Valerie R. Callister, Operations
UPS Supply Chain Solutions
PO Box 249
Eastport, ID 83826-0249
RE: The tariff classification and North American Free Trade Agreement (NAFTA) eligibility of disassembled alternator and starter cores from Canada
Dear Ms. Callister:
In your letter dated August 17, 2010, you requested a ruling on behalf of your client, Central Auto Parts Distributors LTD of Calgary, Alberta.
Central Auto Parts Distributors LTD operates a business selling rebuilt alternators and starters. They receive used alternator and starter cores, removed by disassembly, from individuals in Canada. The cores are exported to the U.S. where they are rebuilt and then exported back to Canada for commercial sale.
The applicable classification subheading for the Alternator Cores will be 8511.50.0000, HTSUS, which provides for “ … generators ( … alternators) … used in conjunction with [spark-ignition or compression-ignition internal combustion engines]: Other generators.” The rate of duty will be 2.5 %.
The applicable classification subheading for the Starter Cores will be 8511.40.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “ … starting equipment of a kind used for spark-ignition or compression-ignition internal combustion engines ( … starter motors) … : Starter motors … .” The rate of duty will be 2.5 %.
In your Ruling Request, you also request a determination as to the NAFTA eligibility of the Alternator and Starter Cores.
Section 181.132(a) [NORTH AMERICAN FREE TRADE AGREEMENT: Subpart L-Rules of Origin: Disassembly] of Title 19 of the Code of Federal Regulations [Customs Duties] states “ … disassembly is considered to be production … .”
In addition, General Note 12(b), HTSUS, which sets forth the criteria for determining whether a good is originating under the NAFTA, 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
Based on the facts provided, the Alternator and Starter Cores described above qualify for NAFTA preferential treatment because they will meet the requirements of HTSUS General Note 12(b) as having a country of origin of Canada. 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 Parts 177 and 181 of the Customs Regulations (19 C.F.R. 177, 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 contact National Import Specialist Richard Laman at 646-733-3017.
Robert B. Swierupski
National Commodity Specialist Division