MAR-2-05 RR:TC:SM 560108 DEC
Category: Marking
Mr. Gary Cooper
Horton, Whiteley & Cooper
One Kaiser Plaza, Suite 1410
Oakland, California 94612
RE: Country of origin marking of remote keyless entry; NAFTA
Article 509;
19 CFR Part 102; 19 CFR Part 134; HRL 953013; 19 CFR
134.35(b);
19 CFR 134.46
Dear Mr. Cooper:
This is in response to your letters dated September 30 and
October 24, 1996, on behalf of your client, Alps Automotive,
Incorporated (Alps), requesting a ruling with respect to the
country of origin marking requirements for certain remote keyless
entry transmitters (RKE) to be imported into the U.S.
FACTS:
The component materials that will be used to produce the
RKE's will be shipped to Mexico from various countries. You
state that the following components will be used to produce the
RKE transmitters:
key ring battery
tact switch resistors
printed circuit boards keypad
transistors switch seal
inductor housings
SAW resonator terminals
microprocessor contacts
capacitors
The components will be mounted on to the printed circuit
board. The keypad and the printed circuit board are then mounted
together and a battery is placed in the bottom housing. The top
and bottom housings, with the printed circuit board placed
between them, are snapped together. The product is then tested
for electronic function, heat sealed in a plastic bag, labeled,
and boxed for shipment to various facilities in the U.S. and
Canada. The individual transmitters will be in plastic bags
marked "Made in Mexico," "Assembled in Mexico" or "Mexico." and
will be shipped to various plants near Toronto, Philadelphia, New
York, Tampa, and Atlanta.
Two RKE transmitters and one receiver are programmed in the
U.S. or Canada by pushing a programming button through the bag
without breaking the seal. The transmitters are then taped to
their receiver which has been programmed specifically to receive
signals from that particular transmitter. The system is then
shipped to various assembly plants throughout the U.S. and Canada
where the receiver is securely mounted to an automobile and the
transmitters are placed in the glove box for shipment to the
dealer. The process of mounting the receiver to the automobile
involves the connection of the receiver to the electrical systems
of various functioning units including the locking system, the
radio system, the trunk system, the power window system, and
mirror functioning systems. The transmitter is still sealed in
the plastic labeled bag when shipped to the dealer. The dealer
may remove the bag as part of the preparation of the automobile
for sale to consumers.
You note that the programming process imparts each
transmitter with its unique transmitter identification code and
imparts that code into the receiver's memory so that only one
receiver (or its duplicate) will respond to the signal. This
process is performed for safety and security requirements and to
insure that there will be no duplication. Each transmitter will
only function with one specific vehicle which will be programmed
with the appropriate code in its receiver. You state that the
cost of the RKE's will represent much less than 1% of the total
value of the automobile.
You state that under Canadian law a certain frequency rating
or identification number must be provided on a product such as
the RKE transmitter. Since automobiles manufactured in the U.S.
and Canada may be sold interchangeably, Alps would like to have
both the Federal Communication Commission (FCC) and the Canadian
required-identification numbers on the transmitters. In the
photocopy you submitted with your request, the letters FCC ID and
CAN would precede the identification numbers assigned by the
respective U.S. and Canadian government agencies. In a
telephonic discussion with a member of my staff on December 4,
1996, you indicated that Alps does not intend to preface the
frequency rating with "CANADA" as you originally presented in
your initial correspondence.
ISSUE:
What are the country of origin marking requirements of the
imported transmitters described above?
LAW AND ANALYSIS:
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C.
1304), requires 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
manner as to indicate to the ultimate purchaser the English name
of the country of origin of the article. The regulations
implementing the requirements and exceptions to 19 U.S.C. 1304
are set forth in Part 134, Customs Regulations (19 CFR 134).
The country of origin marking requirements for goods of a
NAFTA country are determined in accordance with Annex 311 of the
North American Free Trade Agreement, as implemented under the
North American Free Trade Agreement Implementation Act ("NAFTA")
(Pub. L. 103-182, 107 Stat. 437 (December 8, 1993)). The rules
used for determining whether a good is a good of a NAFTA country
are contained in regulations set forth in 19 CFR Part 102. The
marking requirements for these goods are set forth in various
provisions of Part 134, Customs Regulations.
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 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) 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) 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) provides that a "good
of a NAFTA country" may be marked with the name of the country of
origin in English, French or Spanish.
In this case, the RKE transmitters are produced in Mexico
and imported into the U.S. or Canada so that the manufacturer may
equip automobiles with the remote keyless system in the U.S. or
Canadian production facility. Thus, in order to determine the
appropriate marking requirements for the imported RKE
transmitters when they are imported into the U.S. and after the
automobiles are equipped with these devices, we must first
determine their country of origin pursuant to the NAFTA Marking
Rules.
Part 102 of the regulations sets forth the "NAFTA Marking
Rules" hierarchy for purposes of determining whether a good is a
good of a NAFTA country for marking purposes. Section 102.11(a)
of the regulations provides that "[t]he 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 requirements of these
rules are satisfied."
While you do not provide the country of origin of each
component, you state that the components used to produce the RKE
transmitters are imported into Mexico where they are manufactured
into the transmitters. Accordingly, the completed RKE
transmitters are neither wholly "obtained or produced" (19 CFR
102.11(a)(1)) nor are they "produced exclusively from domestic
materials" (19 CFR 102.11(a)(2)) since the components are from
various countries and they are manufactured in Mexico.
Therefore, we must determine if section 102.11(a)(3) results in
an origin determination. Under this rule, 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 set out in section 102.20. "Foreign
material" is defined in section 102.1(e) of the regulations as "a
material whose country of origin as determined under these rules
is not the same country as the country in which the good is
produced." Section 102.20 of the rules sets forth the specific
tariff classification changes and/or other operations which are
specifically required in order for country of origin to be
determined on the basis of operations performed on the foreign
materials contained in a good.
The completed RKE transmitter is classified under subheading
8526.92, HTSUS (see Headquarters Ruling Letter (HRL) 953013,
dated April 15, 1993), the applicable change in tariff
classification set out in section 102.20(o), Section XVI,
Chapters 84 through 85, 8526.10-8526.92 of the regulations
provides:
8526.10 - 8526.92 .... A change to subheading 8526.10
through 8526.92
from any other subheading, including
another
subheading within that group.
In this case, since none of the components of the RKE are
classifiable individually in subheading 8526.92, HTSUS, the
country of origin of the RKE transmitter when it is imported into
the U.S. will be Mexico because all of the components of the RKE
will meet the applicable tariff shift rule cited above.
We note that section 134.35(b), Customs Regulations (19 CFR
134.35(b)), states 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. Unless
the good is processed by the importer or on its behalf,
the outermost container of the good shall be marked in
accord with this part.
In this case, we will look to whether the RKE transmitters are
processed in a manner that would result in the RKE transmitters
becoming a good of the U.S. pursuant to the NAFTA Marking Rules.
If the RKE transmitter that is imported into the U.S. becomes a
good of the U.S., the Mexican-origin RKE transmitter itself will
be excepted from marking, but the outermost container of the RKE
transmitter must be marked with Mexico as its country of origin
unless the imported good is processed by or on behalf of the
importer.
To determine the marking requirements of the RKE
transmitters that are installed in U.S.-built automobiles, we
apply the NAFTA Marking Rules hierarchy contained in 19 CFR
102.11 to the completed automobile into which the RKE system is
installed. In this case, the automobile in which the RKE system
is installed is neither "wholly obtained or produced," or
"produced exclusively from domestic (U.S.) materials."
Therefore, for purposes of determining the origin of the imported
good, section 102.11(a)(3) is the applicable rule that first must
be applied. Under this rule, 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 set
out in section 102.20. As noted, the RKE transmitters imported
from Mexico are classifiable under subheading 8526.92, HTSUS.
When the finished automobile, including the RKE system, is
manufactured, the finished automobile will be classified under
heading 8703, HTSUS. The applicable change in tariff
classification set out in section 102.20(p), Section XVII,
Chapters 86 through 89, 8701-8705 of the regulations provides:
8701 - 8705 .... A change to heading 8701 - 8705
from any other heading except
heading 8706.
In this case, the RKE transmitter will undergo the applicable
change in tariff classification in the U.S. Therefore, the RKE
transmitters that will be installed in the U.S. will become goods
of the U.S. and will not need to be separately marked as to
country of origin.
Similarly, to determine the marking requirements of the RKE
transmitters that are installed in Canadian-built automobiles, we
apply the NAFTA Marking Rules hierarchy contained in 19 CFR
102.11 to the completed automobile into which the RKE system is
installed. In this case, the automobile in which the RKE system
is installed is neither "wholly obtained or produced," or
"produced exclusively from domestic (Canadian) materials."
Therefore, for purposes of determining the origin of the imported
good, section 102.11(a)(3) is the applicable rule that first must
be applied. Under this rule, 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 set
out in section 102.20. As noted, the RKE transmitters imported
from Mexico are classifiable under subheading 8526.92, HTSUS.
When the finished automobile, including the RKE system, is
manufactured, the finished automobile will be classified under
heading 8703, HTSUS. The applicable change in tariff
classification set out in section 102.20(p), Section XVII,
Chapters 86 through 89, 8701-8705 of the regulations provides:
8701 - 8705 .... A change to heading 8701 - 8705
from any other heading except
heading 8706.
In this case, the RKE transmitters will undergo the applicable
change in tariff classification in Canada. Therefore, the RKE
transmitters that will be installed in Canada will become goods
of Canada and will not need to be separately identified as to the
country of origin provided the automobile is properly marked when
imported into the U.S.
In regard to the marking on the back of the RKE transmitter,
Customs does not find that the presence of the letters "CAN"
followed by a registration number amount to a foreign country or
locality reference that will trigger the special marking
requirements of 19 CFR 134.46. Customs has specifically ruled
that "CAN" is not an acceptable abbreviation for Canada for
country of origin marking purposes under 19 U.S.C. 1304 because
it does not unmistakably indicate Canada as the country of
origin. HRL 722566, dated September 14, 1983. Therefore, the
corrective language required under the regulation will not be
required.
HOLDING:
When the RKE transmitters are imported into the U.S. to be
installed in U.S.-produced automobiles, they become goods of the
U.S. pursuant to 19 CFR Part 102, and the transmitters are
excepted from marking pursuant to 19 CFR 134.35(b). RKE
transmitters that are installed in Canadian-manufactured
automobiles will become a good of Canada pursuant to 19 CFR Part
102 for purposes of country of origin marking and need not be
separately marked with their country of origin assuming that the
automobile is properly marked. We find that the letters "CAN" on
the back of the transmitter do not trigger the special marking
requirements of 19 CFR 134.46.
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 Appeals
Division