CLA-2-85:OT:RR:NC:N1:109
Mr. John M. Peterson
Neville Peterson LLP
Counsellors at Law
17 State Street, 19th Floor
New York, NY 10004
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of bridge rectifier diodes from Ireland
Dear Peterson:
In your letter dated February 15, 2011 you requested a tariff classification ruling and beneficial duty free treatment under NAFTA on behalf of your client, MicroSemi, Inc.
The merchandise at issue is bridge rectifier diodes. The bridge rectifier diodes are produced from diodes manufactured by MicroSemi in the United States. After being produced in the United States, the diodes are exported to Ireland where, at MicroSemi’s facility in County Claire, they will be inspected and subjected to processes such as electroplating and solder-dipping. Four of the individual diodes will be assembled, connected, and wired together into a bridge configuration so that electricity can flow through the diodes in a certain way as the current alternates and returned to the United States. The bridge rectifier diodes essentially transform alternating current voltage into direct current outputs, the function of a rectifier, which is more readily used for a variety of applications. Because this merchandise converts alternating current to direct current it is a rectifier of heading 8504. However, because it also contains diodes of heading 8541 we must look to Note 8 to Chapter 85, which states: "For the classification of articles defined in this note, headings 8541 and 8542 shall take precedence over any other heading in the Nomenclature, except for heading 8523, which might cover them by reference to, in particular, their function." Therefore, while the bridge rectifier diodes could be classified in heading 8504 by its function as a "rectifier", we do not classify it by its function in heading 8504, but rather in heading 8541 because Note 8 to Chapter 85 is controlling. As such, the bridge rectifier diodes are classified within heading 8541. Headquarters’ Ruling HQ 960323 also dealt with the classification of bridge rectifier diodes and determined that they were classified within subheading 8541, as well.
The applicable subheading for the bridge rectifier diodes will be 8541.10.00, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Diodes, other than photosensitive or light-emitting diodes.” The rate of duty will be free.
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/.
The bridge rectifier diodes were produced from originating goods (the United States) in Ireland. Ordinarily, the exportation of a NAFTA originating good to a non-NAFTA country, such as Ireland, would disqualify the good from NAFTA treatment under the NAFTA Article 411 Transshipment Rule. However, an exception for that rule is provided for certain microprocessors of HTS Heading 8541.10 through 8541.60. The NAFTA Annex 401 Rules of Origin contain the following provision:
“Notwithstanding subdivision (1) of this note (transshipment), a good provided for in subheadings 8541.10 through 8541.60 or 8542.31 through 8542.39 qualifying under the rule below as an originating good may undergo further production outside the territory of the parties and, when imported into the territory of a party, will originate in the territory of a party, provided that such further production did not result in a change to a subheading outside of that group.”
Rule 142. states:
“No required change in tariff classification to any of subheadings 8541.10 through 8542.90.”
Since the originating material qualifies under Rule 142., the fact that it underwent further production in Ireland, a country outside the territory of the NAFTA party countries, does not disqualify it as originating in the territory of the NAFTA party country (the United States) because the further production in Ireland did not result in a change to a subheading outside of subheadings 8541.10 through 8542.90. As such, in accordance with subdivision (r), (s), and (t) of General Note 12 (b) (i), [specifically GN 12 (b) (i) (t) Chapter 85, Chapter rule 5, 142.], the bridge rectifier diodes will be entitled to a free rate of duty under the NAFTA and does quality to enter the United States as an originating good under NAFTA upon compliance with all applicable laws, regulations, and agreements.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
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 Linda M. Hackett at (646) 733-3015.
You have asked for guidance on the specific Special Program Indicator Code to be used in making entry of the finished bridge rectifier diodes imported from Ireland, but not disqualified from NAFTA treatment under NAFTA Article 411 Transshipment rule and GN 12 (b) (i) (t) Chapter 85, Chapter rule 5, 142. Your question as to what Special Program Indicator Code is to be applied to the consumption entry on the Customs Form (CF) 7501 is a matter that is handled by the Entry Branch. Should you wish to obtain a ruling on the Special Program Indicator Code, you may address this matter to the Entry Branch, 799 9th Street NW, Washington, DC 20229-1177.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division