Pre-Made Building Units Provide Weather Protection as Imported, Unlike Framing Systems, CBP Says

Imported building units that are combined with other units to form bigger buildings are best classified as prefabricated buildings, CBP said in a May 19 ruling (here). The units in question are imported by OneBuild largely assembled, including with drywall lining, doors and windows, CBP said. The company, represented by Expeditors Tradewin, said the units are better classified as a structure of iron or steel.

The units are typically imported for future assembly as parts of larger buildings, the company told CBP. "In most cases, the modules will be imported in batches for site assembly of the larger building in stages," CBP said. "For instance, in an apartment building, each module is outfitted as one apartment. Many modules are entered together and assembled into some number of floors of the building along with the stairwells and corridors that are built on site before the next number of modules are shipped and entered. The interior modules do not have an exterior finish, whereas any exposed outer wall of a module is finished with the exterior material for the building. When all of the floors of the apartment building are assembled, the over-roof for the entire building is built on site."

Despite the company's claims, the units do more than provide a frame or steel structure, CBP said. "Instead, they are essentially complete, ready-for-assembly units, some with complete bathrooms and kitchens that just need to be connected together with other units over a common foundation to form a building and finished through the integration process," the agency said. Even though the units might be used to form a bigger building, "a single unit could be a full building, provided that it is given a footing, utilities, water and sewage, etc., just like the larger assemblies," CBP said.

While OneBuild argued that its units are similar to framing structures that CBP previously ruled to be classified as a structure of steel, the agency disagreed. Unlike those framing structure, the units "have walls, floors, ceilings and many have fully completed interiors," the agency said. The units would also "provide significant shelter against weather even before they are assembled into a complete building. This is contrary to your claim that the subject merchandise is not fully enclosed and incapable of serving as sheltered rooms." The units are best classified in subheading 9406.00.8030 as prefabricated buildings, with a 2.9% duty rate.