CLA-2-85:OT:RR:NC:N1:108
Mr. Christopher Roberts
Allied Vision Technologies Canada Inc.
300-4621 Canada Way
Burnaby, BC V5G 4X8
Canada
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of television-type cameras from Canada; Article 509
Dear Mr. Roberts:
In your letter dated September 11, 2015, you requested a ruling on the tariff classification and status of television-type cameras from Canada under the NAFTA.
The merchandise under consideration is the Allied Vision Prosilica GC Series Cameras (in color or monochrome) with Gigabit Ethernet interface (GigE Vision™). These machine-vision cameras, which do not contain any inbuilt recording capability, capture images in real time and transmit them to a location outside the cameras for remote viewing and/or recording. These cameras are intended for use in various applications, such as in industrial inspection, surveillance, and robotics.
It is noted that most of the main components of these cameras, such as nearly all of the PCB assemblies, originate in Canada and the U.S., with a few originating in Germany; and other components such as the housing, the back plate, and various types of rings originating in Canada. Moreover, there are components such as different types of hardware which originate from Taiwan, Canada, and the U.S., as well as sensors (depending upon the model) from Japan. All of the cameras’ components of non-Canadian origin are imported into Canada in different shipments and at different times, as well as in different quantities, depending upon production needs.
The manufacturing steps that occur in Canada consist of the following: preparing the components such as the PCBA’s and the housing for assembling, as well as integrating the components by soldering the GC power PCBA to the GC back plate; attaching the GC interface PCBA and the GC control board into the GC Power PCBA; programming the firmware; modifying the analog PCBA; preparing the sensors; performing various tests (Trigger test, SYNC functionality test, and Current test); screwing the boards together; preparing the IR filter (for color CCD); placing the assembled boards into the housing; setting up the overnight burn-in; performing the CCD alignment test; ensuring image focus and acceptance; inspecting for irregularities; and cleaning and bagging.
The applicable subheading for the Prosilica GC Series Cameras will be 8525.80.30, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; … : Television cameras, digital cameras and video camera recorders: Television cameras: Other. The general rate of duty will be 2.1 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; 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 non-originating 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 information submitted, the non-originating components undergo the appropriate change in tariff classification as required by HTSUS General Note 12 (t)/85.78(B), which reads: “A change to other television cameras of subheading 8525.80 from any other good of subheading 8525.80 or any other subheading, except from gyrostabilized cameras of subheading 8525.80.” Thus, the goods described above qualify for NAFTA preferential treatment because they will 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.
The country of origin determination is made pursuant to Section 102.11, Customs Regulations (19 C.F.R. 102.11), which 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 and determining the rate of duty and staging category applicable to an originating good as set out in Annex 302.2. Paragraph (a) of this section provides that the country of origin of a good is the country in which (1) the good is wholly obtained or produced, or (2) the good is produced exclusively from domestic materials, or (3) each foreign material incorporated into that good undergoes an applicable change in tariff classification set out in Section 102.20 of the regulations.
Customs Regulations (19 C.F.R. 102.1(e)), defines “foreign material” 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.” Because the cameras are processed in Canada from various foreign materials as noted above, these cameras are neither wholly obtained or produced, nor produced exclusively from domestic materials. Accordingly, neither 19 C.F.R. 102.11(a)(1) nor 102.11(a)(2) may be used to determine the origin of the finished cameras, and analysis must continue to 19 C.F.R. 102.11(a)(3).
Pursuant to 19 C.F.R. 102.11(a)(3), the country of origin of a good is the country in which each foreign material incorporated in that good undergoes an applicable change in tariff classification as set forth in 19 C.F.R. 102.20, and satisfies any other applicable requirements of that section.
In this case, because the cameras are classified in subheading 8525.80, HTSUS, 19 C.F.R. 102.20 (o) specifies that classification under the provision 8525.80, HTSUS, requires “A change to subheading 8525.80 from any other subheading or from any other good of subheading 8525.80, except a change to video camera recorders from television cameras.”
Applying the NAFTA Marking Rules set forth in Part 102 of the regulations to the facts of this case, this office finds that the non-originating materials undergo the applicable shift in tariff classification. Accordingly, the country of origin of the Prosilica GC Series Cameras is Canada.
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 [email protected].
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division