MAR-2 OT:RR:E:NC:1:105
Mr. Jorge Alberto Torres
Interlink Trade Services
10601 South Jackson Rd.
Suite 200
Pharr, TX 78577
RE: COUNTRY OF ORIGIN MARKING AND TARIFF CLASSIFICATION OF IMPORTED HEARING AIDS; ARTICLE 509
Dear Mr. Torres:
This is in response to your letter dated January 24, 2009, for Starkey Laboratories, requesting a ruling on the country of origin marking requirements and classification for an imported article, which is claimed to be a good of a NAFTA country, that is later to be further processed in the U.S. into a finished article. A marked sample was not submitted with your letter for review.
You ask:
Is the BTE hearing aid blank assembly exempted from individual country of origin marking when imported to the U.S.?
Does the final configuration in the U.S. of the BTE hearing aid blank assemblies allow the final BTE hearing assembly to be marked “Made in USA”?
Is the BTE hearing aid blank assembly classified under HTSUS 9021.90.4040 when imported from Mexico?
The items are various stock numbers of Starkey Behind the Ear hearing aids that are sold to hearing professionals for fitting, adjusting, and sale to end users.
You state the processing in the USA will be:
Import - The blank assemblies are received here from the Matamoros, Mexico manufacturing facility into the Brownsville, Texas facility. The blank assemblies are segregated into a “Blank Stores” location.
Brand & Program - Final assembly stock levels are replenished daily. A replenishment schedule is created based on the results of the report. This is the point where the new final assembly part is identified. The first step is to electronically “brand” the blank hearing aid assembly to its final company model and configuration. The Branding process sets a number of firmware parameters that define the functionality of the product; including the company and product model (multiple company and model configurations are available from a single device.) The final Programming process encompasses a significant number of Manufacturing Settings. This includes the ship settings and Best Fit Settings required for the operation of the device by the hearing professional. Lack of these settings results in an error message during the initial read and an inability to proceed any further with the patient fitting.
Print - After branding, the blank hearing aid has the company name and model number printed on the exterior of the case. This process varies by a Tampo-printer. This operation provides the visual differentiation between company and model.
Coat - Once printed, the proprietary moisture coat is applied to the exposed surfaces of the hearing aid. This critical operation dramatically improves the product’s performance in the field and must occur after all other exterior process steps are complete.
Stock - A new part number is applied to the product after the completion of the coating process. The product is now in its final form and is ready for distribution.
Ship - Upon receipt of an order, the product is pulled from stock, packaged and invoiced, completing the hearing aid assembly configuration cycle.
Since it directly affects the country of origin determination, we will first consider the classification of the hearing aid blank assemblies as they leave Mexico.
You propose classification in HTSUS 9021.90.4040 as parts or accessories of hearing aids. However, whether they are incomplete or unfinished hearing aids must be considered.
Harmonized System Explanatory Note II to General Rule of Interpretation 2 (a) - (Incomplete or unfinished articles) states:
(I) The first part of Rule 2 (a) extends the scope of any heading which refers to a particular article to cover not only the complete article but also that article incomplete or unfinished, provided that, as presented, it has the essential character of the complete or finished article.
(II) The provisions of this Rule also apply to blanks unless these are specified in a particular heading. The term " blank " means an article, not ready for direct use, having the approximate shape or outline of the finished article or part, and which can only be used, other than in exceptional cases, for completion into the finished article or part (e.g., bottle preforms of plastics being intermediate products having tubular shape, with one closed end and one open end threaded to secure a screw type closure, the portion below the threaded end being intended to be expanded to a desired size and shape).
Also, HS EN (II) to Chapter 90 states:
Provided they have the essential character of the complete or finished article, incomplete or unfinished machines, appliances, instruments or apparatus are classified with the corresponding complete or finished articles (for example, a photographic camera or a microscope presented without its optical elements or an electricity supply meter without its totalling device).
Given the explanatory language and the examples given, we find your imports from Mexico to be incomplete or unfinished hearing aids.
The applicable subheading for the imported “blank assemblies” will be 9021.40.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Hearing Aids, excluding parts and accessories thereof. The rate of duty will be Free.
The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.
The country of origin marking requirements for a “good of a NAFTA country” are also determined in accordance with Annex 311 of the North American Free Trade Agreement (“NAFTA”), as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057) (December 8, 1993) and the appropriate Customs Regulations. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in Part 102, Customs Regulations. The marking requirements of these goods are set forth in Part 134, Customs Regulations.
Section 134.1(b) of the regulations, defines “country of origin” as
the country of manufacture, production, or growth of any article of foreign origin entering the U.S. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the “country of origin within this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.
Section 134.1(j) of the regulations, provides that the “NAFTA Marking Rules” are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) of the regulations, defines a “good of a NAFTA country” as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules. Section 134.45(a)(2) of the regulations, provides that a “good of a NAFTA country” may be marked with the name of the country of origin in English, French or Spanish.
You state that the country of origin of the hearing aids as they leave Mexico is Mexico, and the information you have supplied is consistent with that so we will take that to be the case for this ruling.
The only issue which remains is whether the U.S. processor is the ultimate purchaser within the meaning of section 134.35(b). Section 134.35(b) of the regulations, provides that
a good of a NAFTA country which is to be processed in the United States in a manner that would result in the good becoming a good of the United States under the NAFTA marking rules is excepted from marking.
Based on the facts of this case, we find that the imported blank assemblies do not become articles of U.S. origin under Part 102 of the regulations, specifically CR 102.20-q, 9021.21-9021.90.
You believe that the US processor is the ultimate purchaser for marking purpose. You quote regarding CR 134.35 from New York Ruling Letter N005927 – 120, February 23, 2007. However, whether or not the processing here is comparable to the processing for those items, that ruling was, in fact, specifically concerning CR 134.35 (a), since the country or origin of those imported printed circuit board assemblies was China, not a NAFTA country.
Accordingly, the imported blank assemblies, which are goods of a NAFTA country, are not excepted from individual marking as products of Mexico. Therefore, the possibility of a marking of the final assembly as “Made in USA” is precluded.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 CFR Part 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 James Sheridan at (646) 733-3012.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division