Mr. Gerardo L. Blanco
Blanco Customs Brokerage
420B Pan American Drive, Ste. #4
El Paso, TX 79907
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of LCD televisions from Mexico; Article 509
Dear Mr. Blanco:
In your letter dated May 19, 2009, on behalf of Pegatron USA Corporation, you requested a ruling on the classification and status of LCD televisions from Mexico under the NAFTA.
The subject merchandise is LCD color televisions, which will have screen diagonals ranging from 32 inches to 50 inches. These ready-to-use color LCD televisions do not incorporate any video recording or reproducing apparatus.
These LCD televisions, based on the submitted information, will be produced in Mexico from the following non-originating Chinese components: the sub-assembly of the front bezel module incorporating the bezel, the speakers with speaker cable, the arm bracket, the round washer, and the screws; the sub-assembly of the back cover module incorporating the back cover, the shield cover, the main board, the keypad board, the power supply with inverter cable, the IR cable, and the screws; the base unit, serving as the TV stand, with screws; the LCD panel with screws; various accessories, such as the power cord, remote control and battery; and several packing materials.
Moreover, it is noted that these sub-assemblies, consisting of the front bezel module and the back cover module (the IR cable with sensor and the LDVS cable being attached to the shield cover) with TV stand, will be imported into Mexico as one unit. When in Mexico, several components of this unit will be removed for the purpose of further assembly; and during this process, the merchandise will be further produced by assembling the LCD panel to the bezel. This merchandise, after the necessary testing, inspecting, cleaning and labeling, will be packaged with its accessories as a set for tariff classification purposes, with the essential character being imparted by the LCD television.
In regard to the NAFTA, the rules of origin provisions for this free trade agreement, has 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.
The country of origin determination is made pursuant to 19 C.F.R. 102.11, which states:
The country of origin of a good is the country in which:
The good is wholly obtained or produced;
The good is produced exclusively from domestic materials; or
Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in §102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
19 C.F.R. 102.20 specifies that classification under HTSUS provision 8528 allows for a change to subheading 8528.12 through 8528.30 from any other subheading, including another subheading within that group, except from subheading 8540.11 through 8540.12. This tariff shift has been met.
The country of origin of the LCD televisions is Mexico based upon meeting the tariff shift specified in C.F.R. 102.20.
The applicable tariff provision for these LCD televisions will be 8528.72.72, 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: Other: Other. 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/.
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 merchandise described above qualify for NAFTA preferential treatment, because it 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, these LCD color televisions 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