The tariff classification of container buildings from China

N304647 June 26, 2019 CLA-2-94:OT:RR:NC:1:130 CATEGORY: Classification TARIFF NO.: 9903.88.03; 9406.90.0030 Maurine Cecil Western Overseas Corporation 10731B Walker Street Cypress, CA 90630 RE: The tariff classification of container buildings from China Dear Ms. Cecil: In your letter, dated June 4, 2019, you requested a binding classification ruling. The ruling was requested on behalf of your client G4IS Modular, Ltd. (G4IS). Product documentation and photos were submitted for our review. The merchandise under consideration is described by G4IS as “ISO (International Organization for Standardization) Container Buildings”. The modules are constructed from outfitted, new, pre-engineered, steel-framed shipping container bodies, and may function as dormitories, offices, bathrooms, industrial buildings, lunch rooms, or laundry units. According to the information provided, the units are available in standard shipping container lengths, such as 20-foot, 40-foot, and 53-foot lengths. They may be stacked or combined for larger interior spaces. Each unit is designed to be moveable by truck, train, or ship, yet appears to be installed permanently or for long periods of time. The containers are insulated, and are outfitted with windows and doors, electrical fittings, HVAC, plumbing fixtures, and cabinets. According to the information provided, the container units are ready for immediate use after electrical and plumbing connection. Note 4 to Chapter 94, Harmonized Tariff Schedule of the United States (HTSUS), states that “For the purposes of heading 9406, the expression "prefabricated buildings" means buildings which are finished in the factory or put up as elements, entered together, to be assembled on site, such as housing or worksite accommodation, offices, schools, shops, sheds, garages or similar buildings”.  The ISO Container Buildings meet this definition.  Each is pre-engingeered and manufactured in the factory, and is imported fully assembled and ready to use. Each is resistant to weather conditions, has permanence, and functions as housing, offices, and other similar occupiable units. Therefore, we find that the container modules constitute prefabricated buildings. The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level (for the 4 digit headings and the 6 digit subheadings) and facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and the General Rules of Interpretation (GRIs). While neither legally binding nor dispositive of classification issues, the ENs provide commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of the headings. See T.D. 89-80, 54 Fed. Reg. 35127-28 (Aug. 23, 1989). The ENs to heading 9406, HTSUS, state that (t)he buildings of this heading may or may not be equipped. However, only builtin equipment normally supplied is to be classified with the buildings. This includes electrical fittings (wiring, sockets, switches, circuitbreakers, bells, etc.), heating and air conditioning equipment (boilers, radiators, air conditioners, etc.), sanitary equipment (baths, showers, water heaters, etc.), kitchen equipment (sinks, hoods, cookers, etc.) and items of furniture which are built in or designed to be built in (cupboards, etc.). Therefore, any additional components must be identified and classified separately. This includes any furniture, such as chairs, desks, and beds, electronics, and any other non-standard equipment. The applicable subheading for the ISO Container Buildings will be 9406.90.0030, HTSUS, which provides for “Prefabricated buildings: Other: Of metal: Other”.  The rate of duty will be 2.9 percent ad valorem.  Effective July 6, 2018, the Office of the United States Trade Representative imposed an additional tariff on certain products of China classified in the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(f), HTSUS.  For additional information see “Notice of Action and Request for Public Comment Concerning Proposed Determination of Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation” (June 20, 2018, 83 F.R. 28710).  Products of China that are provided for in subheading 9903.88.03 and classified in one of the subheadings enumerated in U.S. note 20(f) to subchapter III shall continue to be subject to antidumping, countervailing, or other duties, fees and charges that apply to such products, as well as to those imposed by subheading 9903.88.03. Products of China classified under subheading 9406.90.0030, HTSUS, unless specifically excluded, are subject to the additional 25 percent ad valorem rate of duty.  At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 9406.90.0030, HTSUS, listed above. The tariff is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Notice cited above and the applicable Chapter 99 subheading. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at https://hts.usitc.gov/current. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Laurel Duvall at [email protected]. Sincerely, Steven A. Mack Director National Commodity Specialist Division