HQ 0087848 - Unassembled truck body panels; Parts and accessories of automobiles; Automotive Products Trade Act; APTA - United States International Trade Commision Rulings

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HQ 087848

December 14, 1990

CLA-2 CO:R:C:G 087848 MBR

CATEGORY: CLASSIFICATION

TARIFF NO.: 8708.29.00

Mr. Ralph A. Saunders
A.N. Deringer, Inc.
30 West Service Road
Champlain, New York
12919-9703

RE: Unassembled truck body panels; Parts and accessories of automobiles; Automotive Products Trade Act; APTA

Dear Mr. Saunders:

This is in reply to your letter of August 29, 1990, on behalf of Rene Fibre de Verre Ltee., Quebec, Canada, requesting classification of unassembled truck body panels, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).

FACTS:

Rene Fibre de Verre Ltee. (Rene), Canada, produces composite body panels for trucks: engine compartment hoods, cab rooftop wind deflectors, side shields (between cab and trailer), and external windshield sun visors. Presently, Rene manufactures these articles for Mack Trucks, Inc., (Mack), Allentown, PA. Mack is a bona fide motor-vehicle original equipment manufacturer (OEM). Rene now contemplates opening an assembly plant in the United States. In the future, Rene proposes shipment of these unassembled body panels to their new plant in the United States for completion and subsequent transport to Mack. You state that all of these articles are for OEM use and will not be diverted for over-the-counter sale.

ISSUE:

What is the classification of truck body panels under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA)? Are these unassembled truck body panels subject to duty free treatment under the Automotive Products Trade Act?

LAW AND ANALYSIS:

The General Rules of Interpretation (GRI's) to the HTSUSA govern the classification of goods in the tariff schedule. GRI 1 states, in pertinent part:

...classification shall be determined according to the terms of the headings and any relative section or chapter notes...

Heading 8704, HTSUSA, provides for: "[m]otor vehicles for the transport of goods." Clearly, trucks are motor vehicles for the transport of goods.

Heading 8708, HTSUSA, provides for: "[p]arts and accessories of the motor vehicles of headings 8701 to 8705." The Harmonized Commodity Description and Coding System Explanatory Notes (EN) to heading 8708, HTSUSA, state:

This heading covers parts and accessories of the motor vehicles of headings 8701 to 8705, provided the parts and accessories fulfill both the following conditions:

(i) They must be identifiable as being suitable for use solely or principally with the above-mentioned vehicles;
and (ii) They must not be excluded by the provisions of the Notes to Section XVII (see the corresponding General Explanatory Note).

Parts and accessories of this heading include:

(A) Assembled motor vehicle chassis-frames....and parts thereof (side-members, braces, cross members;...; supports and brackets for the coachwork, engine, running-boards,..., etc.).

(B) Parts of bodies and associated accessories, for example, floor boards, sides, front or rear panels...etc.;...bonnets; running-boards; wings, mudguards; dashboards; radiator cowlings;...;bumpers and over-riders;...; visors; ...; Assemblies (including unit construction chassis-bodies) not yet having the character of incomplete bodies, e.g., are classified in this heading and not in heading 8707."

The Explanatory Notes, although not dispositive, should be looked to for the proper interpretation of the HTSUSA. See 54 Fed. Reg. 35128 (August 23, 1989).

Clearly, the instant merchandise is identifiable as being suitable for use solely or principally with the above mentioned
vehicles and is properly classifiable as parts of bodies and associated accessories, not yet having the character of incomplete bodies.

The Automotive Products Trade Act of 1965 (APTA), General Note 3(c)(iii)(A), provides: "[m]otor vehicles and original motor-vehicle equipment which are Canadian articles and which fall in provisions for which the rate of duty "Free (B)" appears in the "Special" subcolumn may be entered free of duty. As used in this note--

(1) The term "Canadian Article" means an article which originates in Canada, as defined in subdivision (c)(vii) of this note.

(2) The term "original motor-vehicle equipment", as used with reference to a Canadian article (as defined above), means such a Canadian article which has been obtained from a supplier in Canada under or pursuant to a written order, contract or letter of intent of a bona fide motor vehicle manufacturer in the United States, and which is a fabricated component originating in Canada, as defined in subdivision (c)(vii) of this note, and intended for use as original equipment in the manufacture in the United States of a motor vehicle, but the term does not include trailers or articles to be used in their manufacture.

(3) The term "motor vehicle", as used in this note, means a motor vehicle of a kind described in headings 8702, 8703 and 8704 of chapter 87 (excluding an electric trolley bus and a three-wheeled vehicle) or an automobile truck tractor principally designed for the transport of persons or goods.

(4) The term "bona fide motor-vehicle manufacturer" means a person who, upon application to the Secretary of Commerce, is determined by the Secretary to have produced no fewer than 15 complete motor vehicles in the United States during the previous 12 months, and to have installed capacity in the United States to produce 10 or more complete motor vehicles per 40 hour week. The Secretary of Commerce shall maintain, and publish from time to time in the Federal Register, a list of the names and addresses of bona fide motor- vehicle manufacturers.

The term "fabricated component" is a term of limitation which embraces finished or unfinished components actually incorporated into a motor vehicle. The term does not, however, include materials. Although at the time of importation the component does not have to be in a condition completely ready for
assembly without further fabrication, it must at a minimum be so far processed as to be physically recognizable as a component in an unfinished state. (See Report of the Committee on Ways and Means, House of Representatives, to Accompany H.R. 9042). You state that the articles, in their imported state, are physically recognizable as components in an unfinished state.

You represent that the imported articles are "Canadian articles" as defined in subdivision (c)(vii). Further, you state that your Canadian articles are supplied pursuant to purchase orders of Mack (which you state is a bona fide motor vehicle manufacturer in the United States, as described in General Note 3(c)(iii)(A)(4)). You also state that these purchase orders are received at Rene in Canada. Lastly, you state that your imported Canadian articles will be used exclusively as original equipment in the manufacture of motor vehicles in the United States.

Therefore, it is Customs position, based upon your representations, that the instant articles provided for under heading 8708, HTSUSA, meet the requirements of the Automotive Products Trade Act. See HQ 080042, dated July 19, 1988 for a similar holding on analogous facts.

HOLDING:

The instant parts and accessories of trucks are classifiable in subheading 8708.29.00, HTSUSA, which provides for: "[p]arts and accessories of the motor vehicles of headings 8701 to 8705: [o]ther parts and accessories of bodies (including cabs):

Based on the submitted information, the instant merchandise will meet the requirements of the Automotive Products Trade Act and is therefore eligible for a Free rate of duty.

Sincerely,

John Durant, Director

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