CLA-2 CO:R:C:M 955990 DWS
Ms. Susan Knowlton
Willson International Inc.
2412 Tenth Avenue
Port Huron, MI 48060
RE: Wheel Hub Assemblies; Double Row Ball Bearings; 8482.10.50;
NAFTA; General Notes 12(b)(i) and (ii)(A), and
12(t)/87.36(A); Change in Tariff Classification
Dear Ms. Knowlton:
This is in response to your letter of February 3, 1994, on
behalf of M.B. Industries, Inc., to the Regional Commissioner of
Customs, New York, concerning the applicability of the North
American Free Trade Agreement (NAFTA) and classification of wheel
hub assemblies under the Harmonized Tariff Schedule of the United
States (HTSUS). Your letter was referred to this office for a
response.
FACTS:
The merchandise consists of three models of double flanged
wheel hub assemblies (model nos. RP-500, RP-501, and RP-502),
imported from Canada. Model RP-500 is comprised of double roll
ball bearings (Canada), a spindle (U.S.), a retainer plate (U.S.),
a retainer gasket (U.S.), wheel studs (U.S.), a seal (U.S.), and
retainer screws (U.S.). Model RP-501 is comprised of double row
ball bearings (U.S. or Japan), a spindle (U.S.), a retainer plate
(U.S.), a retainer gasket (U.S.), wheel studs (U.S.), a seal
(U.S.), and retainer screws (U.S.). Model RP-502 is comprised of
double row ball bearings (U.S. or Japan), a spindle (U.S.), a
retainer plate (U.S.), a retainer gasket (U.S.), wheel studs
(U.S.), a seal (U.S.), and retainer screws (U.S.).
The RP-501 and RP-502 wheel hub assemblies may incorporate
either U.S. manufactured double row ball bearings or previously
imported Japanese double row ball bearings, depending upon
availability. You state that the actual country of origin of the
bearings in any given assembly is identifiable and visible.
ISSUES:
Under which provision of the HTSUS are the double flanged
wheel hub assemblies classifiable.
Whether the three models of double flanged wheel hub
assemblies are eligible for preferential tariff treatment under
the NAFTA.
LAW AND ANALYSIS:
CLASSIFICATION
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.
The subject wheel hub assemblies are specifically classifiable
under subheading 8708.99.58, HTSUS, which provides for: "[p]arts
and accessories of the motor vehicles of headings 8701 to 8705:
[o]ther parts and accessories: [o]ther: [o]ther: [o]ther: [d]ouble
flanged wheel hub units incorporating ball bearings." The general,
column one rate of duty for goods classifiable under this provision
is 3.1 percent ad valorem.
NAFTA APPLICABILITY
To be eligible for tariff preferences under the NAFTA, goods
must be "originating goods" within the rules of origin in General
Note 12(b), HTSUS. General Notes 12(b)(i) and (ii)(A) state:
[f]or the purposes of this note, goods imported into the
customs territory of the United States are eligible for the
tariff treatment and quantitative limitations set forth in
the tariff schedule as "goods originating in the territory
of a NAFTA party" only if --
(i) they are goods wholly obtained or produced entirely in
the territory of Canada, Mexico and/or the United
States; or
(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 subdivisions (r),
(s) and (t) of this note or the rules set forth
therein . . .
With regard to model RP-500, and models RP-501 and RP-502
which contain double row ball bearings from the U.S., because all
of the components which make up the wheel hub assemblies are from
Canada or the U.S., under General Note 12(b)(i), HTSUS, they are
eligible for preferential tariff treatment under the NAFTA.
With regard to models RP-501 and RP-502 which contain double
row ball bearings from Japan, because they contain parts from
countries other than Mexico, Canada, and/or the U.S., General Note
12(b)(i), HTSUS, does not apply. Therefore, we must resort to
General Note 12(B)(ii)(A), HTSUS.
General Note 12(t)/87.36(A), HTSUS, states:
[a] change to subheading 8708.99 from any other heading.
Therefore, any non-originating materials of the subject wheel
hub assemblies must come from a heading other than subheading
8708.99, HTSUS. The non-originating double row ball bearings are
classifiable under subheading 8482.10.50, HTSUS, which provides
for: "[b]all or roller bearings, and parts thereof: [b]all
bearings: [o]ther."
Consequently, a change in tariff classification does occur,
and, therefore, models RP-501 and RP-502, which contain double row
ball bearings from Japan, are eligible for preferential tariff
treatment under the NAFTA.
HOLDING:
The wheel hub assemblies (models RP-500, RP-501, RP-502) are
classifiable under subheading 8708.99.58, HTSUS, as double flanged
wheel hub units incorporating ball bearings.
All three models are eligible for preferential tariff
treatment under the NAFTA.
Sincerely,
John Durant, Director