MAR-2-05 RR:CTF:VS H005101 FP
Ms. Christine de Vera
Psion Teklogix, Inc.
2100 Meadowvale Blvd.
Mississauga, Ontario
L5N 7J9 Canada
RE: Marking; country of origin of vehicle-mounted computers;
19 CFR Part 102
Dear Ms. de Vera:
This is in response to your electronic communication on behalf of Psion Teklogix, Inc. (hereinafter "Psion"), in which you requested a country-of-origin ruling from our National Commodity Specialist Division.
Your request presented two distinct issues: (1) the country-of-origin for procurement purposes and (2) the country-of-origin for product marking purposes.
Since different legal analyses are necessary to determine the country-of-origin of the subject merchandise for duty, for marking and for procurement purposes, we have decided to address them in separate letters.
We issued an advisory ruling on December 29, 2006 pertaining exclusively to the country-of-origin for procurement purposes. This ruling, however, concerns the country-of-origin of certain vehicle-mounted computers for marking purposes.
FACTS:
Psion is a provider of rugged mobile computing solutions headquartered in Mississauga, Ontario, Canada.
The merchandise under consideration is the Psion Teklogix 8570 Vehicle-Mount Computer made in Sweden that Psion ships from Canada into the U.S. under the North American Free Trade Agreement ("NAFTA"). The 8570 is a vehicle-mounted computer measuring approximately 12 inches wide by 9.4 inches high by 2.4 inches deep and weighing approximately 7.7 pounds housed within a 2-piece precision milled powder coated aluminum enclosure. This computer is designed for mounting onto a vehicle for use in rugged field applications, meeting or exceeding NATO Military Specifications and is primarily targeted towards an inventory control or warehousing environment.
Based on the information provided, the operations performed in Canada consists of the following steps:
Install gasket seal
Apply lubricant into port connectors
Wipe off excess
Install software
Install cable
Fasten cover using screws
Insert radio into indicated slot
Apply gasket to radio cap and install radio cap with screws
Clean surface
Apply label with label roller
Load and configure customer specific software into terminal
Testing
Quality control is performed
Photographs of some of the steps were provided.
In a previous ruling, New York Ruling Letter K85186 dated
April 30, 2004, the applicable tariff provision for the vehicle-mount computer was determined to be 8471.41.0095, Harmonized Tariff Schedule of the United States. In NY Ruling Letter
R03125 dated February 2, 2006, we found the vehicle-mount computer made in Sweden shipped from Canada to be NAFTA originating pursuant to NAFTA Annex 308.1. Consequently, the general rate of duty was determined to be free.
ISSUE:
What is the country of origin for marking purposes?
LAW AND ANALYSIS:
The Tariff Act of 1930 (19 U.S.C. 1304), as amended, provides that unless excepted, every article of foreign origin 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 of 19 U.S.C. 1304.
For a good of a NAFTA country, the NAFTA Marking Rules in Part 102, Customs Regulations (19 CFR § 102 et seq.), will determine the country of origin.
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 the purposes of country-of-origin marking. Paragraph (a) of 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.
"Foreign material" is defined in 19 CFR 102.1(e) 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."
Sections 102.11(a)(1) and 102.11(a)(2) do not apply to the facts presented in this case because the subject merchandise is neither wholly obtained or produced, nor produced exclusively from domestic materials. Since an analysis of sections 102.11(a)(1) and 102.11(a)(2) will not yield a country of origin determination, we look to section 102.11(a)(3).
Section 102.11(a)(3) provides that the country of origin 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...."
The applicable tariff shift rule found in section 102.20(f) provides as follows:
HTSUS Tariff Shift and/or other requirements
8470.10-8471.50 A change to subheading 8470.10 through 8471.50 from any other subheading outside that group, except from heading 8473; or
A change to subheading 8470.10 through 8471.50 from any other subheading within that group or from heading 8473, provided that the change is not the result of a simple assembly.
In the instant case, the subject merchandise fails to undergo the tariff shift required by section 102.11(a)(3). Section 102.11(b) provides that the country of origin is the country of origin of the single material that imparts the essential character of the good, which is Sweden.
The NAFTA preference override in section 102.19(a), however, allows a good otherwise originating within the meaning of General Note 12 but that is not determined under § 102.11(a) or (b) to be a good of a NAFTA country, to be marked as a product of the last NAFTA country in which that good underwent production other than minor processing.
Minor processing is defined in 19 CFR 102.1 (m) as:
(1) Mere dilution with water or another substance that does not materially alter the characteristics of the good;
(2) Cleaning, including removal of rust, grease, paint, or other coatings;
(3) Application of preservative or decorative coatings, including lubricants, protective encapsulation, preservative or decorative paint, or metallic coatings;
(4) Trimming, filing or cutting off small amounts of excess materials;
(5) Unloading, reloading or any other operation necessary to maintain the good in good condition;
(6) Putting up in measured doses, packing, repacking, packaging, repackaging;
(7) Testing, marking, sorting, or grading;
(8) Ornamental or finishing operations incidental to textile good production designed to enhance the marketing appeal or the ease of care of the product, such as dyeing and printing, embroidery an appliques, pleating hemstitching, stone or acid washing, permanent pressing, or the attachment of accessories notions, finding and trimmings; or
(9) Repairs and alterations, washing, laundering or sterilizing.
The subject merchandise, in our view, has undergone production beyond minor processing in Canada and, as such, the country-of-origin, for marking purposes only, is Canada.
HOLDING:
On the basis of the information provided, we find that the country of origin of the vehicle-mounted computers, for marking purposes only, is Canada.
However, we must stress that the treatment afforded to the subject computers under the NAFTA provisions described above for duty and marking purposes does not affect the country-of-origin for U.S. procurement purposes, which is Sweden.
We encourage you to write us again should you need further guidance.
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs official handling the transaction.
Sincerely,
Monika R. Brenner, Chief
Valuation and Special Programs Branch