United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1991 HQ Rulings > HQ 0555716 - HQ 0555869 > HQ 0555846

Previous Ruling Next Ruling


HQ 555846


March 15, 1991

CLA-2 CO:R:C:S 555846 KCC

CATEGORY: CLASSIFICATION

TARIFF NO.: 8529.90.35

Mr. Gordon W. Larson
Rudolph Miles & Sons, Inc.
4950 Gateway East
P.O. Box 144
El Paso, Texas 79942

RE: GSP eligibility of a programmable remote control transmitter. Eligible article; 085335; 087108

Dear Mr. Larson:

This is in response to your letter dated December 28, 1990, on behalf of Philips Consumer Electronics Company (PCEC), concerning the eligibility of a programmable remote control transmitter assembled in Mexico for duty-free treatment under the Generalized System of Preferences (GSP) (19 U.S.C. 2461-2466). Samples of the printed circuit board assembly (PCBA) and the other components included in the finished programmable remote control transmitter were submitted for examination.

FACTS:

PCEC presently enters the "Smart One" programmable remote control transmitter (remote control device) into the U.S. under subheading 8537.10.0060, Harmonized Tariff Schedule of the United States (HTSUS) and claims a reduction in duty under subheading 9802.00.80, HTSUS. A PCEC subsidiary, Subensambles Electronicos, S.A. de C.V., assembles the remote control in Mexico. The foreign operations entail:

1. attaching printed circuit boards (PCBs) (a panel of 5 PCBs) to an automatic panel feeder;
2. feeding the panel through various machines: a) a solder paste machine applies solder to specific points on the PCBs through a squeegee and stencil arrangement; b) the first onserter machine attaches Quad Pak integrated circuits (ICs) to the PCBs; c) the second onserter machine attaches resistors, capacitors, diodes, and transistors (chip components) to the PCBs;
d) in the oven solder paste is "reflowed" to solder the ICs and chip components to the PCBs; e) the PCBs are inspected and tested; and f) the PCBs are broken apart from the panel; 3. manual attaching and soldering of the light emitting diodes, infra-red emitting diodes, crystal battery and wires to a PCB;
4. attaching a photo sensor, position switch and capacitor to the PCB (now known as the PCBA);
5. attaching the overlay, key-pad, and PCBA to the case top;
6. attaching the battery terminals to the case bottom; 7. screwing the case top and bottom together; 8. testing the remote control;
9. attaching the battery cover and label to the remote control; and
10. packaging the remote control.

Upon completion of the Mexican operations, the remote control is imported into the U.S.

ISSUE:

Whether the remote control transmitter is entitled to duty- free treatment under the GSP.

LAW AND ANALYSIS:

Under the GSP, eligible articles the growth, product or manufacture of a designated beneficiary developing country (BDC) which are imported directly into the customs territory of the U.S. from a BDC may receive duty-free treatment if the sum of 1) the cost or value of materials produced in the BDC, plus 2) the direct costs of the processing operation in the BDC, is equivalent to at least 35% of the appraised value of the article at the time of entry. See, 19 U.S.C. 2463(b).

If an article is produced or assembled from materials which are imported into the BDC, the cost or value of those materials may be counted toward the 35% value-content minimum only if they undergo a double substantial transformation in the BDC. See, section 10.177, Customs Regulations (19 CFR 10.177), and Azteca Milling Co. v. United States, 703 F. Supp. 949 (CIT 1988), aff'd, 890 F.2d 1150 (Fed. Cir. 1989). That is, the cost or value of the imported materials used to produce the PCBA may be included in the GSP 35% value-content computation only if they are first substantially transformed into a new and different article of commerce, which is itself substantially transformed into a remote control.

Mexico is a BDC. See, General Note 3(c)(ii)(A), HTSUS. You state that the remote control device is classified under subheading 8537.10.0060, HTSUS, which is a GSP eligible provision.

However, we have held that remote control devices of this type are properly classified under subheading 8529.90.35, HTSUS, which provides for "[p]arts suitable for use solely or principally with the apparatus of headings 8525 to 8528: [o]ther: [o]f television apparatus: [o]ther," which is not a GSP eligible provision. See, Headquarters Ruling Letter (HRL) 085355 dated January 4, 1990, and HRL 087108 dated August 29, 1990. Therefore, the remote control device will not be entitled to duty-free treatment under the GSP program.

HOLDING:

Based on our prior rulings, the remote control device is classified under subheading 8529.90.35, HTSUS, which is not a GSP eligible provision. Therefore, the remote control device is not entitled to the duty-free treatment under the GSP.

Sincerely,

John Durant, Director
Commercial Rulings Division

Previous Ruling Next Ruling

See also: