Mr. Stuart P. Seidel
Baker & McKenzie LLP
815 Connecticut Ave NW
Washington, DC 20006-4078
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of a non-screened television reception apparatus from Mexico; Article 509.
Dear Mr. Seidel:
In your letter dated September 22, 2008, on behalf of Nagra Trading, S.A., you requested a tariff classification ruling and a ruling on the status of a non-screened television reception apparatus from Mexico under the NAFTA.
The merchandise under consideration is the MDNL-7454 set top box, which does not have a communication function. The MDNL-7454 is a non-screened television reception apparatus that is composed of the following Chinese components: CPU/decoder PCBA, tuner assembly, smart card reader assembly, steel chassis, metal shield, cable assemblies, plastic bottom cover, plastic top cover, plastic front panel, and various screws. It also has originating product labels. It is stated that all of these components will be assembled in Mexico to produce the subject non-screened television reception apparatus.
It is noted that this apparatus contains a tuner, but does not have the capability to directly connect to the Internet. This apparatus receives television signals and converts them to analog television and video signals for reception by an analog television receiver; it also receives and decodes encrypted digital channels through subscription-only programming and transmits analog television signals to a subscriber’s television. In addition, it is stated that this apparatus does not incorporate any video recording or reproducing apparatus.
The applicable subheading for the MDNL-7454 non-screened television reception apparatus will be 8528.71.4000, 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: Not designed to incorporate a video display or screen: Other: Other: Color. The general rate of duty will be 5 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/.
In regard to the NAFTA, the rules of origin provisions for United States free trade agreements, other than those for the United States-Australia Free Trade Agreement, the United States-Singapore Free Trade Agreement and the United States-Chile Free Trade Agreement, have not been updated to reflect changes to the tariff schedule resulting from Presidential Proclamation 8097, which modified the HTS to reflect World Customs Organization changes to the Harmonized Commodity Description and Coding System. You will therefore see tariff heading/subheading numbers in the pertinent general notes which do not correspond to numbers in chapters 1 through 97 or to other portions of the same general notes.Accordingly, because the NAFTA rules of origin have not been updated to reflect the 2007 changes to the Harmonized System, the pre-2007 classifications for the goods at issue must be used in order to ascertain their correct rule of origin under NAFTA.
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
Based on the facts provided, the goods described above 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 will undergo the appropriate change in tariff classification, as required by General Note 12 (t)/85.92, which reads: “A change to subheading 8528.12 from tariff items 8528.12.04 or 8528.12.08 or any other heading.”
Thus, the MDNL-7454 set top box without a communication function will 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.
Robert B. Swierupski
National Commodity Specialist Division