CLA-2 CO:R:C:M 955699 MBR
Mr. William H. Steere
Manager, U.S. Customs Compliance
Carrier Corporation
P.O. Box 4800
Syracuse, N.Y. 13221
RE: North American Free Trade Agreement; Window or Wall Room Air
Conditioners; NAFTA; General Note 12(t); Assembly; Assemblies;
12(t)/84.32 and 12(t)/84.33(A), HTSUS
Dear Mr. Steere:
This is in reply to your letter of January 3, 1994, requesting
guidance regarding the applicability of the North American Free
Trade Agreement ("NAFTA") to the manufacture of window or wall room
air conditioners and heat pumps.
FACTS:
You inquire as to the NAFTA eligibility for window or wall
type air conditioning machines (classifiable in subheading
8415.10.00, HTSUS). You propose the manufacture of the air
conditioners from entirely U.S. and Mexican origin goods, with the
exception of a non-originating compressor.
You similarly inquire about NAFTA eligibility of the
manufacture of goods classifiable in subheadings 8415.81 through
8415.83, HTSUS, such as heat pumps, etc.
ISSUE:
Whether certain air conditioners, assembled with non-
originating compressors, qualify as originating goods for purposes
of the duty preference under NAFTA?
-2-
LAW AND ANALYSIS:
To be eligible for tariff preferences under the North American
Free Trade Agreement (NAFTA), goods must be "originating goods"
within the rules of origin in General Note 12(b)(i), HTSUS. The
air conditioners are not wholly obtained in the U.S. or Canada
because they incorporate a non-originating material (compressor).
However, they may be "transformed in the territory of Canada,
Mexico and/or the United States" pursuant to General Note
12(b)(ii), HTSUS, which states:
(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 subdivisions (r), (s) and (t) of this note
or the rules set forth therein...
(B) the goods otherwise satisfy the applicable requirements
of subdivisions (r), (s) and (t) where no change in
tariff classification is required, and the goods satisfy
all other requirements of this note...
You propose the manufacture of the air conditioners from
entirely U.S. and Mexican origin materials, with the exception of
a non-originating compressor. General Note 12(t)/84.32, HTSUS,
regarding NAFTA, provides as follows:
A change to subheading 8415.10 from any other subheading,
except from tariff item 8415.90.40 or from assemblies
incorporating more than one of the following: compressor,
condenser, evaporator, connecting tubing.
Therefore, inasmuch as the instant proposed manufacture does
not result from a non-originating chassis, chassis base or outer
cabinet (subheading 8415.90.40, HTSUS), and only one of the
enumerated goods will be of non NAFTA origin (compressor), this
manufacturing operation would qualify for NAFTA duty preference.
You similarly inquire about NAFTA eligibility of the
manufacture of goods classifiable in subheadings 8415.81 through
8415.83, HTSUS. General Note 12(t)/84.33(A), HTSUS, regarding
NAFTA, provides as follows:
(A) A change to subheadings 8415.81 through 8415.83 from any
subheading outside that group, except from tariff item
8415.90.40 or from assemblies incorporating more than one
of the following: compressor, condenser, evaporator,
connecting tubing; or
-3-
Therefore, pursuant to (A), provided the instant proposed
manufacture does not result from a non-originating chassis, chassis
base or outer cabinet (subheading 8415.90.40, HTSUS), and any
tariff changes are outside that group, and only one of the
enumerated goods will be non-originating (i.e., compressor), this
manufacturing operation would qualify for NAFTA duty preference.
You further inquire as to a working definition of the term
"assemblies" for the purposes of General Note 12(t)/84.32 and
84.33. The Webster's New World Dictionary, 1988, page 82, defines
"assembly" and "assemblies," in pertinent part, as follows: "4 a
fitting together of parts to make a whole, as in manufacturing
automobiles" and "5 the parts to be thus fitted together."
(Emphasis added). We find these to be sufficient working
definitions for these provisions.
However, it is important to note that the assemblies in
General Notes 84.32 and 84.33 would necessarily have to be sub-
assemblies of the air conditioners since, finished assemblies or
sub-assemblies (which were non-originating) imparting the essential
character (General Rule of Interpretation 2.(a)) of the finished
air conditioners would not undergo the requisite tariff shift.
HOLDING:
Pursuant to General Note 12(t)/84.32, HTSUS, provided the
proposed manufacture does not result from a non-originating
chassis, chassis base or outer cabinet (subheading 8415.90.40,
HTSUS), and only one of the enumerated goods will be non-
originating (i.e., compressor), this manufacturing operation would
qualify as an originating good for purposes of the duty preference
under NAFTA.
Similarly, pursuant to General Note 12(t)/84.33(A), HTSUS,
provided the instant proposed manufacture does not result from a
non-originating chassis, chassis base or outer cabinet (subheading
8415.90.40, HTSUS), and any tariff changes are outside that group,
and only one of the enumerated goods will be non-originating (i.e.,
the compressor), this manufacturing operation would qualify as an
originating good for purposes of the duty preference under NAFTA
Sincerely,
John Durant, Director