MAR-05 RR:TC:SM 559946 KKV
Mr. Rudy A. Pina
R.A. Pina & Associates
P.O. Box 2496
Nogales, AZ 85628
RE: Country of origin determination for wire harnesses
assembled in Mexico; 102.11; NAFTA; Article 509;
tariff shift
Dear Mr. Pina:
This is in response to your letter dated July 1, 1996,
on behalf of North American Interconnect Company, which
requests a binding ruling regarding the country of origin
and marking requirements of certain wire harnesses assembled
in Mexico from U.S. components. No sample has been
submitted for our consideration.
FACTS:
We are informed that North American Interconnect
exports electrical insulated wire (classifiable under
subheading 8544.40, Harmonized Tariff Schedule of the United
States (HTSUS)), blades (classifiable under subheading
8536.41, HTSUS) and PVC compound (classifiable under
subheading 3904.21, HTSUS) to its maquiladora facility in
Mexico. In a telephone conversation you stated that U.S.-origin PVC compound is exported to Mexico in pellet form,
where it is melted and poured, forming a plug. The plug is
then assembled with the electrical insulated wire and the
blades, both of U.S. origin, into finished electrical wire
harnesses, classifiable under subheading 8544.41.00, HTSUS,
which are imported into the U.S. You advise that the good
is an originating good under the North American Free Trade
Agreement (NAFTA)..
ISSUE:
What is the country of origin and marking requirements
of electrical wire harnesses assembled in Mexico from U.S.
components and materials?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19
U.S.C. 1304), provides that, unless excepted, every article
of foreign origin imported into the United States 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 United States the English name of the
country of origin of the article. By enacting 19 U.S.C.
1304, Congress intended to ensure that the ultimate
purchaser would be able to know by inspecting the marking on
the imported goods the country of which the goods are the
product. The evident purpose is to mark the goods so that
at the time of purchase the ultimate purchaser may, by
knowing where the goods were produced, be able to buy or
refuse to buy them, if such marking should influence his
will. United States v. Friedlaender & Co., 27 C.C.P.A. 297,
302 C.A.D. 104 (1940).
Section 134.1(b), Customs Regulations (19 CFR
134.1(b)), defines "country of origin" as:
The country of manufacture, production,
or growth of any article of foreign
origin entering the United States.
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 the meaning of this part;
however for a good of a NAFTA country,
the NAFTA Marking Rules will determine
the country of origin.
Section 134.1(j), Customs Regulations (19 CFR 134.1(j),
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), Customs
Regulations (19 CFR 134.1(g)), 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, set forth at 19 CFR Part 102. Section
134.45(a)(2) of the Customs regulations (19 CFR
134.45(a)(2)), provides that a "good of a NAFTA country" may
be marked with the name of the country of origin in English,
French or Spanish.
Section 102.11, Customs Regulations (19 CFR 102.11),
sets forth the required hierarchy for determining whether a
good is a good of a NAFTA country for marking purposes.
This section states that the country of origin of a good is
the country in which:
(1) The good is wholly obtained or produced;
(2 The good is produced exclusively from domestic
materials; or
(3) Each foreign material incorporated in that
good undergoes an applicable change in tariff
classification set out in section 102.20 and
satisfies any other applicable requirements of
that section, and all other applicable
requirements of these rules are satisfied.
Section 102.1(e), Customs Regulations (19 CFR 102.1(e))
defines "foreign material" as "a material whose country of
origin as determined under these rules is not the same
country or origin as the country in which the good is
produced."
Based on the information provided, components and
materials of U.S. origin are exported to Mexico for assembly
into finished electrical wire harnesses prior to the
importation into the U.S. Because the harnesses are
assembled in Mexico of U.S. materials, the harnesses are
neither wholly obtained or produced, nor produced
exclusively from domestic materials. Accordingly, neither
19 CFR 102.11(a)(1) or 102.11(a)(2) may be used to determine
the origin of the finished articles.
Your letter indicates that upon exportation to Mexico
the component materials, electrical insulated wire, blades
and PVC compound, are classifiable under subheadings
8544.49, 8536.41, and 3904.21, HTSUS, respectively.
Subsequent to assembly operations in Mexico, you indicate
that the finished electrical wire harnesses are imported
into the U.S. under subheading, 8544.41.00, HTSUS, which
provides for "insulated (including enameled or anodized)
wire, cable (including coaxial cable) and other insulated
electric conductors, whether or not fitted with connectors;
optical fiber cables, made up of individually sheathed
fibers, whether or not assembled with electric conductors or
fitted with connectors: other electric conductors, for a
voltage not exceeding 80 V: fitted with connectors."
Because no sample or other information has been submitted
which would permit us to verify the validity of these
classifications, we will assume they are correct for
purposes of this ruling.
Pursuant to 19 CFR 102.11(a)(3), the country of origin
of a good is the country in which each foreign material
incorporated in that good undergoes an applicable change in
tariff classification as set forth in 19 CFR 102.20, and
satisfies any other applicable requirements of that section.
In the case before us, because the finished wire harnesses
imported into the U.S. from Mexico are classified under
subheading 8544.41.00, HTSUS, the change in tariff
classification must be made in accordance with section
102.20(p), Section XVI: Chapters 84 through 85, heading
8544.11-8544.70, HTSUS, which requires
"[a] change to subheading 8544.11 through 8544.70 from any
other subheading, including another heading within that
group, except when resulting from a simple assembly."
In the case before us, the electrical insulated wire,
initially classified under subheading 8544.49, HTSUS, and
the blades, which are initially classified under subheading
8536.41, HTSUS, and the PVC compound, which is initially
classified under subheading 3904.21, HTSUS, are subsequently
classified under subheading 8544.41.00, HTSUS, when joined
together, thus undergoing the required tariff shift.
However, the rule strictly excludes a change in tariff
classification due to "simple assembly," which requires the
"fitting together of five or fewer parts, all of which are
foreign (excluding fasteners such as screws, bolts, etc) by
bolting, gluing, soldering, sewing or by other means without
more than minor processing" (emphasis added). See 19 CFR
102.10(o).
Unlike the insulated wire and blades, the PVC compound
exported to Mexico in pellet form is not a finished
component. Instead, it is a raw material which, by virtue
of melting and molding operations, is transformed into a new
article, a molded plug, classifiable under subheading
8536.69.00, HTSUS, prior to its assembly with U.S.
components into a finished wire harness. Because the plug
is neither wholly obtained or produced in Mexico, nor
produced exclusively from Mexican materials, the origin of
the plug may not be determined under 19 CFR 102.11(a)(1) or
102.11(a)(2). Pursuant to 19 CFR 102.11(a)(3), because the
finished plug is classifiable under subheading 8536.69.00,
HTSUS, the change in tariff classification must be made in
accordance with section 102.20(p), Section XVI: Chapters 84
through 85, heading 8544.11-8544.70, HTSUS, which requires
"[a] change to subheading 8536.10 through 8536.90 from any
other subheading, including another heading within that
group." Because the PVC compound, initially classified
under subheading 3904.21, HTSUS, is subsequently classified
under subheading 8536.69.00, HTSUS, as a result of melting
and shaping operations in Mexico, the article undergoes the
required tariff shift and the PVC compound is transformed
into a domestic product - a plug of Mexican origin.
Therefore, because the three components assembled in Mexico
to create the finished wire harness are not all of foreign
origin, there is no "simple assembly" within the meaning of
19 CFR 102.12(o), and all of the conditions necessary under
the rule for the change in tariff classification of the
finished wire harness have been met. Accordingly, the
country of origin of the finished wire harnesses is Mexico,
and the articles must be marked accordingly. Acceptable
markings include, "Mexico," "Made in Mexico," "Assembled in
Mexico" or words of similar meaning.
HOLDING:
On the basis of the information provided, where PVC
compound is exported to Mexico in pellet form, where it is
melted and molded into a plug which is assembled together
with U.S. components into wire harnesses, the country of
origin of the finished wire harnesses is Mexico, and the
articles must be marked accordingly.
A copy of this ruling letter should be attached to the
entry documents filed at the time the goods are entered. If
the documents have been filed without a copy, this ruling
should be brought to the attention of the Customs officer
handling the transaction.
Sincerely,
John Durant, Director
Tariff Classification
and Appeals Division