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 > 1992 HQ Rulings > HQ 0112146 - HQ 0450647 > HQ 0223600

Previous Ruling Next Ruling


HQ 223600


January 6, 1992

FOR-2-03-CO:R:C:E 223600 CB

CATEGORY: ENTRY

TARIFF NO.: 8424.81.10

M. Barry Levy, Esq.
Sharretts, Paley, Carter & Blauvelt
67 Broad Street
New York, New York 10004

RE: Contemplated Use of Foreign Trade Zone for Packaging Operation; classification of unassembled sprayers

Dear Mr. Levy:

This is in response to your letter of April 1, 1991, on behalf of your client, Hardi Midwest, wherein you requested a binding ruling regarding the tariff treatment of certain articles.

FACTS:

Hardi Midwest (Hardi) would import certain components of agricultural sprayers into the United States for admission into a foreign trade zone in nonprivileged foreign status. Hardi would also admit into the zone, under domestic status, other agricultural sprayer components which were manufactured in the United States. The imported components would then be grouped with the domestic components to make complete, unassembled agricultural sprayers. The unassembled sprayers would be entered for consumption into the United States under the provision for agricultural or horticultural sprayers in subheading 8424.81.1000, HTSUSA.

ISSUE:

What is the correct tariff treatment of the sprayers upon withdrawal from the zone?

LAW AND ANALYSIS:

The statute governing the creation and operation of foreign trade zones is the Foreign Trade Zones Act of 1934, as amended (48 Stat. 998; 19 U.S.C. 81a through 81u). Pursuant to the
provisions of section 3 of the Foreign Trade Zones Act, as amended (19 U.S.C. 81c), merchandise of every description may be brought into a zone without being subject to the Customs laws for the purposes set forth in the statute. Merchandise may "be brought into a zone and may be stored, sold, exhibited, broken up, repacked, assembled, distributed, sorted, graded, cleaned, mixed with foreign or domestic merchandise, or otherwise manipulated, or be manufactured...." 19 U.S.C. 81c (1982).

You state in your ruling request that the component parts are admitted into the zone in nonprivileged foreign statuts (NPF). Merchandise in NPF status is subject to tariff classification in accordance with its character, condition, and quantity as constructively transferred to Customs territory at the time the entry or entry/entry summary is filed with Customs. Section 146.65(a)(2), Customs Regulations. Therefore, when the unassembled sprayer is entered for consumption, it is classified as an entity and not based on the component parts.

Regarding the question of the correct classification of the sprayers, classification of merchandise under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is made in accordance with the General Rules of Interpretation (GRIs) 1 through 6. The systematic detail of the HTSUSA is such that virtually all goods are classified by application of GRI 1, that is, according to the terms of the headings of the tariff schedule and any relevant section or chapter notes. Then, if GRI 1 fails to classify the goods, and if the headings and legal notes do not otherwise require, the remaining GRI's may be applied, taken in order.

General Rule of Interpretation (GRI) 2(a), HTSUS, states in part that any reference in a heading to an article shall be taken to include a reference to that article entered unassembled or disassembled. Relevant Explanatory Notes (ENs) indicate that for purposes of this rule "articles presented unassembled or disassembled" means articles the components of which are to be assembled either by means of simple fixing devices (screws, nuts, bolts, etc.) or by riveting or welding, for example, provided only simple assembly operations are involved. Complete but unassembled agricultural sprayers eligible for classification in accordance with their condition as constructively transferred to the Customs territory from a foreign trade zone will be classified in subheading 8424.81.10, HTSUS, provided they are to be later assembled as indicated. Mr. Paley, of your firm, confirmed that no part of the article will be brought back into the zone for subsequent entries.

HOLDING:

The component parts of a sprayer entered into a foreign trade zone in nonprivileged foreign status are classifiable as an entity upon withdrawal for consumption from the zone. In the instant case, the complete but unassembled sprayers are classifiable in subheading 8424.81.10, HTSUS.

Sincerely,

John A. Durant, Director

Previous Ruling Next Ruling

See also: