MAR-02 RR:TC:SM 560352 JML
Ms. Heather J. Missouri
Vice President, General Manager
Import Custom Services Inc.
190 Attwell Drive
Suite 602
Etobicoke, Ontario
Canada M9W 6H8
RE: Country of origin marking for imported automobile clutch
kit; NAFTA; essential character; 19 CFR Part 102.
Dear Ms. Missouri:
This is in response to your letter of March 13, 1997, in
which your requested a binding ruling regarding the country of
origin marking requirements for imported clutch kits. We regret
the delay in responding.
FACTS:
Your client, Fenwick Automotive Products, ships certain
automobile clutch kits into the United States ("U.S."). The
clutch kit is comprised of three primary components: a pressure
plate, a clutch disc and a release bearing. According to your
submission, the pressure plate constitutes the chief component of
the kit by value. The components are of various origins,
including the U.S., but excluding Canada.
The components are sent from their respective countries of
origin to Canada where they are packaged for retail sale in the
U.S. market. You contend that although it is labeled a kit, both
the general public and the industry consider the clutch kit to be
a replacement after-market automotive clutch assembly.
Accordingly, you state that the clutch kit is classifiable under
subheading 8708.93, Harmonized Tariff Schedule of the United
States ("HTSUS") (parts and accessories of the motor vehicles of
headings 8701 to 8705: clutches and parts thereof..)
ISSUES:
1) What is the proper tariff classification for the imported
clutch kits?
2) What are the country of origin marking requirements for
the imported clutch kits?
LAW AND ANALYSIS:
CLASSIFICATION
As a preliminary matter, the proper tariff classification of
the clutch kit must be determined. Based upon the facts
submitted, the clutch kit consists of three "primary" components,
a pressure plate and cover, a clutch disc, and a release bearing.
You refer to these components collectively as an unassembled
clutch, pursuant to General Rule of Interpretation ("GRI") 2(a),
HTSUS, and contend it is classifiable in heading 8708, HTSUS
(parts and accessories of motor vehicles of headings 8701 to
8705).
However, a schematic accompanying the clutch assembly
depicts additional parts that are necessary to complete a clutch,
i.e., a clutch housing, shield and bracket, clutch release lever
and lever seat, and pilot bearing, plus the rear engine cover
plate and flywheel which are parts of the engine. Nevertheless,
based on the available information, it is apparent that the
pressure plate, clutch disc, and release bearing constitute the
aggregate of distinctive component parts which establish the
identity of a clutch. As such, we conclude, under GRI 2(a),
HTSUS, that the imported components have the essential character
of a complete or finished clutch and should be so classified.
As to where the good is to be classified, clutches are
provided for eo nomine, by name, in heading 8483, HTSUS.
Clutches and parts of clutches for motor vehicles of headings
8701 to 8705, other than those for tractors suitable for
agricultural use, are provided for in heading 8708, HTSUS. Note
1(l) of Section XVI, HTSUS, which includes heading 8483, HTSUS,
excludes articles of Section XVII, HTSUS, which includes heading
8708, HTSUS. But, Section XVII, Note 2(e), HTSUS, states, in
part, that the expression "parts and accessories" does not apply
to articles of heading 8483, HTSUS, provided they constitute
integral parts of engines or motors. Because of the additional
components necessary to attach the clutch to the engine, we
conclude that the clutch is not an integral part of the engine.
Thus, the Note 2(e) exclusion does not apply and the clutch may
be a good of Section XVII, HTSUS, if otherwise qualified. As
such, it would be excluded from heading 8483 by Section XVI, Note
1(l), HTSUS.
For the stated reasons, the imported components are to be
regarded as a complete or finished clutch for tariff purposes.
Because it is apparent that the clutch is solely or principally
used with motor vehicles of headings 8701 to 8705, it is provided
for in heading 8708, HTSUS, and is classifiable in subheading
8708.93.60, HTSUS.
We next address the classification of the three clutch
components, if imported separately. From the available
information, we are unable to determine if the clutch release
bearing is a mere bearing or a machinery part that incorporates a
bearing. Under GRI 1, the clutch release bearing, which we
presume to incorporate balls and not rollers, appears to be
provided for in heading 8482, HTSUS, a provision for ball or
roller bearings. It is classifiable in subheading 8482.10.50,
HTSUS (other ball bearings). The clutch pressure plate and
cover, together with the clutch disc, appear to be parts of
clutches of subheading 8708.93.60, HTSUS. Each is classifiable
in subheading 8708.93.75, HTSUS.
MARKING
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 1304.
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. (Emphasis
added).
The country of origin marking requirements for a "good of a
NAFTA country" are 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). 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 U.S. as determined
under the NAFTA Marking Rules set out at Part 102, Customs
Regulations (19 CFR Part 102).
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. That 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.
Because the clutch kits are packaged in Canada from
components of various origins, they cannot be considered wholly
obtained or produced, nor produced exclusively from domestic
materials. In such circumstances, section 102.11(a)(3) is next
applied. Under section 102.11(a)(3), the country of origin of a
good is the country in which each foreign material incorporated
in that good under goes an applicable change in tariff
classification set out in section 102.20, Customs Regulations (19
CFR 102.20). As stated above, the imported clutch kit is
classified under subheading 8708.93.60, HTSUS (parts and
accessories of the motor vehicles of headings 8701 to 8705:
clutches and parts thereof..). The clutch release bearing is
classifiable in subheading 8482.10.50, HTSUS (other ball
bearings), and the pressure plate and disc are both classifiable
in subheading 8708.93.75, HTSUS (parts of clutches of subheading
8708.93.60).
The applicable change in tariff classification for
subheading 8708.93, HTSUS, set out in section 102.20(p), Section
XVII, Chapters 86 through 89, provides:
A change to subheading 8708.93 from any other
subheading.
As the clutch release bearing is classifiable in subheading
8482.10.50, HTSUS, it clearly satisfies the tariff shift rule.
The pressure plate and disc, however, do not meet that rule since
they are both classifiable in subheading 8708.93, HTSUS.
Furthermore we note that section 102.17, Customs Regulations (19
CFR 102.17), states that a foreign material shall not be
considered to have undergone an applicable change in tariff
classification by reason of simple packing, repacking or retail
packaging without more than minor processing. In the present
case, the facts presented indicate that the Canadian operations
consist only of retail packaging. Consequently, by operation of
section 102.17, the clutch release bearing (the only foreign
material which satisfies the above tariff shift rule) will not be
considered to have undergone an applicable change in tariff
classification.
In such circumstances, the next step in the hierarchy is
section 102.11(b), Customs Regulations (19 CFR 102.11(b)). That
section states:
[e]xcept for a good that is specifically described in
the
Harmonized System as a set, or is classified as a set
pursuant to General Rule of Interpretation 3, where the
country of origin cannot be determined under paragraph
(a) of this section:
(1) [t]he country of origin of the good is the
country or countries of origin of the single
material that imparts the essential character to
the good....
As described above, the clutch kit is not classified as a
set under the HTSUS. Section 102.18(b)(1), Customs Regulations
(19 CFR 102.18(b)(1)), provides that for purposes of applying
section 102.11, only those domestic and foreign materials that
are classified in a tariff provision from which a change in
tariff classification is not allowed in the rule for the good set
out in section 102.20 shall be taken into consideration in
determining the parts or materials that determine the essential
character of the good. Moreover, section 102.18(b)(2), Customs
Regulations (19 CFR 102.18(b)(2)), states that for purposes of
determining which material imparts the essential character to a
good, various factors may be examined depending upon the type of
good involved. Those factors may include but not be limited to,
the nature of the material as its bulk, quantity or value and the
role the material plays relative to the good's use.
In applying the above factors we first note the purpose of
an automobile clutch -- to disconnect the engine crankshaft from
the gearbox while shifting gears. Of particular significance is
the role the pressure plate plays in achieving that end. The
pressure plate discontinues or continues the rotary motion of the
engine crankshaft from the gearbox so that gears may be shifted.
Indeed, the other components, the release bearing and the clutch
disc, serve the pressure plate so that it may perform that
function. Thus, based upon the major role the pressure plate
plays relative to the use of the clutch and the information you
presented which indicates that it represents the chief component
of the clutch kit by value, Customs is of the opinion that the
pressure plate represents the essential character of the clutch
kit. That is, the country of origin of the imported clutch kit
is the country of origin of the material which imparts its
essential character, the pressure plate.
HOLDING:
Based upon the information submitted, the proper tariff
classification of the imported clutch kits packaged in Canada is
subheading 8708.93.60, HTSUS (parts and accessories of the motor
vehicles of headings 8701 to 8705: clutches and parts thereof..).
For marking purposes, Customs is of the opinion that pursuant to
section 102.11(b), Customs Regulations, the country of origin of
the clutch kits is the country of origin of the pressure plate,
the material which imparts the essential character to the kit.
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
Commercial Rulings Division