CLA-2-85:OT:RR:E:NC:N1:101
Ratnam Philip, Director of Global Trade
REMY, Inc.
600 Corporation Drive
Pendleton, IN 46064-8608
RE: The tariff classification and NAFTA country of origin of starters and alternators from the U.S. and Canada
Dear Mr. Philip,
In your letter dated February 27, 2009, you requested a tariff classification, country of origin and marking ruling.
The items under consideration are non-operative, Alternators and Starters, known as "cores", received from individuals or automotive repair facilities. The cores are recovered from vehicles by disassembly and are, in your words, “unusable articles [that] cannot be sold to a consumer in [their] condition.
You state in your ruling request that the cores are extracted from vehicles in the U.S. and Canada, are shipped to Texas for consolidation and then shipped to your facility in Mexico. In Mexico, the cores are sorted (put into their family groups) and then shipped to various remanufacturing plants; some of which are in the U.S.
Title 19 of the Code of Federal Regulations [Customs Duties], Part 181 [NORTH AMERICAN FREE TRADE AGREEMENT], Section 181.132(a) [Disassembly] states “ … disassembly is considered to be production, and a component recovered from a good disassembled in the territory of a Party will be considered to be originating … .” Based on 19 CFR 181.132, the Alternators and Starters that have been disassembled from U.S. vehicles will have a country of origin of the United States prior to consolidation in Texas and the Alternators and Starters disassembled from Canadian vehicles will have a country of origin of Canada prior to consolidation in Texas.
Per Title 19 of the Code of Federal Regulations [Customs Duties], Part 102 [RULES OF ORIGIN], Subpart B [Rules of Origin], Section 102.12(b) [Fungible goods] states “If the good is fungible, has been commingled, and direct physical identification of the origin of the commingled good is not practical, the country or countries of origin may be determined on the basis of an inventory management method provided under the appendix to part 181 of the Customs Regulations.”
Title 19 of the Code of Federal Regulations [Customs Duties], Part 181 [NORTH AMERICAN FREE TRADE AGREEMENT], APPENDIX TO PART 181-RULES OF ORIGIN REGULATIONS, SECTION 1. CITATION, PART IV, SECTION 7. MATERIALS, FUNGIBLE MATERIALS; FUNGIBLE COMMINGLED GOODS; INVENTORY MANAGEMENT METHODS FOR DETERMINING WHETHER ORIGINATING (16) (b) states “ … the determination of whether the good is an originating good may be made on the basis of any of the inventory management methods set out in Schedule X.”
Based on 19 CFR 102.12(b) and 19 CFR 181, APPENDIX TO PART 181, SECTION 1., PART IV, SECTION 7.(16)(b), upon consolidation in Texas, the Alternators and Starters will have a country of origin as determined by the inventory management method utilized by you from the choices given in Schedule X of the APPENDIX TO PART 181 of Title 19 of the Code of Federal Regulations. This same method of determining the country of origin of the Alternators and Starters will apply when the Alternators and Starters are exported back into the U.S. from Mexico.
Schedule X of the APPENDIX TO PART 181 of Title 19 of the Code of Federal Regulations is accessible from the following Web address - http://www.gpoaccess.gov/cfr/index.html.
The applicable primary classification subheading for the Alternators when imported into the U.S. from Mexico, if the U.S. is determined to be their country of origin, will be 9801.00.1055, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Products of the United States when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad” with a secondary subheading of 8511.50.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Electrical ignition or starting equipment of a kind used for spark-ignition or compression-ignition internal combustion engines … ; generators ( … alternators) … : Other generators.” The rate of duty will be Free.
The applicable classification subheading for the Alternators when imported into the U.S. from Mexico, if Canada is determined to be their country of origin, will be 8511.50.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Electrical ignition or starting equipment of a kind used for spark-ignition or compression-ignition internal combustion engines … ; generators ( … alternators) … : Other generators.” The rate of duty will be 2.5%.
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 … .”
Based on the facts provided, the Alternators, if Canada is determined to be their country of origin, qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(b)(i). The goods will therefore be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
The applicable primary classification subheading for the Starters when imported into the U.S. from Mexico, if the U.S. is determined to be their country of origin, will be 9801.00.1055, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Products of the United States when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad” with a secondary subheading of 8511.40.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Electrical ignition or starting equipment of a kind used for spark-ignition or compression-ignition internal combustion engines ( … starter motors) … : Starter motors … .” The rate of duty will be Free.
The applicable classification subheading for the Starters when imported into the U.S. from Mexico, if Canada is determined to be their country of origin, will be 8511.40.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Electrical ignition or starting equipment of a kind used for spark-ignition or compression-ignition internal combustion engines … ; generators ( … alternators) … : Other generators.” The rate of duty will be 2.5%.
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 … .”
Based on the facts provided, the Starters, if Canada is determined to be their country of origin, qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(b)(i). The goods will therefore be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
In your request, you mention that completion of some Customs entry documents would “place an onerous burden on the shipper and importer.” Title 19 of the Code of Federal Regulations [Customs Duties], Part 10 [ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE, ETC.], Subpart A-General Provisions, Section 10.1(d) [Domestic products; requirements on entry] states “If the port director is reasonably satisfied, because of the nature of the articles or production of other evidence, that the articles are imported in circumstances meeting the requirements … , he may waive the requirements for producing … documents … .”
Further, Title 19 of the Code of Federal Regulations, PART 181 [NORTH AMERICAN FREE TRADE AGREEMENT], Subpart C [Import Requirements], Section 181.22(d)(i) [Maintenance of records and submission of Certificate by importer] states “ … an importer shall not be required to have a Certificate of Origin in his possession for an importation of a good for which the port director has in writing waived the requirement for a Certificate of Origin because the port director is otherwise satisfied that the good qualifies for preferential tariff treatment under the NAFTA.”
In addition to your requests for classification and country of origin, you requested a ruling on applicable marking requirements. We need additional information before we can make an appropriate determination:
1) What type of containers will the articles be shipped in (crates, shipping containers, packages, cardboard boxes, etc.) ?
2) How large or small will the shipments be (how many articles in the shipments) ?
3) Do you sell the Alternators and Starters to the “remanufacturing plants” or are they part of your company/organization ?
If you decide to resubmit your request, please include all of the material previously submitted and mail your request to U.S. Customs and Border Protection, Customs Information Exchange, Attn: Binding Rulings, 10th Floor, One Penn Plaza, New York, NY 10119-1199.
If your request was submitted electronically and the information required does not involve sending a sample, you can re-submit your request, all the previously submitted information and the additional information electronically.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in 19 CFR 177.9(b)(1) and 181.100(a)(2). This section states that a ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated therein, either directly, by reference, or by implication, is accurate and complete in every material respect.
This ruling is being issued under the assumption that the subject goods, in their condition as imported into the United States, conform to the facts and the description as set forth both in the ruling request and in this ruling. You should also be aware that the material facts described in the foregoing ruling may be subject to periodic verification by Customs.
Duty rates are provided for your convenience and are subject to change. The text of the most recent Harmonized Tariff Schedule of the United States and the accompanying duty rates are provided on the World Wide Web at http://ww.usitc.gov /tata/hts/.
This ruling is being issued under the provisions of Parts 177 and 181 of the Customs Regulations (19 C.F.R. 177, 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 Richard Laman at 646-733-3017.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division