CLA-2 OT:RR:CTF:TCM H167975 RES
U.S. Customs and Border Protection
Port of Chicago
9915 Bryn Mawr
Rosemont, IL 60018-5213
ATTN: Marlene Gothelf, Supervisory Import Specialist
RE: Internal Advice Request; Tariff classification and entry document requirements of military vehicle components.
Dear Port Director:
On May 25, 2011, you requested internal advice with regard to the tariff classification and entry document requirements of military vehicle components under the Harmonized Tariff Schedule of the United States (“HTSUS”). Your request was initiated by a submission dated April 8, 2011, on behalf of Oshkosh Corporation (“Oshkosh”). This letter responds to your request. We regret the delay in our reply.
FACTS:
The articles at issue are parts and components designed for use in military vehicles that contain armored components. The parts and components are imported by Oshkosh and used in the manufacture of its military vehicles. Oshkosh has referenced two specific components as representative samples of the type of components that are at issue. One referenced part is called a “raw forging,” (part # 127264X900) that is used in Heavy Expanded Mobility Tactical Truck (“HEMTT A4”) military cargo vehicles. It is a component of the front solid-axle assembly that connects the wheel hub to the axle of the vehicle. The HEMTT A4’s built by Oshkosh all leave the factory with at least some form of armor installed and are intended to carry cargo and provide transport for other tasks into and out of combat zones and the front lines. The military may arm some of the versions of the HEMTT A4. The second referenced part is a gear (part # 3002345) that is contained within the differential of each drive axle of a Medium Tactical Vehicle Replacement (“MTVR”) military vehicle or a Logistics Vehicle System Replacement (“LSVR”) military vehicle. These vehicles are used to move cargo from port to base or recover damaged or broken vehicles from the front line. The LSVR leaves the factory at least partly armored, and may also be armed by the military. The differential gear allows the outer-wheel of a vehicle to turn at a faster rate than the inner-wheel as a vehicle turns, which creates a smoother drive and prevents chassis vibration inside the vehicle.
The raw forging and gear differential were initially classified under subheading 8708.29.50, HTSUS, as parts of a motor vehicle for the transport of goods. U.S. Customs and Border Protection (“CBP”) subsequently reviewed the classification of the components and changed the classification to subheading 8710.00.00, HTSUS, as parts of motorized military vehicles, effective January 1, 2011. Articles classifiable under heading 8710, HTSUS, may be subject to required import licenses and permits issued by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”) and the Department of State’s (“State Department”) Directorate of Defense Trade Controls (“DDTC”), unless an article falls under an exemption from such import documentation.
Oshkosh requested a Commodity Jurisdiction (“CJ”) determination from the State Department on whether the vehicles the imported components are used with were subject to the State Department’s import licensing and permit requirements. The State Department responded that the baseline models (those without weapons or additional armor) for the LSVR, MTVR, and HEMTT vehicles when used for cargo transport are not subject to “the licensing jurisdiction of the Department of State.” These determinations are listed as follows:
Case Number Date Article
ECJ-027-10 11.5.10 TAK-4 Independent Front Suspension System
CJ287-10 6.25.10 HET M1070 A1
CJ496-10 11.4.10 HEMTT M977 A4 Cargo Truck
ECJ-039-10 11.23.10 LVSR MKR18 Cargo Truck
ECJ-116-10 1.12.11 MTVR AMK25 Cargo Truck
CJ-057-11 3.8.11 LVSR MKR15 Wrecker
Based on these CJ determinations, Oshkosh asserts that the imported vehicle components are not subject to the licensing and permitting requirements of the ATF and State Department and therefore Oshkosh is not required to obtain any permits for entry of components of the military vehicles at issue here.
ISSUE:
Whether the subject military vehicle components are classified under heading 8710, HTSUS?
What are the entry document requirements for the instant military vehicle components?
LAW AND ANALYSIS:
According to Oshkosh, the two articles at issue here were selected as representative samples of components it imports for its LSVR, MTVR, and HEMTT cargo and transport vehicles. Oshkosh is not contesting the classification of the imported components in heading 8710, HTSUS. Rather, Oshkosh is requesting confirmation of the classification of the imported components in this heading and a determination of what entry documents are required. These issues are addressed in turn.
Classification of Military Vehicle Components
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that the classification of goods shall be “determined according to the terms of the headings and any relative section or chapter notes.” In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI 2 through 6 may be applied in order.
The following HTSUS provisions are under consideration:
8483 Transmission shafts (including camshafts and crankshafts) and cranks; bearing housings, housed bearings and plain shaft bearings; gears and gearing; ball or roller screws; gear boxes and other speed changers, including torque converters; flywheels and pulleys, including pulley blocks; clutches and shaft couplings (including universal joints); parts thereof:
8704 Motor vehicles for the transport of goods:
8708 Parts and accessories of the motor vehicles of headings 8701 to 8705:
8710.00.00 Tanks and other armored fighting vehicles, motorized, whether or not fitted with weapons, and parts of such vehicles:
* * *
8710.00.0090 Parts:
The Notes to Section XVII provide in relevant part:
* * * * *
2. The expressions “parts” and “parts and accessories” do not apply to the following articles, whether or not they are identifiable as for the goods of this section:
* * *
(e) Machines or apparatus of headings 8401 to 8479, or parts thereof; articles of heading 8481 or 8482 or, provided they constitute integral parts of engines or motors, articles of heading 8483;
* * *
3. References in chapters 86 to 88 to “parts” or “accessories” do not apply to parts or accessories which are not suitable for use solely or principally with the articles of those chapters. A part or accessory which answers to a description in two or more of the headings of those chapters is to be classified under that heading which corresponds to the principal use of that part or accessory.
* * * * *
In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System, which constitute the official interpretation of the Harmonized System at the international level, may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
The ENs to 87.10 provide in relevant part:
This heading covers tanks and other armoured fighting “Vehicles, motorized, whether or not fitted with weapons, and” parts of such vehicles.
* * * * *
This heading also covers:
* * *
(B) Armoured supply vehicles, generally of the track-laying type, whether or not they are designed to be armed; these are used for the transport of petrol, ammunition, etc., in fighting areas.
* * *
PARTS
The heading also covers parts of the above-mentioned vehicles provided the parts fulfill both the following conditions:
They must be identifiable as being suitable for use solely or principally with such vehicles; and
(ii) They must not be excluded by the provisions of the Notes to Section XVII (see the corresponding General Explanatory Note).
* * * * *
The articles at issue here are described by the importer as components for military cargo vehicles. The initial step is to determine the classification of the vehicle the components are used in. In general, military cargo vehicles are classifiable under heading 8710, HTSUS.
Ordinarily, trucks used for the transport of goods are classifiable under heading 8704, HTSUS. However, for vehicles like Oshkosh’s that are lightly armored and used by the military in and around combat areas, CBP has previously classified such vehicles under heading 8710, HTSUS. In HQ 958995, dated May 6, 1996, CBP revoked a previous ruling classifying an amphibious off-road truck under heading 8704, HTSUS, and reclassified the truck under heading 8710, HTSUS, because the truck was armored and was used to transport goods and persons in fighting areas. In HQ 957890, dated May 7, 1996, CBP granted a protest classifying the same type of vehicle that was the subject of HQ 958995, under heading 8710, HTSUS, instead of heading 8704, HTSUS.
Thus, because the importer’s LSVR, MTVR, and HEMTT cargo and transport vehicles are used by the military in and around combat areas and they possess some level of armor they are classifiable under heading 8710, HTSUS.
The next step is to determine the classification of the forging and gear differential components used in Oshkosh’s military transport vehicles that are classifiable under heading 8710, HTSUS. Using the ENs to 87.10 as guidance, parts of vehicles under this heading are covered by heading 8710, HTSUS, if the parts are suitable for use solely or principally with vehicles of heading 8710 and are not excluded by any other Notes of Section XVII. Oshkosh indicated that the forging part is primarily used with the HEMMT cargo and transport vehicles even though it could be used in commercial vehicles not classifiable under heading 8710. The differential gear articles were designed and manufactured to be used with the LSVR and MTVR military cargo and transport vehicles and are primarily used in the manufacture of those vehicles; however, Oshkosh has noted that the differential gear has been used in the manufacturing of commercial vehicles, such as airport firefighting trucks. Thus, both the forging and the gear differential are suitable to be principally used in vehicles classifiable under heading 8710, HTSUS, and satisfy Note 3 to Section XVII. Furthermore, neither article is excluded by Note 2(e) to Section XVII, as these articles are parts of the drive train and not considered to be integral parts of engines or motors. Accordingly, the forging and the gear differential would not be classifiable under heading 8708, HTSUS, because of the following reasons: (a) the vehicles these articles are used in are not classifiable under heading 8704, HTSUS; (b) these articles fall under the definition of parts of heading 8710 pursuant to EN 87.10; and (c) these articles are not excluded from heading 8710 based on Note 2(e) XVII, Note 3 XVII, or any other legal notes.
In addition, as the importer noted, gear differentials for vehicles may be classifiable under heading 8483, HTSUS. See NY G86669, dated February 13, 2001. However, Note 1(l) to Section XVI excludes from Section XVI articles of Section XVII, of which heading 8710, HTSUS, falls under. Since the gear differentials are classifiable under Section XVII, they are excluded from classification under Section XVI and consequently, heading 8483, HTSUS.
Finally, other parts used in the manufacture of the cargo and transport vehicles may be classifiable under heading 8710, HTSUS, if these other parts meet the definition of parts of heading 8710 in light of EN 87.10 (are suitable for use solely or principally with vehicles of heading 8710) and are not excluded by Legal Notes of Section XVII, i.e., Note 2 to Section XVII and Note 3 to Section XVII, and are not provided elsewhere in the HTSUS. Therefore, the gear differentials and raw forgings are classifiable under subheading 8710.00.00, HTSUS.
Entry Documentation Requirements
Goods classified under heading 8710, HTSUS, may be subject to import requirements applicable to articles covered by the United States Munitions Import List (“USMIL”) or the United States Munitions List (“USML”). The duration of an import of such articles determines which list is applicable. Articles that are imported in permanently are subject to the USMIL and ATF regulations, while articles that are temporary imports (e.g., articles that will be re-exported) are subject to the USML and the State Department regulations.
To secure the release of permanent imports covered by the USMIL and regulated by the ATF, the importer must complete Section I of ATF Form 6A and present it to CBP along with its import permit, ATF Form 6. See 27 CFR § 447.45(a)(1). Temporary imports of articles on the USML require the State Department’s DDTC license DSP-61 or an exemption. See 22 CFR § 123.3.
To determine whether an article is on the USML and the USMIL, the Commodity Jurisdiction (“CJ”) procedure may be used. In this procedure, the importer submits a Commodity Jurisdiction Form to the State Department so that it can determine whether an article is listed on the USML. Prior to August 2013, the Commodity Jurisdiction Determinations did not apply to articles on the USMIL as the State Department only determined whether an article was listed on USML. Beginning August 2013, the State Department considers whether an article is listed on both the USML and USMIL when issuing Commodity Jurisdiction Determinations related to imports.
With regard to items found on the USMIL, the ATF regulations provide for several exemptions to importation requirements, including an exemption for the importation of components for items being manufactured under contract for the Department of Defense. See 27 CFR § 447.53(a)(2). An importer seeking to import articles on the USMIL as exempt under this provision may obtain release of such articles from CBP custody by submitting, to the CBP officer with authority to release, a statement claiming the exemption accompanied by satisfactory proof of eligibility. See 27 CFR § 447.53. Articles that are not on the USMIL or the USML do not require the DDTC license DSP-61 or exemption, nor do they require the presentation of ATF Form 6A or Form 6 or self-certification for release. For such articles, only the standard entry documents set forth in 19 CFR § 142.3 are required.
With regard to the articles at issue here, the State Department has determined in the CJ determinations listed in the FACTS section that Oshkosh’s LSVR, MTVR, and HEMTT cargo and transport vehicles are not on the State Department’s USML, and therefore no DDTC license is required for release of the imported parts of these vehicles. However, since these CJ determinations were performed in 2010 and 2011, they only apply to imported parts of these vehicles that are temporary imports because, as noted supra, the State Department did not check the USMIL during that time. According to an email dated July 2, 2014, from the ATF, parts classifiable under heading 8710, HTSUS, were listed under Category VII of the USMIL prior to April 28, 2014, and thus, if imported permanently, were subject to ATF permit requirements. However, these parts were removed from the USMIL when the ATF updated 27 CFR part 447 and thus, were no longer subject to ATF permit requirements. See 79 Fed. R. 17025 (Mar. 27, 2014).
Therefore, for parts classifiable under heading 8710 entered prior to April 28, 2014, for permanent import, Section I of ATF Form 6A and Form 6 are required for entry, unless Oshkosh (or any other importer of such articles) provides the proper certification that the importation is exempt from ATF import requirements by virtue of 27 CFR § 447.53(a)(2). If said parts are entered on or after April 28, 2014, no ATF forms are required for entry, only the standard entry documents set forth in 19 CFR § 142.3 are required. See http://www.atf.gov/content/firearms/firearms-industry/guides/types-processing-forms-6a (last visited July 7, 2014).
HOLDING:
The raw forging, gear differential, and similar components of the baseline HEMTT, MTVR, and LVSR, military cargo vehicles are classified under the subheading 8710.00.0090, HTSUSA, as “[t]anks and other armored fighting vehicles, motorized, whether or not fitted with weapons, and parts of such vehicles: [p]arts”. The column one, rate of duty is free.
For the raw forging, gear differential, and similar components, that are entered prior to April 28, 2014, Section I of ATF Form 6A and ATF Form 6 are required, along with the standard entry documents set forth in 19 CFR § 142.3 are required.
For the raw forging, gear differential, and similar components, that are entered on or after April 28, 2014, only the standard entry documents set forth in 19 CFR § 142.3 are required. There are no additional documents required for the release of articles that are not covered by the USMIL.
You are to mail this decision to the internal advice requestor no later than sixty days from the date of the decision. At that time, Regulations and Rulings of the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division