OT:RR:CTF:EMAIN: H302170 PF
Amber Wiley
International Logistics Coordinator
Echo Inc.
400 Oakwood Blvd.
Lake Zurich, IL 60047
RE: Request for Reconsideration of NY N300601; Tariff Classification of a Pulley Assembly and a Recoil Assembly
Dear Ms. Wiley:
This is in response to your letter, dated December 5, 2018, requesting reconsideration of New York Ruling Letter (“NY”) N300601 (“reconsideration request”). NY N300601 involved the classification of a pulley assembly and a recoil assembly under the Harmonized Tariff Schedule of the United States (“HTSUS”). Upon review of NY N300601, we have determined the ruling to be correct. We are accordingly affirming the ruling.
NY N300601 provides the following description of the pulley assembly and recoil starter assembly:
The first item under consideration is referred to as a “pulley assembly”. The assembly is used in conjunction with a recoil starter and is designed to turn a coiled rope in a forward or reverse direction. The unit is installed onto the engine of an agricultural machine The second item under consideration has been identified as a “recoil starter assembly”, which is an integral part of the recoil starter system. A recoil start, also known as a manual, or pull start, is a method of starting an internal combustion engine, usually on small machines, such as lawn mowers, chainsaws, ultralight aircraft, small outboard motors and portable engine-generators.
In NY N300601, CBP classified the pulley assembly in subheading 8483.50.90, HTSUS, which provides for “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: Flywheels and pulleys, including pulley blocks: Other: Other.” In addition, CBP classified the recoil assembly in subheading 8511.90.60, HTSUS, which provides for “Electrical ignition or starting equipment of a kind used for spark-ignition or compression-ignition internal combustion engines (for example, ignition magnetos, magneto-dynamos, ignition coils, spark plugs and glow plugs, starter motors); generators (for example, dynamos, alternators) and cut-outs of a kind used in conjunction with such engines; parts thereof: Parts: Other parts.”
In NY N300601, CBP based the classification of the pulley assembly and the recoil assembly on your representation that they were imported separately. Based on the facts in NY N300601, we affirm our determination that the pulley assembly is classified in subheading 8483.50.90, HTSUS and the recoil assembly is classified in subheading 8511.90.60, HTSUS.
In your reconsideration request, you maintain that your company has the ability to import the pulley assembly and recoil assembly together in equal quantities and pursuant to General Rule of Interpretation 2(a), the unassembled parts form a complete recoil starter unit.
GRI 2(a) states that:
Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While not legally binding, the ENs provide a commentary on the scope of each heading of the HS and are thus useful in ascertaining the proper classification of merchandise. See T.D. 89-90, 54 Fed. Reg. 35127 (August 23, 1989).
The ENs to GRI 2(a) provide, in relevant part, that:
(V) The second part of Rule 2 (a) provides that complete or finished articles presented unassembled or disassembled are to be classified in the same heading as the assembled article. When goods are so presented, it is usually for reasons such as requirements or convenience of packing, handling or transport.
(VI) This Rule also applies to incomplete or unfinished articles presented unassembled or disassembled provided that they are to be treated as complete or finished articles by virtue of the first part of this Rule.
(VII) For the purposes of this Rule, “articles presented unassembled or disassembled” means articles the components of which are to be assembled either by means of fixing devices (screws, nuts, bolts, etc.) or by riveting or welding, for example, provided only assembly operations are involved.
No account is to be taken in that regard of the complexity of the assembly method. However, the components shall not be subjected to any further working operation for completion into the finished state. Unassembled components of an article which are in excess of the number required for that article when complete are to be classified separately.
The ENs to Section XVI, Note 2, HTSUS provide that:
The above rules do not apply to parts which in themselves constitute an article covered by a heading of this Section (other than headings 84.87 and 85.48); these are in all cases classified in their own appropriate heading even if specially designed to work as part of a specific machine. This applies in particular to: . . . .
CBP has consistently held that items imported in bulk for later assembly do not qualify under GRI 2(a) as incomplete or unfinished goods for classification purposes. There must be evidence that the articles will definitely be assembled after importation and that the articles are not being imported simply for inventory purposes. In addition, there must be evidence that the articles are presented for reasons such as requirements for convenience of packing, handling or transport. See HQ 088891, dated June 21, 1991 (concluding that there was no indication that the proposed shipments would be anything more than bulk shipments of equal numbers of components); see also HQ 954420, dated August 12, 1993 (finding that motor vechicle parts were parts shipped in bulk for inventory purposes), HQ 953860, dated June 23, 1993 (holding that lawn mower parts did not qualify as unassembled lawn mowers and were parts shipped in bulk for inventory purposes).
In this case, the pulley assembly and recoil assembly are not shipped unassembled for convenience of packing, handling, or transport, but as parts shipped in bulk for inventory purposes. This is not the type of “convenience of packing, handling or transport” that the Explanatory Notes contemplate. We do not classify parts intended to stock an assembly line inventory together as the finished article even if they are imported together in the proper proportion. See HQ 088891. Therefore, the importation of bulk pulley assemblies and recoil assemblies, even if consisting of all the parts to assemble a set number of recoil starter units, are not goods “unassembled” within the meaning of GRI 2(a). Accordingly, each pulley assembly and recoil assembly will be separately classifed when imported into the United States in bulk under the applicable HTSUS provisions.
For all of the aforementioned reasons, we hereby affirm NY N300601. Accordingly, the pulley assembly remains classified in heading 8483, HTSUS, specifically in subheading 8483.50.90, HTSUS, and the recoil assembly remains classified in heading 8511, HTSUS, specifically 8511.90.60, HTSUS.
In addition, effective July 6, 2018, the Office of the United States Trade Representative (“USTR”) imposed an additional tariff on certain products of China classified in the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(b), HTSUS. The USTR imposed additional tariffs, effective August 23, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(d), HTSUS. Subsequently, the USTR imposed further tariffs, effective September 24, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(f) and U.S. Note 20(g), HTSUS. For additional information, please see the relevant Federal Register notices dated June 20, 2018 (83 F.R. 28710), August 16, 2018 (83 F.R. 40823), and September 21, 2018 (83 F.R. 47974). Products of China that are provided for in subheading 9903.88.01, 9903.88.02, 9903.88.03, or 9903.88.04 and classified in one of the subheadings enumerated in U.S. Note 20(b), U.S. Note 20(d), U.S. Note 20(f) or U.S. Note 20(g) to subchapter III shall continue to be subject to antidumping, countervailing, or other duties, fees and charges that apply to such products, as well as to those imposed by the aforementioned Chapter 99 subheadings. Products of China classified under subheading 8483.50.90, HTSUS, unless specifically excluded, are currently subject to the additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.01, in addition to subheading 8483.50.90, HTSUS, listed above.
The tariff is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Notice cited above and the applicable Chapter 99 subheading.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division