CLA-2 RR:TC:MM 960103 DWS
Ms. Fusae Nara
Donovan Leisure Newton & Irvine
30 Rockefeller Plaza
New York, NY 10112
RE: Microwave Oven Panel Assemblies; HQ 957727; NAFTA; General
Notes 12(b) and
12(t)/85.49; 8537.10.30; 8534.00.00; 8536; 8541
Dear Ms. Nara:
This is in response to letters dated December 21, 1996, from
your client, INOAC Packaging Group Inc., and June 17, April 25,
May 16, and March 4, 1997, from you on behalf of your client,
concerning the applicability of the North American Free Trade
Agreement (NAFTA) to and the classification of microwave oven
panel assemblies under the Harmonized Tariff Schedule of the
United States (HTSUS). We regret the delay of our response.
FACTS:
The merchandise consists of microwave oven panel assemblies
(Part #CPNLCB168MRKO), each of which is composed of two printed
wiring boards (PWBs), a liquid crystal display (LCD) and a key
sheet. These items are encased in a plastic housing which also
houses the door latch for the microwave oven.
The smaller PWB, which will be imported into Mexico from a
non-NAFTA country, is a printed circuit upon which a large-scale
integrated circuit (LSI) and a number of active elements are
mounted. In addition, two connectors are mounted on the LSI
board. One of the connectors is a ribbon connector which fastens
the LSI board to a seven character LCD, which functions as a
display panel of a finished microwave oven to indicate time,
feature, etc. The other connector is a 12-pin connector which
connects the LSI board to the second PWB described below.
The larger PWB is assembled in Mexico from a bare PWB which
is imported from a non-NAFTA country. Upon this PWB, a number of
elements, including relays, connectors, and a transformer, all of
which are non-originating for NAFTA purposes, will be mounted in
Mexico.
The LSI board and the larger PWB will then be soldered
together and placed in the plastic housing with a key sheet,
through which an oven user can input data for operation of the
oven. The plastic housing is manufactured from plastic resin in
Mexico. The completed panel assembly will then be imported into
the U.S. for installation into finished microwave ovens.
ISSUE:
Whether the microwave oven panel assemblies are classifiable
under subheading 8537.10.30, HTSUS, as a control panel assembled
with an outer housing for the goods of heading 8516, HTSUS, or
under subheading 8516.90.50, HTSUS, as parts of microwave ovens
of subheading 8516.50.
Whether the microwave oven panel assemblies are eligible for
preferential 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). GRI
1 provides that classification is determined according to the
terms of the headings and any relative section or chapter notes.
The HTSUS provisions under consideration are as follows:
8537.10.30: [b]oards, panels, consoles, desks, cabinets and
other bases, equipped
with two or more apparatus of heading
8535 or 8536, for electric
control or the distribution of
electricity, including those incorporating
instruments of chapter 90, and numerical
control apparatus, other
than switching apparatus of heading
8517: [f]or a voltage not exceeding
1,000 V: [a]ssembled with outer housing
or supports, for the goods of
headings 8421, 8422, 8450 or 8516.
8516.90.50: [e]lectric instantaneous or storage water
heaters and immersion
heaters; electric space heating
apparatus and soil heating apparatus;
electrothermic hairdressing apparatus
(for example, hair dryers, hair
curlers, curling tong heaters) and hand
dryers; electric flatirons; other
electrothermic appliances of a kind used
for domestic purposes;
electric heating resistors, other than
those of heading 8545; parts
thereof: [p]arts: [p]arts for the
microwave ovens of subheading
8516.50: [o]ther.
8534.00.00: [p]rinted circuits.
8536: [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.
8541: [d]iodes, transistors and similar semiconductor
devices; photosensitive
semiconductor devices, including photovoltaic
cells whether or not assembled
in modules or made up into panels; light-emitting
diodes; mounted
piezoelectric crystals; parts thereof.
Before we ascertain whether the panel assemblies are
eligible for preferential treatment under the NAFTA, we must
first determine their classification under the HTSUS.
In HQ 957727, dated October 3, 1995, we held that central
processing unit (CPU) boards for microwave ovens were
classifiable under heading 8537, HTSUS. The boards in that
ruling consisted of many of the components which are contained
within the subject panel assemblies. After importation into the
U.S., each board was attached to a plastic panel with circuits,
numbered pads and a ribbon connector.
The subject merchandise is distinguishable from the
merchandise which was the subject of HQ 957727. Although
subheading 8537.10.30, HTSUS, specifically provides for panels
assembled with housings, it is our position that the presence of
the microwave oven door latch with the assembly progresses the
assembly so that it is no longer recognizable as a heading 8537,
HTSUS, control panel, but is recognizable as a part of a
microwave oven. Once imported into the U.S., the subject panel
assemblies will consist of the control panel, the oven door
latch, encased in a housing shaped for immediate incorporation
into a microwave oven. The CPU boards in HQ 957727 were at a far
less developed stage than the subject merchandise and, therefore,
for tariff classification purposes, are not similar to the panel
assemblies.
As the panel assemblies are not classifiable under heading
8537, HTSUS, and are not described elsewhere in the HTSUS except
as parts of microwave ovens, they are classifiable under
subheading 8516.90.50, HTSUS. See section XVI, note 2(b), HTSUS.
NAFTA
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, which, in part, states that:
[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; . . .
Because the panel assemblies 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)/85.49, HTSUS, states:
49. A change to subheading 8516.90 from any other heading.
Therefore, for the panel assemblies to be originating for
NAFTA purposes, all non-originating components of the panel
assemblies must be classifiable under any heading of the HTSUS
other than heading 8516, HTSUS.
Because the LSI board possesses two connectors which are
classifiable under heading 8536, HTSUS, and controls the
operation of the microwave, it is our position that it is
classifiable under heading 8537, HTSUS.
You make the following claims as to the classification of
the non-originating components: the bare printed circuit from
which the larger PWB is produced is classifiable under heading
8534.00.00, HTSUS; the active and passive elements and
transformer mounted on the larger PWB are classifiable under
heading 8541, HTSUS; and the relays are classifiable with the
connectors under heading 8536, HTSUS.
If, as you claim, all the non-originating components of the
panel assemblies are classifiable under headings other than
heading 8516, HTSUS, they undergo the required tariff shift to
subheading 8516.90, HTSUS, and the panel assemblies satisfy the
requirement of general note 12(t)/85.49, HTSUS, and qualify as
originating goods for NAFTA purposes.
HOLDING:
The microwave oven panel assemblies are classifiable under
subheading 8516.90.50, HTSUS, as parts of microwave ovens of
subheading 8516.50.
The microwave oven panel assemblies are eligible for
preferential treatment under the NAFTA.
Sincerely,
John Durant, Director
Tariff Classification Appeals
Division