Main Idea: A product's essential character and primary function are key criteria to keep in mind in for both classification and country of origin determinations.
In ruling N330046 (Feb. 2, 2023), U.S. Customs and Border Protection (CBP) determines the classification and the country of origin for a glass water bottle with an aluminum shell. The product is a cylindrical 16-ounce clear glass bottle, equipped with a removable thermoplastic cap and snap-in silicone spout and an aluminum shell. The glass bottle is manufactured and molded in Germany and then shipped to China where it is combined with a thermoplastic cap made of resin from Switzerland, and silicone cap parts, a stainless-steel push-button lock, and an aluminum shell – that are all sourced from China.
In its ruling CBP notes that the water bottle is considered a composite good under General Rule of Interpretation 3, meaning it is classified according to the material or component that gives the bottle its "essential character." CBP notes that the glass water bottle performs the critical role of holding water, or other liquids – providing the essential character within the meaning of GRI 3(b). Therefore, CBP classifies the glass water bottle with the aluminum shell under subheading 7013.42.4000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for "Glassware of a kind used for table, kitchen, toilet, office, indoor decoration or similar purposes...: Glassware of a kind used for table (other than drinking glasses) or kitchen purposes other than that of glass-ceramics: ... Of glass having a linear coefficient of expansion not exceeding 5 x 10-6 per Kelvin within a temperature range of 0?C to 300?C: Other: Valued over $5 each." The general rate of duty is 7.2 percent ad valorem.
CBP also determines the country of origin for the water bottle. 19 CFR § 134 defines "country of origin" as the "country of manufacture, production, or growth of any article of foreign origin entering the United States. When a good is made of components sourced from different countries, CBP typically uses the substantial transformation test to determine whether a good "originates" in a particular country. A substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, CBP considers the totality of the circumstances and makes such determinations on a case-by-case basis.
The water bottle is made from various components sourced from Germany, Switzerland, and China but the glass bottle provides the bulk and weight of the article and performs its principal function – storing and holding beverages or other liquids. CBP therefore finds that the glass water bottle does not undergo a substantial transformation during finishing operations in China, and the glass bottle remains classified in 7013.42.4000, HTSUS, both before and after the addition of the other components in China. Therefore, CBP holds that the country of origin of the glass bottle with aluminum shell is Germany.
This ruling highlights the importance of a composite good's essential character when conducting a classification analysis, and CBP's focus on the totality of the circumstances when conducting its substantial transformation test – including examining a product's essential character, primary function and the nature of final assembly operations.
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