CLA-2 CO:R:C:M 954931 DWS
8479.89.90; 8481.80.90; 8536.50.00
Mr. Roy Lachance, Vice President
Enviro-Scope Water Solutions Corp.
181 Cocksfield Avenue, Suite 5
Downsview, Ontario
Canada M3H 3T4
RE: Water Reduction Device; Solenoid Valve; Plastic Casing;
Stainless Steel Back Plate; Brass Fittings; Braided Supply
Tube; Shock Absorber; Motion Sensor; General Note 3(c)(vii)(A)
and (B)(1); GRI's 2(a) and 3(b); Composite Good; Explanatory
Notes 3(b)(VIII), 2(a)(V) and (VII)
Dear Mr. Lachance:
This is in response to your letter of July 27, 1993,
concerning the classification of a complete water reduction device
and its parts imported together in an unassembled form, and
individual parts imported separately, under the Harmonized Tariff
Schedule of the United States (HTSUS).
FACTS:
The merchandise consists of a water reduction device (model
no. AKP-93) for urinal flush tanks. The AKP-93 is comprised of a
plastic casing, a stainless steel back plate, a solenoid valve,
brass fittings, and a braided supply tube, all products of Canada,
and a motion sensor and shock absorber, both products of the U.S.
The occupancy sensor operated control valve is installed on the
water supply line to the flush tank to control water consumption.
The shock absorber is present to reduce any sudden water pressure
surges in the water line.
Whenever occupancy is sensed, the AKP-93 opens the supply
valve to the flush tank and allows the tank to fill and flush. A
built-in timer will hold the valve open for a pre-set period to
insure at least one more flush after the last use. The AKP-93
measures 6 inches by 8 inches by 12 inches, and operates at 120
volts (V).
The subheadings under consideration are as follows:
3926.90.95: [o]ther articles of plastics and articles of
other materials of headings 3901 to 3914: [o]ther:
[o]ther.
The general, column one rate of duty for goods classifiable
under this provision is 5.3 percent ad valorem.
7326.90.90: [o]ther articles of iron or steel: [o]ther:
[o]ther: [o]ther: [o]ther.
The general, column one rate of duty for goods classifiable
under this provision is 5.7 percent ad valorem.
7419.99.50: [o]ther articles of copper: [o]ther: [o]ther:
[o]ther: [o]ther.
The general, column one rate of duty for goods classifiable
under this provision is 5 percent ad valorem.
8307.10.30: [f]lexible tubing of base metal, with or without
fittings: [o]f iron or steel: [w]ith fittings.
The general, column one rate of duty for goods classifiable
under this provision is 5.8 percent ad valorem.
8479.89.90: [m]achines and mechanical appliances having
individual functions, not specified or included
elsewhere in this chapter; parts thereof: [o]ther
machines and mechanical appliances: [o]ther:
[o]ther.
The general, column one rate of duty for goods classifiable
under this provision is 3.7 percent ad valorem.
8481.80.90: [t]aps, cocks, valves and similar appliances, for
pipes, boiler shells, tanks, vats or the like,
including pressure-reducing valves and
thermostatically controlled valves; parts
thereof:
[o]ther appliances: [o]ther.
The general, column one rate of duty for goods classifiable
under this provision is 3.7 percent ad valorem.
8536.50.00: [e]lectrical apparatus for switching or protecting
electrical circuits, or for making connections to
or in electrical circuits (for example, switches,
relays, fuses, surge suppressors, plugs, sockets,
lamp-holders, junction boxes), for a voltage not
exceeding 1,000 V: [r]elays: [o]ther.
The general, column one rate of duty for goods classifiable
under this provision is 5.3 percent ad valorem.
ISSUE:
Whether the AKP-93, imported from Canada in a complete and
either assembled or unassembled form, qualifies for favorable
treatment under the U.S.-Canada Free-Trade Agreement.
Whether the individual parts of the AKP-93, imported
separately, qualify for favorable treatment under the U.S.-Canada
Free-Trade Agreement.
Under which provision is the AKP-93, imported in a complete
and either assembled or unassembled form, classifiable under the
HTSUS?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in accordance
with the General Rules of Interpretation (GRI's), taken in order.
GRI 1 provides that classification is determined according to the
terms of the headings and any relative section or chapter notes.
INDIVIDUAL PARTS
In accordance with GRI 1, it is our position that the plastic
casing is classifiable under subheading 3926.90.95, HTSUS, the
stainless steel back plate is classifiable under subheading
7326.90.90, HTSUS, the brass fittings are classifiable under
subheading 7419.99.50, HTSUS, the braided steel supply tube is
classifiable under subheading 8307.10.30, HTSUS, the shock absorber
is classifiable under subheading 8479.89.90, HTSUS, the solenoid
valve is classifiable under subheading 8481.80.90, HTSUS, and the
motion sensor is classifiable under subheading 8536.50.00, HTSUS.
General Note 3(c)(vii)(A) and (B)(1), HTSUS, states:
(vii) United States-Canada Free-Trade Agreement Implementation
Act of 1988.
(A) Goods originating in the territory of Canada that are
described in Annex 401.2(B) of the United States-Canada
Free Trade Agreement, entered into on January 2, 1988,
are subject to duty as provided herein. Goods originating
in the territory of Canada, as defined in subdivision
(c)(vii)(B) of this note, that are imported into the
customs territory of the United States and that are
entered under a provision for which a rate of duty
appears
in the "Special" subcolumn followed by the symbol "CA" in
parentheses are eligible for the tariff treatment set
forth in the "Special" subcolumn, in accordance with
section 201 of the United States-Canada Free-Trade
Agreement Implementation Act of 1988.
(B) For the purposes of subdivision (c)(vii) of this note,
goods imported into the customs territory of the United
States are eligible for treatment as "goods originating
in
the territory of Canada" only if --
(1) they are goods wholly obtained or produced in the
territory of Canada and/or the United States . . .
Because all of the components which comprise the AKP-93 are
from Canada and the U.S., under General Note 3(c)(vii), HTSUS, the
components are goods originating from the territory of Canada.
Therefore, upon compliance with the U.S.-Canada Free-Trade
Agreement and sections 10.301 - 10.311, Customs Regulations (19 CFR
10.301 - 10.311), whichever of the components are imported
separately into the U.S from Canada will receive favorable duty
treatment. The same principle applies to the complete AKP-93 which
is imported from Canada.
IMPORTED IN COMPLETE AND ASSEMBLED FORM
Because the AKP-93 is a composite good, GRI 3(b) must be
consulted. It states that:
[m]ixtures, composite goods consisting of different
materials or made up of different components, and goods
put up in sets for retail sale, which cannot be classified
by reference to 3(a), shall be classified as if they
consisted of the material or component which gives them
their essential character, insofar as this criterion is
applicable.
The AKP-93 is comprised of several components which are each
classifiable under a respective provision in the HTSUS. The
components are described under the following provisions: headings
3926, 7326, 7419, 8307, 8479, 8481, and 8536, HTSUS. Under GRI
3(b), we must determine the component which imparts the essential
character of the AKP-93.
In understanding the language of the HTSUS, the Harmonized
Commodity Description and Coding System Explanatory Notes may be
utilized. The Explanatory Notes, although not dispositive, are to
be used to determine the proper interpretation of the HTSUS. 54
Fed. Reg. 35127, 35128 (August 23, 1989). Explanatory Note
3(b)(VIII) (p. 4) states that:
[t]he factor which determines essential character will vary
as between different kinds of goods. It may, for example,
be determined by the nature of the material or component,
its bulk, quantity, weight or value, or by the role of a
constituent material in relation to the use of the
goods.
It is our position that the solenoid valve imparts the
essential character of the AKP-93. It is the valve which allows
the urinal flush tank to fill with water. Without the valve, the
AKP-93 would not be able to operate in an effective manner.
Therefore, we find that the valve has the primary role in relation
to the use of the AKP-93.
Consequently, the AKP-93, imported in a complete and assembled
form, is classifiable under subheading 8481.80.90, HTSUS.
IMPORTED IN COMPLETE AND UNASSEMBLED FORM
GRI 2(a) state that:
[a]ny reference in a heading to an article shall be taken to
include a reference to that article incomplete or
unfinished, provided that, as entered, the incomplete or
unfinished article has the essential character of the
complete or finished article. It shall also include a
reference to that article complete or finished (or falling
to be classified as complete or finished by virtue of this
rule), entered unassembled or disassembled.
Explanatory Note 2(a)(V) (p. 2) states that:
[t]he second part of Rule 2(a) provides that complete or
finished articles presented unassembled or disassembled are
to be classified in the same heading as the assembled article.
When goods are so presented, it is usually for reasons such
as requirements or convenience of packing, handling or
transport.
In part, Explanatory Note 2(a)(VII) (p. 2) states that:
[f]or the purposes of this Rule, "articles presented
unassembled or disassembled" means articles the components
of which are to be assembled either by means of simple fixing
devices (screws, nuts, bolts, etc.) or by riveting or welding,
for example, provided only simple assembly operations are
involved.
Because the unassembled and complete AKP-93 has the essential
character of an assembled and complete AKP-93, it is also
classifiable under subheading 8481.80.90, HTSUS. It is our
understanding that the AKP-93 will be presented in an unassembled
manner for convenience of packing, handling, or transport, and,
once imported into the U.S., the AKP-93 is assembled utilizing
simple assembly operations.
You have also requested that we classify the above articles
if imported into Canada from the U.S. For answers to your
questions on this matter, we suggest that you contact Revenue
Canada, the Customs agency in Canada.
HOLDING:
If the individual components of the AKP-93 are imported
separately, the plastic casing is classifiable under subheading
3926.90.95, HTSUS, as an other article of plastics; the stainless
steel back plate is classifiable under subheading 7326.90.90,
HTSUS, as an other article of steel; the brass fittings are
classifiable under subheading 7419.99.50, HTSUS, as other articles
of copper; the braided supply tube is classifiable under subheading
8307.10.30, as flexible tubing of steel, with fittings; the shock
absorber is classifiable under subheading 8479.89.90, HTSUS, as an
other mechanical appliance; the solenoid valve is classifiable
under subheading 8481.80.90, HTSUS, as an other valve appliance;
and the motion sensor is classifiable under subheading 8536.50.00,
as an other switch.
Goods classifiable under these provisions and originating in
Canada, upon meeting the requirements of sections 10.301 - 10.311,
Customs Regulations (19 CFR 10.301 - 10.311), receive 2.6 percent
ad valorem, 2.8 percent ad valorem, 2.5 percent ad valorem, 2.9
percent ad valorem, duty-free treatment, duty-free treatment, and
2.6 percent ad valorem, respectively, under the U.S.-Canada Free-
Trade Agreement.
The AKP-93, imported in a complete and either assembled or
unassembled form, is classifiable under subheading 8481.80.90,
HTSUS.
Sincerely,
John Durant, Director