CLA-2-84:OT:RR:NC:N1:106
Mr. Douglas Beebe
Affiliated Customs Brokers USA, Inc.
193 West Service Rd.
Champlain, NY 12919
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of rebuilt engines from Canada; Article 509
Dear Mr. Beebe:
In your letter dated January 14, 2009 you requested a ruling on the status of rebuilt engines from Canada under the NAFTA on behalf of your client, Japan Auto Parts.
According to your submission and the associated documents, spark-ignition, internal combustion engines, of 2,000 cc and 3,000 cc which were produced in the US or Canada are sourced by Japan Auto Parts as failed engines or engine cores. The engines are disassembled in Canada, cleaned and checked for cracks and resurfaced as necessary. New pistons, piston rings, bearings, valves, gaskets, seals and frost (freeze) plugs are installed during assembly.
The applicable tariff provision for the 2,000 cc engine will be 8407.34.1400, Harmonized Tariff Schedule of the United States (HTSUS), which provides for spark-ignition reciprocating or rotary internal combustion piston engines: reciprocating piston engines of a kind used for the propulsion of vehicles of chapter 87: of a cylinder capacity exceeding 1,000 cc: of a cylinder capacity not exceeding 2,000 cc: to be installed in vehicles of subheading 8701.20 or heading 8702, 8703 or 8704: used or rebuilt. The general rate of duty will be 2.5% ad valorem. The applicable tariff provision for the 3,000 cc engine will be 8407.34.4400, HTSUS, which provides for spark-ignition reciprocating or rotary internal combustion piston engines: reciprocating piston engines of a kind used for the propulsion of vehicles of chapter 87: of a cylinder capacity exceeding 1,000 cc: of a cylinder capacity exceeding 2,000 cc: to be installed in vehicles of subheading 8701.20 or heading 8702, 8703 or 8704: used or rebuilt. The general rate of duty will be 2.5% ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. General Note 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that
For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as “goods originating in the territory of a NAFTA party” only if--
(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or
(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that--
(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein, or
(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or
(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or
(iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the nonoriginating materials falling under provisions for “parts” and used in the production of such goods does not undergo a change in tariff classification because--
(A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or
(B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts,
provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note.
Based on the facts provided, the goods described above qualify for NAFTA preferential treatment, as long as the Regional Value Requirements are met. The engines meet the requirements of HTSUS General Note 12(b)(ii)(A). The goods will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements including Regional Value Content requirements specified in General Note 12(t).
This ruling letter has not addressed the Regional Value Content (RVC) of the subject goods. If you desire a ruling regarding the RVC of your goods and their eligibility for NAFTA preferential treatment, provide the information noted in Section 181.93(b) of the Customs Regulations (19 CFR 181.93(b)), to U.S. Customs and Border Protection, Office of International Trade, Regulations and Rulings Mint Annex, 799 9th Street N.W., Washington, D.C. 20001-4501, along with a copy of this letter.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Mark Palasek at (646) 733-3013.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division