CLA-2-85:OT:RR:NC:N4:120
Alex Rivera
Arias Logistics, Inc.
543 S. Americas Ave Ste A1
El Paso, Texas 79907
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of a control module from Mexico
Dear Mr. Rivera:
In your letter dated February 15, 2017 you requested the status under the NAFTA of the Automatic Transfer Switch Load Shed Control Module on behalf of your client, Epic Technologies, LLC Interactive, Inc.
The subject merchandise is referred to as the Automatic Transfer Switch Load Shed Control Module, which we will hereafter refer to as the “control module.” The control module is said to be a component of an automatic transfer switch that you state is manufactured in Mexico from discreet components. The manufacturing process includes soldering relays, fuse connectors, terminal blocks, capacitors, resistors, and other components onto a bare printed circuit board which is enclosed by a plastic cover.
In order for us to provide you with the status of the control module under the NAFTA, we must first determine the correct classification under the Harmonized Tariff Schedule of the United States (HTSUS). Your request suggests the subject control module is properly classified under subheading 8538.90.3000, HTSUS, which provides for “Parts suitable for use solely or principally with the apparatus of heading 8535, 8536 or 8537: Other: Printed circuit assemblies.”
As the control module consists of a base equipped with two or more apparatus of 8536 and is used to control or distribute electricity, we disagree with the suggested classification.
The applicable subheading for the subject control module will be 8537.10.9170, HTSUS, which provides for “Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of 8535 or 8536, for electric control or the distribution of electricity…: For a voltage not exceeding 1,000 V: Other: Other: Other.” The rate of duty will be 2.7 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 https://hts.usitc.gov/current/.
Turning to your request for NAFTA status, 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:
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 duty 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.
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 Karl Moosbrugger at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division