Canada for inspection, labeling and packaging. ISSUE: What is the country of origin of catalytic converters for the purposes of marking and Section 301 trade remedies? LAW AND ANALYSIS: Marking The marking statute, Section 304(a), Tariff Act of 1930, as amended (19 U.S.C. § 1304(a)), 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 container) will permit in such manner as to indicate to an 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 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.” United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940). Pursuant to section 102.0, interim regulations, related to the marking rules, tariff-rate quotas, and other USMCA provisions, published in the Federal Register on July 6, 2021 (86 FR 35566), the rules set forth in §§ 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 goods which are subject to the provisions of 19 C.F.R. § 102.21. See 19 C.F.R. § 102.11. Applied in sequential order, the required hierarchy establishes that the country of origin of a good is the country in which: (a)(1) The good is wholly obtained or produced; The good is produced exclusively from domestic materials; or Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in § 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied. . . . Sections 102.11(a)(1) and 102.11(a)(2) do not apply to the facts presented in this case because the completed catalytic converter is neither wholly obtained or produced in Canada or produced exclusively from Canadian materials. Instead, each of the three models consist of component parts and materials, which stem from three different countries. In the instant case, the shell (housing), heat shield, exhaust pipes and conical ends are produced in China, while the ceramic fiber mats are produced in the United States. Only the catalytic elements, including the ceramic monolithic core, are produced in Canada. Because the analysis of sections 102.11(a)(1) and 102.11(a)(2) does not yield a country of origin determination, we look to section 102.11(a)(3). “Foreign material” is defined in section 102.1(e) as “a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced.” The catalytic converters (which contains the ceramic monolithic core) as imported from Canada into the United States are classified under subheading 8421.39, HTSUS. The tariff shift rule set forth in § 102.20 for articles classified in subheading 8421.39, HTSUS, is as follows: “[a] change to subheading 8421.11 through 8421.39 from any other subheading, including another subheading within that group.” Following the wrapping and canning of the ceramic monolithic core in China and the attachment of the exhaust pipes and conical ends, the catalyst or ceramic substrate (monolithic core) remains classified in subheading 8421.39, HTSUS. Here, the tariff shift is not met. The catalyst (monolithic cores) from Canada used to produce finished catalytic converters, do not meet the required tariff shift to be considered changed by manufacture for country of origin marking purposes. Accordingly, § 102.11(b) of the hierarchical rules must next be applied. Section 102.11(b)(1) provides as follows: (b) Except for a

MarkingThe marking statute, Section 304(a), Tariff Act of 1930, as amended (19 U.S.C. § 1304(a)), 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 container) will permit in such manner as to indicate to an 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 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.” United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940). Pursuant to section 102.0, interim regulations, related to the marking rules, tariff-rate quotas, and other USMCA provisions, published in the Federal Register on July 6, 2021 (86 FR 35566), the rules set forth in §§ 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 goods which are subject to the provisions of 19 C.F.R. § 102.21. See 19 C.F.R. § 102.11. Applied in sequential order, the required hierarchy establishes that the country of origin of a good is the country in which: (a)(1) The good is wholly obtained or produced;The good is produced exclusively from domestic materials; or Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in § 102.20 and satisfies any other applicable requirements of that section, and all other applicable requ