VAL R:C:V 545974 CRS
Mr. Samuel P. Drake
Rudolph Miles & Sons, Inc.
P.O. Box 11057
El Paso, TX 79983
RE: Article 509; advance ruling; NAFTA; exception to the change in tariff classification not applicable
Dear Mr. Drake:
This is in reply to your letter, dated April 19, 1995, in which you requested an advance ruling on behalf of Murata Erie Texas, Inc. (Murata), as to whether deflection yokes for television cathode-ray tubes (the "good") produced in Mexico qualifies as an originating good for purposes of preferential tariff treatment under the North American Free Trade Agreement (NAFTA). Murata, a U.S. importer, is eligible to request an advance ruling in accordance with section 181.92(b)(5)(i), Customs Regulations (19 C.F.R. ยง 181.92(b)(5)(i)).
FACTS:
Murata produces deflection yokes for cathode-ray tubes, made from originating and non-originating materials, at its factory in Juarez, Mexico. You state that the deflection yokes are classified in subheading 8540.91.20, Harmonized Tariff Schedule of the United States (HTSUS). The non-originating materials, consisting of a ferrite core, a liner, a cross-arm and a connector, are classified in subheading 8540.91.50, HTSUS. Headquarters Ruling Letter (HRL) 957207, dated February 9, 1995.
You have also advised that since the deflection yokes and the non-originating materials are classified in the same subheading (subheading 8540.91, HTSUS, which provides for parts of cathode-ray tubes), they do not undergo a change in tariff classification and, consequently, fail to satisfy the applicable rule of origin. Furthermore, you note that the deflection yokes do not qualify as originating goods under the de minimis rule. Accordingly, you have asked whether the deflection yokes qualify for NAFTA under one of the exceptions to the change in classification requirement.
ISSUE:
The issue presented is whether the deflection yokes are covered by the exceptions to the change in tariff classification requirement such that they qualify as originating goods for purposes of NAFTA.
LAW AND ANALYSIS:
The Appendix to part 181, Customs Regulations (19 C.F.R. pt. 181 app.; the NAFTA Rules of Origin Regulations (the "ROR") sets forth, at section 4, certain exceptions to the change in classification requirement. Section 4(b) provides in pertinent part that, with the exception of a good of Chapters 61 through 63, a good originates in the territory of a NAFTA country where:
(i) the good is produced entirely in the territory of one or more of the NAFTA countries,
ii) one or more of the non-originating materials used in the production of the good do not undergo an applicable change in tariff classification because
(A) those materials are provided for under the Harmonized System as parts of the good, and
(B) the heading for the good provides for both the good and its parts and is not further subdivided into subheadings, or the subheading for the good provides for both the good and its parts,
(iii) the non-originating materials that do not undergo a change in tariff classification in the circumstances described in subparagraph (ii) and the good are not both classified as parts of goods under the heading or subheading referred to in subparagraph (ii)(B). . . .
ROR, section 4(4)(b).
In the instant case, the good, i.e., the deflection yokes, are produced entirely in Mexico. Furthermore, the non-originating materials, i.e., the ferrite core, liner, cross-arm and connector, are provided for under the HTSUS as parts of the good, and the subheading for the good provides for both the good and its parts (subheading 8540.91). Thus, the good satisfies the first two requirements of the exception set forth in section 4(4)(b).
However, the non-originating materials that do not undergo a change in tariff classification because they are classified as parts of the good and the relevant subheading provides for both the good and its parts and the good are both classified as parts of goods in subheading 8540.91, HTSUS. Since section 4(4)(b)(iii) requires that both the non-originating materials and the good not be classified as parts, the exception does not apply, and the good does not qualify as an originating good for purposes of NAFTA.
HOLDING:
The subject deflection yokes do not originate in the territory of a NAFTA country in accordance with section 4(4)(b) of the ROR.
Sincerely,
John Durant, Director
Commercial Rulings Division