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HQ 087897


December 5, 1990

CLA-2 CO:R:C:G 087897 JMH

CATEGORY: CLASSIFICATION

TARIFF NO.:

Assistant District Director
Commercial Operations Division
U.S. Customs Service
Patrick V. McNamara Building, Suite 200
477 Michigan Ave
Detroit, MI 48266

RE: Internal Advice 61/90, automobile window guides, goods originating in the territory of Canada under the Automobile Products Trade Act ("APTA") and the United States-Canada Free Trade Agreement ("CFTA"); General Note 3(c)(iii), General Note 3(c)(vii); New York Ruling 824832

Dear Sir:

This is in response to your request for Internal Advice, IA No. 61/90 concerning certain automobile window guides and their status under the Automobile Products Trade Act ("APTA").

FACTS:

The articles in question are plastic automobile window guides. The guides are manufactured in the United States and then sent to Canada where they are painted. The guides are imported into the United States in their painted condition.

These plastic automobile window guides were the subject of New York Ruling 824832 ("NY 824832"), a ruling issued under the Tariff Schedules of the United States ("TSUS"). NY 824832 considered whether the window guides were entitled to duty free entry under APTA. One of the requirements under the TSUS for goods to receive APTA duty treatment was that the goods must be "Canadian articles." It was determined in NY 824832 that the window guides did not meet the definition of "Canadian articles", and thus, the guides did not receive APTA treatment.

Under the present Harmonized Tariff Schedule of the United States Annotated ("HTSUSA"), a new definition for the term "Canadian article" has been adopted. When the United States- Canada Free-Trade Agreement ("CFTA") was implemented, APTA was
altered to utilize the definition of a "Canadian article" provided for within the CFTA. The importer believes that under the new definition of "Canadian article" the window guides are now entitled to duty free entry under APTA.

ISSUE:

Are the plastic automobile window guides, the subject of NY 824832, entitled to duty free status under APTA due to the new definition of the term "Canadian article?"

LAW AND ANALYSIS:

The requirements that an automotive component must meet to be allowed entry under APTA are set out in General Note 3(c)(iii), HTSUSA. The first requirement is that the automotive component must be a "Canadian article", and such an article "originates in Canada, as defined in subdivision (c)(vii) of this note."

General Note 3(c)(vii) are the HTSUSA provisions for the CFTA. Under the CFTA, "goods imported into the customs territory of the United States are eligible for treatment as 'goods originating in the territory of Canada' only if--

(1) they are goods wholly obtained or produced in the territory of Canada and/or the United States, or

(2) they have been transformed in the territory of Canada and/or the United States, so as to be subject--

(I) to a change in tariff classification as described in the rules of subdivision (c)(vii)(R) of this note, or

(II) to such other requirements subdivision (c)(vii)(R) of this note may provide when no change in tariff classification occurs, and they meet the other conditions set out in subdivisions (c)(vii)(F),

See General Note 3(c)(vii)(B), HTSUSA.

The importer believes that the automobile window guides in question meet the requirement of part (1), that they are "goods wholly obtained or produced in the territory of Canada and/or the United States." General Note 3(c)(vii)(L), HTSUSA, defines the term "goods wholly obtained or produced..." This definition includes in relevant part mineral goods extracted in the United

States or Canada, goods harvested in the United States or Canada, and goods produced in the United States and/or Canada that are made exclusively from such extracted minerals or harvested goods.

In order for the window guides to be "wholly obtained or produced" every ingredient in the plastic and the paint must be made exclusively from such extracted minerals or harvested goods in the United States and/or Canada. We do not have sufficient facts or evidence to make this determination.

The second method by which the automobile guides may be originating goods under the CFTA is to undergo an authorized transformation under subdivision (R) of the note. It is the foreign component which must be transformed. Since it has not been stated otherwise, this office assumes that the paint is considered a foreign component. Since the plastic automobile guide is an originating good under the CFTA upon entry into Canada, it is the paint which must be transformed.

Paint is classified in Chapter 32, HTSUSA. Automobile window guides are classified in Chapter 87, HTSUSA, as parts of motor vehicles. Once the paint is placed on the window guides, the paint becomes a component of the window guides and loses its own classification. General Note 3(c)(vii)(R)(17)(aa) states that a change from one chapter to another is an authorized transformation. Since the paint changes classification from Chapter 32 to Chapter 87, it is an authorized transformation under General Note 3(c)(vii)(R).

The plastic automobile window guides meet the transformation requirements under General Note 3(c)(vii)(B)(2)(I). The window guides are "goods originating in the territory of Canada" under General Note 3(c)(vii). As goods which originate in Canada, they meet the requirements of General Note 3(c)(iii), the APTA provision. Therefore, the automobile window guides are "Canadian articles" for APTA purposes and are eligible for APTA treatment.

HOLDING:

Under General Note 3(c)(vii)(B)(2)(I), foreign components must be transformed in accordance with General Note 3(c)(vii)(R) to be considered "goods originating in the territory of Canada." The American plastic automobile window guides, the subject of NY 824832, are painted in Canada with what may be non-originating paint. The paint is transformed from classification within Chapter 32 to classification in Chapter 87 with the automobile window guides. This transformation is an authorized transformation under General Note 3(c)(vii)(R)(17)(aa). The painted automobile window guides are "goods originating in the
territory of Canada" for purposes of General Note 3(c)(vii). As goods which originate in Canada, they meet the requirements of General Note 3(c)(iii), the APTA provision. Therefore, the automobile window guides are "Canadian articles" for APTA purposes and are eligible for the APTA duty rates.

Sincerely,

John Durant, Director
Commercial Rulings Division

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