CLA-2-84:S:N:N1:110 806637
8471.91.8085; 8471.92.3200; 8471.92.2000; 8471.92.8880
Mr. John-Paul Evans
Delmar International Inc.
3270 Orlando Drive
Mississauga, Ontario
L4VIC6, Canada
RE: The tariff classification and status under the North American
Free Trade Agreement (NAFTA), of notebook and desktop
computers from Canada.
Dear Mr. Evans:
In your letter dated January 26, 1995, on behalf of Vtech
Computer Systems, you requested a ruling on the status of notebook
and desktop computers from Canada under the NAFTA.
The goods in question involves notebook computers and desktop
computers that are assembled in Canada with components that are
manufactured in various countries such as South Korea, Japan,
China, Singapore, Malaysia, and the United States.
The notebook computers, such as models 486 Notebook Series,
and the Laser LT421, are assembled in Canada from components that
originate in various countries. These computers incorporate flat
panel displays, keyboards, processor units, storage devices, and
power supplies, all in one common housing. They also include in
the shipment software, such as DOS and WINDOWS, that is on magnetic
media.
The desktop computers, such as models Laser 486 LP VL desktop
series, and the Laser 486 VL tower series, are basically desktop or
personal tower series processors, that consist of a processor unit
(with incorporated storage units and power supplies), a CRT color
monitor, a keyboard, a mouse, and software. Like the notebook
computers, these units are assembled in Canada from components of
various countries. Unlike the notebook computers, the desktop
computers incorporate a processor unit, display unit, keyboard, and
an additional input device, all of which are connectable, but in
their own housings.
The components for both the notebook and desktop computers are
claimed to originate from the following countries:
a. CPU and BIOS chips USA
b. RAM chips Korea S.
c. Motherboard w/o CPU chip China
d. Floppy Disk Drive Japan
e. Hard Disk Drive Singapore/Malaysia
f. Power Supply China
g. Computer casing China
h. Keyboard China
i. Software U.S.A.
j. Fax/modem card U.S.A.
k. Monitor S. Korea
l. Mouse U.S.A.
m. Research, Devl. & Assembling Canada
The applicable tariff provision for the Notebook 486 series of
computers will be 8471.20.0090, Harmonized Tariff Schedule of the
United States Annotated (HTSUSA), which provides for digital
automatic data processing machines, containing in the same housing
at least a central processing unit and an input and output unit.
The rate of duty is 3.5 percent ad valorem.
The software, noting Legal Note 6 to Chapter 85, is separately
classifiable under HTS number 8524.90.4090. The duty rate is 7.8
cents per square meter of recording surface. Since the software is
claimed to be of US origin, and if properly documented at time of
importation, the software may become eligible for classification
under HTS number 9801.00.10, as American Goods Returned.
The tariff language under 8471.91-8471.93 requires that
processor, input, output, and storage units that are in their
separate housings, be separately classified, noting the language of
"whether or not entered with the rest of a system".
The applicable tariff provision for the processor portion of
the desktop computers will be 8471.91.8085, HTS, which provides for
other digital processing units. The rate of duty will be 3.5
percent ad valorem.
The applicable tariff provision for the CRT color monitor used
with the desktop computer, will be 8471.92.3200, HTS, which
provides for other display units, with color cathode-ray tube
(CRT). The rate of duty will be 3 percent ad valorem.
The applicable tariff provision for the desktop keyboard will
be 8471.92.2000, HTS, which provides for keyboards. The rate of
duty will be free.
The applicable tariff provision for the desktop computer mouse
will be 8471.92.8880, as other input units. The rate of duty will
be 3 percent ad valorem. Since this article is claimed to be of US
origin, and if properly documented at time of importation to be
American Goods Returned, the mouse may be eligible under HTS number
9801.00.10, and thus free of duty.
The applicable tariff provision for the desktop computer
software will be 8524.90.4090, HTS, which provides for other
recorded media. The rate of duty will be 7.8 cents per square
meter of recording surface. Since the software is claimed to be
of US origin, and if properly documented at time of importation to
be American Goods Returned, the software may be eligible under HTS
number 9801.00.10, and thus free of duty.
NAFTA APPLICABILITY
Each of the non-originating materials used to make the
Notebook computers has satisfied the changes in tariff
classification required under HTSUSA General Note 12(t)/84.191.
The Notebook computers will be entitled to a free rate of duty
under the NAFTA upon compliance with all applicable laws,
regulations, and agreements. Since the software is claimed to be
originating material (U.S.A.), it would be eligible under NAFTA, as
per the requirements of HTSUSA General Note 12 (b)(i).
As the completed desktop computers are classifiable under such
HTS numbers as 8471.91.8085, 8471.92.3200, 8471.92.2000, and
8471.92.8880, each of these units must undergo a change in tariff
classification if non-originating materials are used to assemble
these units.
Each of the non-originating materials used to make the
processor portion of the desktop computers has satisfied the
changes in tariff classification required under HTSUSA General Note
12 (t)/84.191. The desktop processor units will be entitled to a
free rate of duty under the NAFTA upon compliance with all
applicable laws, regulations, and agreements.
A change in tariff classification does not occur for the CRT
monitor and keyboard units for the desktop computer series.
Therefore, the CRT monitor and keyboard units are not eligible for
preferential tariff treatment under the NAFTA pursuant to General
Note 12(b)(ii))A), HTSUS.
The software for the desktop computers under HTS number 8524,
and the mouse for the desktop computer under 8471.92.8880, are
claimed to be of US origin. If properly documented at time of
importation that these are in fact originating materials, they
would be eligible under NAFTA, as per the requirements of General
Note 12(b)(i).
A copy of this ruling letter should be attached to the entry
documents filed at the time this merchandise is imported. If the
documents have been filed without a copy, this ruling should be
brought to the attention of the Customs officer handling the
transaction.
This ruling letter is binding only as to the party to whom it
is issued and may be relied on only by that party.
Sincerely,
Jean F. Maguire
Area Director
New York Seaport