CLA-2-85:OT:RR:NC:1:108
Mr. Steven B. Zisser
Zisser Customs Law Group
Suite 114
2297 Niels Bohr Court
San Diego, CA 92154
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of liquid crystal display (LCD) televisions with a light-emitting diode (LED) backlight from Mexico; Article 509
Dear Mr. Zisser:
In your letter dated November 24, 2010, you requested a ruling, on behalf of Delta Electronics Mexico, S.A. de C.V., on the status of LCD televisions with an LED backlight from Mexico under the NAFTA.
The subject merchandise, based on the submitted information, is LCD color televisions, with an LED backlight, of various screen sizes ranging from 15 inches to 65 inches. These televisions, which are manufactured in Mexico from non-originating Chinese components, have a built-in USB port that enables the user to retrieve, read, and reproduce video files stored on the USB storage device. In this regard, two scenarios are posed as to how this merchandise can be imported.
SCENARIO 1:
The merchandise consists of the LCD subassembly and the main board, which are imported separately into Mexico in different shipments at different times.
When imported into Mexico, the LCD subassembly consists of the LCD panel with an LED backlight. The LCD subassembly is also stated to be composed of the power board, the inverter board, the front bezel, the stand base, the speakers, the power board assembly, and the wire harnesses. The LCD subassembly, with an LED backlight, does not contain a tuner or a main board and cannot receive or process a broadcast television signal or any other type of signal.
The main board, when imported into Mexico, is stated to contain all the television control elements, including a television tuner and all audio and video components; furthermore, the main board, which does not have a power supply or a display screen, contains all of the components enumerated in Additional U.S. Note 9 to Chapter 85, HTSUS.
In Mexico the LCD subassembly, with LED backlight, is disassembled in such a manner to allow the main board to be incorporated into the LCD subassembly, with all the required operations being performed in assembling this merchandise. In this manner, the components are further manufactured to produce a functioning LCD television with an LED backlight.
SCENARIO 2:
The merchandise essentially consists of the following: the LCD panel unit with an LED backlight; the television chassis frame (incorporating the main board); the inverter board; and the power board, all of which are imported separately into Mexico in different shipments at different times.
The LCD panel unit, with LED backlight, is stated to consist of a rear glass plate with address electrodes, a dielectric layer with phosphor coating in the LCD cells, and a front glass plate.
The television chassis frame, which has a metal frame, is stated to contain a back and front cabinet; speaker and keypad cables; and a remote control IR circuit board assembly. The television chassis frame is also stated to incorporate a main board that contains an analog unit that amplifies and converts video and audio signals; converts analog signals to digital signals; converts digital signals into pixels used by the LCD panel unit with LED backlight; and controls audio volume, channel selection, power distribution, menu screens, light emitting diodes, and inverters. It is stated that the main board contains all the parts specified in Additional U.S. Note 9 to Chapter 85, HTSUS.
In Mexico the television chassis frame is disassembled in such a manner to allow the LCD panel unit (with LED backlight), the main board, the power board, and the inverter board, along with other components, to be properly assembled through various operations, such as cable connections and the screwing of components onto each other. Through this process, the components are further manufactured to produce a functioning LCD television with an LED backlight.
The applicable tariff provision for the LCD televisions with an LED backlight, under both scenarios, will be 8528.72.6400, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Monitors and projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus: Reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus: Other, color: With a flat panel screen: Incorporating video recording or reproducing apparatus: Other. The rate of duty will be 3.9 percent 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.
Based on the facts provided, the televisions described above, under both scenarios, qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(b)(ii)(A). Moreover, based on the information submitted, the non-originating components, under both scenarios, will undergo the appropriate change in tariff classification, as required by HTSUS General Note 12 (t)/85.91(H), which reads: “A change to other reception apparatus for television of subheading 8528.72 from incomplete or unfinished reception apparatus for television (including assemblies for reception apparatus consisting of all the parts specified in chapter rule 3 to chapter 85 plus a power supply), not incorporating a cathode-ray tube, flat panel screen or similar display, of subheading 8528.72 or any other heading.” These LCD color televisions, with an LED backlight, will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
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 Lisa Cariello at (646) 733-3014.
Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs and Border Protection, Regulations & Rulings, 799 9th Street N.W. - 7th floor, Washington, DC 20229-1177.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division