CLA-2 RR:CR:GC 962063 DWS
Mr. Jonathan M. Fee
Grunfeld, Desiderio, Lebowitz & Silverman, LLP
303 Peachtree Street, N.E., Suite 2980
Atlanta, GA 30308
RE: PCB Base Assemblies
Dear Mr. Fee:
This is in response to your letter of July 22, 1998, on
behalf of Omron Dualtec Automotive Electronics, Inc. (Omron),
concerning the classification of printed circuit board (PCB) base
assemblies for relays under the Harmonized Tariff Schedule of the
United States (HTSUS), and the applicability of the North
American Free Trade Agreement (NAFTA) to the complete relays.
FACTS:
In Canada, several components that are sourced outside of
Canada are assembled together to make an automobile relay. Each
relay incorporates three non-originating components, a contact, a
resistor, and a PCB base assembly. The components at issue
constitute the Korean-made PCB base assemblies for the relays,
each of which consists of a square plastic molded base
(approximately 1" by 1") with solder points on its bottom side
for attachment to a PCB.
In Canada, each Korean-made PCB base assembly is assembled
with other originating components, such as an electromagnetic
coil, consisting of a plastic bobbin and coiled wire; a
ferromagnetic core pin, which fits inside the bobbin and becomes
magnetized with the passage of current through the coil; a yoke
that holds the bobbin; a spring assembly (consisting of a spring
and either one or two contacts); and an armature, which is
attached to the spring assembly to move according to the
electromagnetic force applied by the pin. The assembled relay is
then inserted into a plastic "indoor" housing cover (for use
under the dashboard) or "outdoor" housing cover (for use under
the hood) for subsequent installation in an automobile for
signaling and other similar applications. The lip around the
outer edge of the plastic base assembly allows the base to fit
snugly with the cover, forming a protective, sealed closure.
ISSUE:
Whether the PCB base assemblies are classifiable under
subheading 8538.90.80, HTSUS, as parts of relays of heading 8536,
HTSUS.
Whether the complete relays 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:
8538 Parts suitable for use solely or principally with the
apparatus of heading 8535, 8536 or 8537:
8538.90 Other:
Other:
8538.90.80 Other.
* * * * * * * * *
You claim that the Korean-made PCB base assemblies are parts
of relays properly classifiable in heading 8538, HTSUS. The
completely assembled automobile relays are properly classifiable
in heading 8536, HTSUS, specifically under subheading 8536.41.00,
HTSUS, as relays for a voltage not exceeding 60 V.
Section XVI, note 2, HTSUS, states that:
[s]ubject to note 1 to this section, note 1 to chapter 84 and to note 1
to chapter
85, parts of machines (not being parts of the articles of heading 8484,
8544,
8546 or 8547) are to be classifiable according to the following rules:
(a) Parts which are goods included in any of the headings of chapters
84 and 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8485,
8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in
their respective headings;
(b) Other parts, if suitable for use solely or principally with a
particular kind of machine, or with a number of machines of the
same heading (including a machine of heading 8479 or 8543) are to be
classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However,
parts which are equally suitable for use with goods of headings
8517 and 8525 to 8528 are to be classified in heading 8517;
(c) All other parts are to be classified in heading 8409, 8431, 8448,
8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing
that, in heading 8485 or 8548.
There is no question that the subject PCB base assemblies
are parts of automobile relays and classifiable in heading 8538,
HTSUS. We also find that the assemblies are not described
elsewhere in chapters 84 or 85, HTSUS, so application of section
XVI, note 2(a), HTSUS, is precluded. Consequently, in accordance
with section XVI, note 2(b), HTSUS, because the assemblies are
parts of relays, themselves goods of heading 8536, HTSUS, it is
our position that the assemblies are classifiable under
subheading 8538.90.80, 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 relays contain the Korean-made base assemblies,
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)/85.120(A), HTSUS, states:
[a] change to heading 8536 from any other heading, except from tariff
items 8538.90.10,
8538.90.30 or 8538.90.60.
As we have previously stated, the PCB base assemblies are
parts of relays classifiable under subheading 8538.90.80, HTSUS.
Therefore, the assemblies undergo the proper tariff shift to
heading 8536, HTSUS, as required by General Note 12(t)/85.120(A),
HTSUS. Consequently, the complete relays are eligible for
preferential treatment under the NAFTA.
HOLDING:
The PCB base assemblies are classifiable under subheading
8538.90.80, HTSUS, as parts of relays of heading 8536, HTSUS.
The complete relays are eligible for preferential treatment
under the NAFTA.
Sincerely,
John Durant, Director
Commercial Rulings Division