CLA-2-84:RR:NC:1:120 R04005
Mr. Gerardo Blanco
Blanco Customs Brokerage, Inc.
420 Pan American Drive
Suite B4
El Paso, Texas 79907
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of Data Processing Machines from Mexico; Article 509
Dear Mr. Blanco:
In your letter dated May 22, 2006 you requested a ruling on behalf of Wistron Mexico LLC to determine the status of Data Processing Machines from Mexico under the NAFTA.
Wistron Mexico imports parts of data processing machines (model numbers: RA509AA, RA510AA, RA525AA, RA526AA and RA527AA) that contain the motherboard, CPU, memory, hard disk drive, floppy and or CD ROM. These models are further processed at their Twin Plant facility in Cd. Juarez, Chihuahua, Mexico. From the information provided, the BIOS ROM chip (basic input, output system read only memory) is assembled to the motherboard at the Mexican facility. This chip is soldered onto the motherboard requiring precise positioning. This process is more than a simple assembly or simple download of software.
The definitions for “Motherboard” and "BIOS ROM" can be found in The Computer Glossary, Fourth Edition. The term "Motherboard" is defined as:
The main printed circuit board in an electronic device, which contains sockets that accept additional printed circuit boards. In a personal computer, the motherboard contains the bus, the microprocessor and all the chips used for controlling the peripherals that are considered standard with the system, such as the keyboard, text and graphics display, serial and parallel ports and joystick and mouse interfaces.
The term "BIOS ROM" is defined as: the part of an operating system that
contains the machine instructions necessary to activate the peripheral
devices.
The ROM indicates that it is permanently stored in a read only memory chip. By definition, then, the motherboard contains all the devices necessary for controlling the peripherals with the system. The BIOS ROM is responsible for activating the peripheral devices. Therefore, the BIOS ROM is essential to the operation of the motherboard. Note 5(A)(a), chapter 84, HTSUS, states that: (A) For purposes of heading 8471, the expression "automatic data processing machines" means: (a) Digital machines, capable of (1) storing the processing program or programs and at least the data immediately necessary for execution of the program; (2) being freely programmed in accordance with the requirements of the user; (3) performing arithmetical computations specified by the user; and, (4) executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run.
When imported to Mexico the subject motherboard did not contain
the BIOS ROM chip. Therefore it could not perform the functions described in note 5(A)(a), chapter 84, HTSUS. The lack of the BIOS ROM chip prevents the motherboard from performing input/output functions with i.e.: the keyboard. Logic and control functions cannot be performed. Also, the processing program cannot be executed without human intervention. In this condition it is classified as a part under Heading 8473, HTSUS.
Upon further processing in Mexico, the motherboard with CPU is
imported to the US with the BIOS ROM chip, and has the essential character of a finished ADP processing unit. Because the subject motherboard has the BIOS ROM chip, essential to its operation, it imparts the essential character of a finished digital processing unit under GRI 2(a).
The applicable tariff provision for the Data Processing Machines will
be 8471.50.0085, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Digital processing units other than those of subheading 8471.41 or 8471.49, whether or not containing in the same housing one or two of the following types of unit: storage units, input units, output units: Other. The general rate of duty will be free.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
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,
Based on the facts provided, the goods described above qualify for NAFTA preferential treatment, because they will meet the requirements of a tariff shift under General Note 12(b)(ii)(A), HTSUS. As imported, the motherboard without the BIOS ROM chip would be classified under subheading 8473.30. After installation of the BIOS ROM chip, the motherboard would be classified under subheading 8471.50, thus complying with the Change in Tariff Classification Rules for Chapter 84, Chapter rule 4: 192, “A change to subheading 8471.50 from any other subheading…” The goods will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
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 Denise Faingar at 646-733-3010.
Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs and Border Protection, 1300 Pennsylvania Ave. N.W., (Mint Annex), Washington, D.C. 20229.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division