CLA-2-87:OT:RR:E:NC:N1:101
Daniel McKenzie
TYCROP Manufacturing Ltd.
9880 McGrath Road
Rosedale, British Columbia V0X1X0
CANADA
RE: The tariff classification and status under the North American Free Trade Agreement
(NAFTA), of a mobile pumper from Canada; Article 509
Dear Mr. McKenzie,
In your letter dated January 20, 2009, you requested a tariff classification ruling.
In your letter dated January 20, 2009, you requested a ruling on the status of the Mobile FRAC Pumper from Canada under the NAFTA.
The purpose of the FRAC Pumper is to pump propant, at high-pressure, into an oil well to fracture and stimulate hydrocarbons and create a shell for pumping oil from the well. The FRAC Pumper’s main components include one or two large radiators, an engine, which you state in your ruling request is in the 2250 to 2500 HP range, a matching torque converter and transmission and the FRAC pump, itself, all connected by drive shafts. The FRAC Pumper is its own power source as it has its own diesel fuel tanks, on-board control systems, batteries, etc. The Mobile FRAC Pumper does require a mated truck tractor for transporting it between service locations.
The applicable classification subheading for the Mobile FRAC Pumper will be 8705.90.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Special purpose motor vehicles, other than those principally designed for the transport of persons or goods …: Other”. The rate of duty will be Free.
You state in your request that all major parts of the Mobile FRAC Pumper are of either Canadian or U.S. origin, except the engine, and that all labor, assembly, etc. was done in Canada. You further state that the engine (15% of the Pumper’s total value) has a country of origin of England and that there are “minor components” (10% of the Pumper’s total value), such as fasteners and fittings, from Germany, other European countries, China and Taiwan.
General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. General Note 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that
For 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, or
(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or
(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or
(iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the nonoriginating materials falling under provisions for “parts” and used in the production of such goods does not undergo a change in tariff classification because--
(A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or
(B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts,
provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note.
Based on the facts provided, the goods described above qualify for NAFTA preferential treatment because they will meet the requirements of HTSUS General Note 12(b)(ii)(A). The goods will, therefore, be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements including Regional Value Content requirements specified in General Note 12(t)(Chapter 87.)(Chapter rule 1)(13.).
This ruling letter has not addressed the Regional Value Content (RVC) of the subject goods. If you desire a ruling regarding the RVC of your goods and their eligibility for NAFTA preferential treatment, provide the information noted in Section 181.93(b) of the Customs Regulations (19 CFR 181.93(b)) to U.S. Customs and Border Protection, Office of International Trade, Regulations and Rulings, Mint Annex, 799 9th Street N.W., Washington, D.C. 20001-4501, along with a copy of this letter.
Duty rates are provided for your convenience and are subject to change. The text of the most recent Harmonized Tariff Schedule of the United States and the accompanying duty rates are provided on the World Wide Web at http://ww.usitc.gov /tata/hts/.
This ruling is being issued under the provisions of Parts 177 and 181 of the Customs Regulations (19 C.F.R. 177, 181).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Richard Laman at 646-733-3017.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division