CLA-2 RR:CR:SM 561438 BLS
Ms Joyce Henderson, Port Director
U.S. Customs Service
9777 Via de la Amistad
San Diego, California 92173
RE: Eligibility for NAFTA preference of television receivers imported from Mexico;
General Note 12(t)/85.85; Article 509
Dear Ms. Henderson:
This is in reference to a letter dated February 12, 1999, on behalf of Sharp Electronics Corporation ("Sharp"), requesting a ruling that certain television receivers will be eligible for preferential treatment under the North American Free Trade Agreement (NAFTA) upon importation into the U.S.
FACTS:
Sharp states the following:
The television set, Model No. 19M100S, has a diagonal measurement which exceeds 14 inches, and is produced in Mexico by Sharp Electronica Mexico S.A. de C.V. ("Semex"). The television receiver incorporates a color picture tube.
Semex assembles picture tube assemblies in Mexico by affixing degaussing coil deflection yoke and mounting brackets to color picture tubes. The chassis of the television set is produced by populating a bare printed circuit board using an automatic insertion machine, a surface mounting device and by manual insertion process. The completed printed circuit board becomes the chassis of a finished television receiver.
The chassis and picture tube assembly are placed in a cabinet in the final assembly process. Once the electronic components of the picture tube and chassis are properly connected, the picture tube is aligned, and
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the product undergoes final inspection for quality control. Thereafter, the back panel of the television cabinet is affixed, and the product is packaged.
Semex produces these television receivers using both NAFTA-originating and non-originating components. The subject merchandise is currently being imported through the port of San Diego.
Counsel for Sharp has telephonically advised that the television receiver in question (Model No. 19M100S) was also the subject of Headquarters Ruling Letter (HRL) 561329. However, while the facts in both cases are otherwise identical, the imported television receiver in HRL 561329 incorporates a non-originating tuner, while the subject receiver incorporates a tuner of Mexican origin. HRL 561329 also involved prospective as opposed to current transactions.
ISSUE:
Whether the television receivers assembled in Mexico incorporating certain non-originating components will be eligible for NAFTA preference upon importation into the U.S.
LAW AND ANALYSIS:
To be eligible for tariff preference under the NAFTA, goods must be “originating goods” within the rules of origin in General Note 12(b), Harmonized Tariff Schedule of the United States (HTSUS). In this case, pursuant to General Note 12(b)(ii) the television sets imported into the U.S. may be originating if:
(ii) they have been transformed in the territory of Canada, Mexico, and/or
the United States so that
(A) except as provided in subdivision (f) of this note, each of the non
originating materials used in the production of such goods undergoes
a change in tariff classification described in subdivision (r), (s) and (t)
of this note or the rules set forth therein, or
(B) the goods otherwise satisfy the applicable requirements of subdivision
(r), (s) and (t) where no change in tariff classification is required, and
the goods satisfy all other requirements of this note...
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Under the circumstances of this case, we must determine whether the non-
originating parts are transformed in Mexico pursuant to General Note 12(b)(ii)(A), HTSUS. Sharp believes that the television receivers are properly classifiable under HTSUS subheading 8528.12.32, which provides for: "reception apparatus for television, whether or not incorporating radiobroadcast receivers or sound or video recording or reproducing apparatus; ....: [r]eception apparatus for television, whether or not incorporating radiobroadcast receivers or sound or video recording or reproducing apparatus: [c]olor: [n]on-high definition, having a single picture tube intended for direct viewing (non-projection type), with a video display diagonal exceeding 35.56 cm: "[o]ther....." Sharp has also classified the non-NAFTA materials and components (on the bill of materials) of the receiver (including the chassis) under the following subheadings:
Screw - 7318.15.60 Holder- 3926.90.98 Washer - 7318.22.00
R/C Unit - 8526.92 Battery - 8506.80 Magnet - 8505.11
Earth Parts - 8544.41.80
Coil - 8504.50.80
You have classified the non-originating components of the chassis under the following subheadings:
Spacer - 8529.90.93
Insulator - 2525.10
Transistor - 8541.21
Fuse - 8536.10
Resistor (carbo) - 8533.10
Switch - 8536.50.90
Resistor (metal) - 8533.40.40
Filter - 8529.90.99
Resistor (cement)- 8533.40.99
Eyelet - 8529.90.93
Connection Wire - 8544.41.80
Ferrite Bead - 8504.50.80
PC Board (Main) - 8534 (heading)
Resistor - 8533.40.80
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Jack - 8536.90.40
Lug Terminal - 8536.90.40
Plug - 8536.69.40
Capacitor - 8532.30
Coil - 8504.50.80
Crystal - 8541.60
Diode - 8541.10
IC - 8542.14.80
Transformer - 8504.31.40
Heatsink - 8529.90.93
We will assume for the purposes of this ruling that the classification of the tuner and other non-originating components are correct.
The rule applicable to goods of subheading 8528.12.32, HTSUS, is provided for in
General Note 12(t)/85.85, HTSUS, which provides the following:
A change to tariff items 8528.12.28 or 8528.12.32 from any other heading, except from tariff items 8529.90.43, 8529.90.46, 8529.90.49 or 8540.11.10 or more than one of the following:
(A) tariff item 7011.20.10,
(B) tariff item 8540.91.15.
As the tuner and other non-originating components will undergo a change in tariff classification under this rule, the imported television receivers are considered to be “goods originating in the territory of a NAFTA party” and thus will be eligible for NAFTA preference upon importation.
HOLDING:
Based on the information submitted, the non originating components will undergo the requisite change in tariff classification in Mexico required in General Note 12(t), HTSUS. Therefore, the imported television receivers will be considered “goods originating in the territory of a NAFTA party,” and eligible for NAFTA preference.
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Sharp should be advised that if it be subsequently determined that the classification of the components as set forth in it’s submission is not accurate or that any information furnished is not complete and does not comply with 19 CFR 177.9(b)(1), the ruling will be subject to modification or revocation. Accordingly, if there is any change in the facts submitted to Customs, it is recommended that Sharp submit a new ruling request in accordance with 19 CFR 177.2.
Sincerely,
John Durant, Director
Commercial Rulings Division