MAR-O5 RR:TC:SM 560951 BLS
Ellen Maxwell-Hoffman, Esq.
Bowles Rice McDavid Graff & Love, PLLC
600 Quarrier Street
Charleston, West Virginia 25325-1386
RE: Country of origin marking of an automotive wire harness
Dear Ms. Hoffman:
This is in reference to your letter dated May 20, 1998, on behalf of NGK SPARK PLUG MFG. (U.S.A.), INC. (“NGK”), requesting country of origin marking requirements for an automotive wiring harness incorporated in the U.S. into an oxygen sensor.
Additional information was submitted by facsimile on June 5, 1998.
FACTS:
NGK assembles oxygen sensors to be sold in the U.S. as automotive component parts that incorporate a “wire harness.” (Oxygen sensors are used to determine the amount of oxygen in exhaust gases.) The wire harness is assembled into the sensor element at NGK’s facility in West Virginia. The component parts of the wire harness portion of the oxygen sensor are purchased by NGK and are subcontracted out for assembly, in this case to Sumitomo Wiring (USA), Inc. (“Sumitomo”). Sumitomo assembles the wiring harnesses at its facility in Canada.
Once installed into a motor vehicle by the U.S. automobile manufacturer, the wire harness as incorporated into the oxygen sensor will be concealed so that a marking of any kind will not be readily visible. The oxygen sensor is provided by NGK to Ford Motor Company as original equipment in the manufacture of automobiles.
You describe two models or types of oxygen sensors, the “NRS Sensor” and the “Iso Hego Sensor,” identified as Sensor #1 and Sensor #2, respectively.
Sensor #1
This sensor utilizes 20 primary parts, 9 of which are used in the assembly of the
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wire harness component of this sensor. The 9 parts of the wire harness and their origin are as follows:
1) Ceramic Heater Assembly ---------- Japan
2) Metal Cap ------------------------------ U.S. or Japan
3) Ceramic Separator ------------------- Japan
4) Rubber Packing ---------------------- Japan or U.S.
5) Rubber Cap ---------------------------- Japan or U.S.
6) Lead Wire (4 strands ---------------- U.S.
coated with plastic)
7) Plastic Connector -------------------- U.S.
8) Wiring Shield ------------------------- U.S.
9) Gray Accessory ---------------------- U.S.
Sensor #2
This sensor utilizes 19 primary components, 9 of which are used in the assembly of the wire harness. The parts of the wire harness and their origin are as follows:
1) Ceramic Heater Assembly ---------Japan
2) Spacer --------------------------------- Japan
3-5) Rubber Cap Assembly ---------- Japan or U.S.
6) Metal Cap ----------------------------- Japan or U.S.
7) Lead Wire ----------------------------- U.S.
8) Plastic Connector --------------------U.S.
9) Wiring Shield ------------------------- U.S.
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The following is a general description of the assembly operation in Canada and how the assembly is then incorporated into the oxygen sensor in the U.S.:
Assembly in Canada
1) The lead wire, provided in 30,000 foot spools, is cut to length and a metal end is attached to one end of each piece. This is done mechanically.
2) Four pieces of wire are then inserted into the plastic connector by hand.
3) The wiring shield is then slipped over the lead wires manually.
4) The wiring shield is then pulled back by hand and the four lead wires are pushed through the metal cap manually.
5) The four pieces of lead wire are then threaded through the rubber cap assembly manually.
6) The spacer is then slid over the lead wires manually.
7) the ceramic heater assembly is attached to three of the four lead wires using a crimping machine. The parts are then visually inspected for defects and mechanically tested for electrical conductivity. They are then packaged and shipped to West Virginia.
Operations in the U.S.
1) After a heat treatment process (to eliminate impurities from the sensor element) the metal cap is pulled up and over the metal pipe. The rubber cap and the spacer slide up and are contained in the metal cap. This is done manually with the assistance of a pulling device.
2) The metal cap now covers approximately 30% of the metal pipe and in this coverage area the metal cap is mechanically crimped to permanently attach it to the sensor. The metal cap is crimped a second time in the area in which the rubber cap lies (on the inside of the metal cap) . The dual crimping serves two purposes, the first crimp assures permanent attachment and both crimps ensure that the unit is water tight.
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ISSUE:
What are the marking requirements for the imported wire harnesses?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), requires that, unless excepted, every article of foreign origin (or its container) imported into the
U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit in such manner as to
indicate to the ultimate purchaser the English name of the country of origin of the article. The regulations implementing the requirements and exceptions to 19 U.S.C. 1304 are set forth in Part 134, Customs Regulations (19 CFR 134).
The country of origin marking requirements for goods of a NAFTA country are determined in accordance with Annex 311 of the North American Free Trade Agreement, as implemented under the North American Free Trade Agreement Implementation Act ("NAFTA") (Pub. L. 103 182, 107 Stat. 437 (December 8, 1993)). The marking rules used for determining whether a good is a good of a NAFTA country are contained in regulations set forth in 19 CFR Part 102. The marking requirements for these goods are set forth as amendments to various provisions of Part 134, Customs Regulations.
Section 134.1(b) of the Customs Regulations (19 CFR 134.1(b)), defines “country of origin” as:
The country of manufacture, production, or growth of
any article of foreign origin entering the U.S. Further
work or material added to an article in another country
must effect a substantial transformation in order to
render such other country the “country of origin” within
this part; however, for a good of a NAFTA country, the
NAFTA Marking Rules will determine the country of
origin.
Section 134.1(j) of the regulations provides that the “NAFTA Marking Rules” are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) of the regulations defines a “good of a NAFTA country” as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules.
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Section 134.35(b), Customs Regulations (19 CFR 134.35(b)) provides that:
A good of a NAFTA country which is to be processed
in the United States in a manner that would result
in the good becoming a good of the United States
under the NAFTA Marking Rules is excepted from marking.
Unless the good is processed by the importer or on
its behalf, the outermost container of the good shall
be marked in accord with this part.
In order to determine the country of origin marking requirements, we must first apply the NAFTA Marking Rules to determine whether the imported wiring harness is a good of a NAFTA country prior to being further processed in the United States. Part 102 of the regulations sets forth the NAFTA Marking Rules for purposes of determining whether a good is a good of a NAFTA country for marking purposes. Section 102.11 of the regulations sets forth the required hierarchy for determining country of origin for marking purposes. Section 102.11(a) provides that “[t]he country of origin of a good is the country in which:
(1) The good is wholly obtained or produced;
(2) The good is produced exclusively from domestic
materials; or
(3) Each foreign material incorporated in that good
undergoes an applicable change in tariff
classification set out in section 102.20 and
satisfies any other applicable requirements of
that section, and all other requirements of these
rules are satisfied.”
“Foreign material” is defined in section 102.1(e) of the regulations 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 imported wiring harness is not “wholly obtained or produced,” or “produced exclusively from domestic (Canadian) materials.” Therefore, for purposes of determining the origin of the imported good, section 102.11(a)(3) is the applicable rule that first must be applied. Under this rule, the country of origin of a good is the country in which each foreign material (including U.S. materials) incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20. Section 102.20 of the rules sets forth the specific tariff classification changes and/or
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other operations which are specifically required in order for country of origin to be determined on the basis of operations performed on the foreign materials contained in a good. When imported into the U.S., the wiring harness is classifiable under subheading 8544.30, HTSUS, “Insulated (including enameled or anodized) wire, cable (including coaxial cable) and other insulated electric conductors whether or not fitted with connectors; Ignition wiring sets and other wiring sets of a kind used in vehicles, aircraft or ships. “ Therefore, each of the components used in assembly of the wiring harness must undergo the applicable change in tariff classification set out in section 102.20(o), Section XVI: Chapters 84 through 85, 8544.11-8544.70, of the regulations, which provides as follows:
8544.11-8544.70 .... A change to subheading 8544.11 through 8544.70
from any other subheading, including another
subheading within that group, except when resulting from a simple assembly.
A “simple assembly” is defined as “[t]he fitting together of five or fewer parts all of which are foreign (excluding fasteners such as screws, bolts, etc.) by bolting, gluing, soldering, sewing or by other means without more than minor processing." See section 102.1(o) of the regulations,
The components of the wiring harness as described appear to be classified as follows:
Ceramic Heater Assembly ---------------- subheading 9027.90.40
Rubber Cap ---------------------------------- subheading 4016.93
Lead Wire ------------------------------------- subheading 8544.11 or 8544.19
Ceramic Separator -------------------------- heading 8546 or 8547
Metal Cap ------------------------------------- subheading 7326.90.90,
7419.99.50, 7508.50 or
7616.90
Plastic Connector & ------------------------- subheading 3926
“Gray Accessory”
Wiring Shield ---------------------------- heading 7020
(Glass mesh)
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(Counsel has advised that the “Gray Accessory” is a small plastic part used in some applications to help secure the wiring harness to the vehicle and the “wiring shield,” composed of glass mesh, is used to prevent the wires from being pulled apart.)
As the parts imported into Canada change classification and the operations in Canada constitute more than a simple assembly, there is a tariff shift under 19 CFR 102.11(a)(3). Therefore, when imported into the U.S., the wiring harness is a product of Canada. The next question to be addressed in order to determine the marking requirements for the imported product is whether the operations in the U.S. result in the wiring harness becoming a good of the U.S. under the NAFTA Marking Rules. Accordingly, we must again apply the rules under the section 102.11 hierachy.
The oxygen sensor is neither “wholly obtained or produced,” nor “produced exclusively from domestic (U.S.) materials.” Therefore, for purposes of determining the origin of the imported good, section 102.11(a)(3) is the applicable rule that first must be applied. As noted above, under this rule the country of origin of a good is the country in which each foreign material incorporated in the good undergoes an applicable change in tariff classification set out in section 102.20. The oxygen sensor is classified under heading 9027, HTSUS, which provides for, inter alia, instruments and apparatus for physical or chemical analysis (for example, polarimeters, refractometers, spectrometers, gas or smoke analysis apparatus). As noted, the wiring harness is classifiable under subheading 8544.30, HTSUS. The applicable change in tariff classification set out in section 102.20(q), Section XVllI: Chapters 90 through 92,
9027.10-9027.90, of the regulations provides:
A change to subheading 9027.10 through 9027.90 from any other subheading,
including another subheading within that group.
Accordingly, there is a tariff shift under 19 CFR 102.20(q). Therefore, as the processing in the United States in producing the oxygen sensor results in the wiring harness becoming a good of the United States under the NAFTA Marking Rules, the wiring harness is excepted from individual marking requirements. As the importer is also the processor, pursuant to section 134.35(b) the outermost containers of the imported wiring harnesses are also excepted from the marking requirements.
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HOLDING:
Wiring harnesses which are a product of Canada undergo a tariff shift under 19 CFR 102.20(q) when assembled into an oxygen sensor in the U.S. Therefore,
as the processing in the U.S. in producing the oxygen sensor results in the wiring harness becoming a good of the U.S. under the NAFTA Marking Rules, the wiring harness is excepted from individual country of origin marking requirements. As the importer is also the processor of the imported good, pursuant to 19 CFR 134.35(b), the outermost container of the wiring harness is also excepted from the marking requirements.
Sincerely,
John Durant, Director
Commercial Rulings Division