CLA-2-84:RR:NC:MM:106 E87889
Ms. Monica Bowden
Sun-North Systems Ltd.
92 Railway Street
Seaforth, Ontario
Canada N0K 1W0
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of natural ventilation systems and related equipment from Canada; Article 509
Dear Ms. Bowden:
In your letter dated September 23, 1999 you requested a tariff classification ruling. You included representative samples, descriptive literature and a video with your request.
The natural ventilation systems in question are used by farmers in their livestock buildings to control the ambient temperatures in the buildings and thus assist in the care and maintenance of farm animals. There are seven (7) systems in all, each differing from the other mainly in materials, cost and specific application. These systems are: Altra-Wall, Sidewall Polly Curtains, North-Lite Panels, Therma-Curtain, Tunnel Vent, Sun-Brite Sliding Panels, and Sun-Vents. The various systems are operated either automatically by a combination of thermostat and actuator or manually with a geared winch, employing cables and pulleys to operate the several vents, windows, curtains, walls and the like of a particular system. All systems are custom-made and shipped unassembled to the customer for installation in the target livestock buildings.
The related equipment in question are ventilation chimneys and the Dark-Air light trap. The chimneys are plastic articles used by farmers in the roofs of their livestock buildings to assist in the natural ventilation of the buildings. They operate on the same theory as conventional chimneys, that is, hot, moist air generated within the building rises toward the roof and is vented through the chimney draft. The Dark-Air light trap is a plastic article fitted over fans in livestock buildings to "dark out" the interior of the building while allowing fresh air to pass through.
The applicable subheading for the natural ventilation systems in question will be 8436.80.0090, Harmonized Tariff Schedule of the United States (HTS), which provides for other agricultural machinery. The rate of duty will be free.
The applicable subheading for the ventilation chimneys will be 3925.90.0000, HTS, which provides for builders' ware of plastics, not elsewhere specified or included ... other. The rate of duty will be 5.3 percent ad valorem.
The applicable subheading for the Dark Air light trap will be 3926.90.9880, HTS, which provides for other articles of plastics ... other. The rate of duty will be 5.3 percent ad valorem.
You have indicated that the chimneys and Dark-Air light trap are manufactured in Canada. However, you have not specified the country of origin of each of the components used in the production of the chimney or Dark-Air products, including the country of origin of the resin and the materials used in the production of the resin.
If all of the materials, including the components used in the production of the resin, originate in the United States, Canada and Mexico, then the chimney and Dark-Air, being made entirely in the territory of Canada using materials which themselves were originating, will satisfy the requirements of HTSUSA General Note 12(b)(iii). The merchandise would therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
If any of the components of the chimney or Dark-Air originate in countries other than the United States, Canada and Mexico, then the finished articles may still be eligible for reduced duty under NAFTA since each of the non-originating materials used to make these two products has satisfied the changes in tariff classification required under HTSUSA General Note 12(t)/39.10. In this case, the chimney and Dark-Air will also be subject to a Regional Value Content (RVC) requirement of 60 percent under the Transaction Value Method or 50 percent under the Net Cost Method as required under the rule applicable to the two products. Assuming the goods are eligible for preferential treatment under the NAFTA, the merchandise will be free of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
If any of the materials used to make the chimney or Dark-Air are from a non-originating country and you desire a ruling regarding the Regional Value Content of your goods and their eligibility for NAFTA preferential treatment, please send the information noted in Section 181.93(b) of the Customs Regulations (19 C.F.R. ยง181.93(b)) to the Director, Commercial Rulings Division, Headquarters, U.S. Customs Service, 1301 Constitution Ave. N.W., Franklin Court, Washington, D.C. 20229, along with a copy of this letter. This information should include a breakdown showing the country of origin and cost for each material and showing the country of processing and cost for each of the manufacturing steps.
In the alternative, machinery, equipment and implements to be used for agricultural or horticultural purposes are provided for under the special classification provision of subheading 9817.00.5000, HTS. Upon compliance with the actual use requirements of Section 10.131-139 of the Customs Regulations, the chimneys and Dark-Air light trap would be classifiable in subheading 9817.00.5000, HTS, and would be free of duty.
In your ruling request you also seek to know whether you, as the manufacturer, exporter and importer of record of these goods, may execute the Proof of Use certificate required by Section 10.138 of the Customs Regulations, based on your certain knowledge of the end use of these articles for agricultural purposes. Customs recognizes that the burden placed on an importer to certify actual use is often economically and administratively unfeasible and that the enforcement of the actual use provisions must not be so burdensome as to render them ineffective in providing the intended duty-free benefits. However, since the importer of record is the party who stands to benefit from the reduced rate of duty of this special tariff provision, the importer is not relieved from the obligation to certify with certainty the end use of the goods in question. When actual use certificates are prepared by persons other than end users, Customs may consider the nature of the imported article, level of distribution, value and size of an importation, as well as other factors that the importer can demonstrate as relevant. Thus, Customs has the latitude to evaluate in a light most favorable to the importer of record, who is not the end user, any additional information the company can present that shows that the importer knows or can reasonably be expected to know that a product sold to a particular end user is being used in a qualifying agricultural or horticultural pursuit. Based on the information presented by you in this request, this office would accept a Proof of Use certificate submitted by you at the time of entry as satisfying the requirements of Section 10.138 of the Customs Regulations.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 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
Patrick J. Wholey at 212-637-7036.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division