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HQ 089080


June 5, 1992

CLA-2 CO:R:C:T 089080 HP

CATEGORY: CLASSIFICATION

TARIFF NO.: 3923.21.0050; 3926.30.5000; 4415.20.8000; 5401.10.0000; 5515.19.0090; 5807.10.1090; 5608.19.2090; 6002.43.0010; 7318.15.80;
8302.30.3000; 9801.00.1099

District Director
U.S. Customs Service
111 West Huron Street
Buffalo, NY 14202

RE: Further Review of Protest Number 0901-0-000399

Dear Sir or Madam:

This is in reply to your Memorandum of June 27, 1990, forwarding Application for Further Review of Protest Number 0901- 0-000399. Please reference PRO-2-06:COD:LM.

FACTS:

The merchandise at issue consists of various items described by protestant's counsel, Dorsey & Whitney, as follows:

[Importer's] facilities manufacture automobile map pockets and cargo restraint net assemblies (Assemblies) for installation as original motor vehicle equipment in automobiles assembled in the United States by bona-fide motor-vehicle manufacturers. The components of the Assemblies are: (1) man- made fiber netting, which can be either (a) raschel or (b) knotted; (2) webbing, which is woven from polyester and sewn on the lengthwise borders of the netting; (3) polypropylene and neoprene bungee border cords (bungee), which are inserted through the webbing, and have a loop sewn on each end; (4) thread, which is used to sew the webbing onto the netting; (5) plastic and metal hardware, which is used to connect the Assemblies to the automobiles by fitting in the loops of the bungee; and (6) patent- pending and warning labels which are sewn on the Assemblies.

Assemblies are installed in the United
States by [domestic automobile manufacturers] in the trunks of their new passenger vehicles.

The Assemblies are used to prevent luggage or other articles from moving around in the motor vehicles. The Assemblies are manufactured to the precise size and shape required for the specific location in the particular automobiles in which they will be installed.

U.S. motor-vehicle manufacturers order
Assemblies from [Importer] for installation in new automobiles. in the past, all the
Assemblies were assembled in Canada and supplied directly to the motor-vehicle manufacturer or its original equipment manufacturer for installation in the component parts of new automobiles.
Beginning in 1989, however, [Importer's U.S.] facility was open to provide an additional assembly facility for the Assemblies. The U.S. motor-vehicle manufacturers continue to place their orders with [Importer's Canada facility], and that facility decides whether to fill the order with Assemblies from
[Canada] or [the U.S.]. In either case, the Assemblies are made to order specifically for the model of automobile in which they will be installed. If the Assemblies are assembled at [the U.S. facility], the components are shipped there from [Canada]. The merchandise that is the subject of this protest consists of component parts of the Assemblies shipped to [the U.S. facility] from [Canada] to be used as original motor-vehicle equipment in new automobiles pursuant to contracts between [the Canada facility] and bona-fide motor- vehicle manufacturers in the United States.

The netting is produced ... from nylon yarn loaded into a bobbin. The machines used ... make nets of a certain number of loops and the exact width for a particular car or truck. The appropriate quantities of netting, webbing, and bungee to make the desired number of Assemblies for a particular automobile are shipped to [the U.S.], with the appropriate amount of thread, labels, and hardware for the [A]ssemblies.

At [the U.S. facility], the nets, webbing, and bungee are cut to the appropriate length for the new Assemblies for particular automobiles. The webbing is sewn onto the net, the bungee is inserted through the webbing, and the labels are sewn on. The finished Assemblies are then shipped to the U.S. motor-vehicle manufacturers for installation as original equipment in new automobiles.

With the exception of the bungee, which was produced in the United States, all of the components of the Assemblies were produced in Canada. A Shipper's Declaration of Canadian Origin was filed with the entries.

We assume the "hardware" referenced above is identical to that hardware subject to Protest 3801-0-003519, HRL 951390 of April 8, 1992.

Importer attempted to enter the merchandise as follows:

Poly bags under subheading 3923.21.00, HTSUSA, at Canadian Free Trade Agreement reduced rate of 2.7% ad valorem. Customs agreed with the classification, but denied reduced duty (3%) because importer failed to provide an Exporter's Certificate of Origin.

Pallets under subheading 4415.20.80, HTSUSA, at Canadian Free Trade Agreement reduced rate of 14.4% ad valorem. Customs agreed with the classification, but denied reduced duty (16.67%) because importer failed to provide an Exporter's Certificate of Origin.

All other items under subheading 8708.29.0050, HTSUSA, as automobile parts subject to duty-free treatment under the Automobile Products Trade Act of 1965 (APTA). See General Note 3(c)(iii) to the HTSUSA. Customs disagreed, classifying all but the raschel netting in various subheadings throughout the HTSUSA, denying duty-free treatment under the APTA, and denying reduced duty under the CFTA.

ISSUE:

Whether the items are considered fabricated components under the APTA? If not, whether the items are entitled to duty-reduced treatment under the CFTA?

LAW AND ANALYSIS:

Claimed Classification

Heading 8707, HTSUSA, provides for parts and accessories of motor vehicles. In HRL 088757 of March 16, 1992, we ruled upon this Importer's Application for Further Review of Protest #0901- 90-000276 - finished Assemblies for automobiles. Therein, we held that the made up cargo nets could not be classified as parts of automobiles because "the provision for made up nets [5608] specifically describes the goods in question, i.e., the cargo net assemblies are made up nets of textile materials." See General Explanatory Note III to Section XVII, HTSUSA (parts must not be more specifically included elsewhere in the Nomenclature).

CFTA Reduced Duty

Section 10.307(c), Customs Regulations (19 C.F.R. 10.307(c)), states that for goods for which a preference is claimed under the CFTA, an Exporter's Certificate of Origin (CF 353) must be available at the time the preference is claimed. The Shipper's Declaration of Canadian Origin, while documentation required under APTA, does not substitute for the CF 353. Duty reduction under the CFTA was properly denied.

American Goods Returned

Subheading 9801.00.10, HTSUSA, provides for, inter alia, American Goods exported and returned. Counsel claims that the imported bungee is properly classified herein
because it is a product of the United States returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad. All of the bungee was imported into Canada from [a company in the U.S.]. All of the bungee was returned to the United States in its original form and did not undergo any processing while it was in Canada.

We agree. The bungee is therefore eligible, under the specific factual situation described above, for a Free rate of duty, upon compliance with all applicable regulations.

HOLDING:

As a result of the foregoing, the instant merchandise is classified as follows:

Bungee

... under subheading 9801.00.1099, HTSUSA, as products of the United States when returned after having been exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad, other, other. The applicable rate of duty is Free.

Raschel Netting

... under subheading 6002.43.0010, HTSUSA, textile category 229, as other knitted or crocheted fabrics, other fabrics, warp knit (including those made on galloon knitting machines), of man-made fibers, open-work fabrics. The applicable rate of duty is 14 percent ad valorem.

Knotted Netting

... under subheading 5608.19.2090, HTSUSA, textile category 229, as knotted netting of twine, cordage or rope; made up fishing nets and other made up nets, of textile materials, of man-made textile materials, other, other, other. The applicable rate of duty is 10 percent ad valorem.

Webbing

... under subheading 5515,19.0090, HTSUSA, textile category 220, as other woven fabrics of synthetic staple fibers, of polyester staple fibers, other, other, other. The applicable rate of duty is 17 percent ad valorem.

Thread

... under subheading 5401.10.0000, HTSUSA, textile category 200, as sewing thread of man-made filaments, whether or not put up for retail sale, of synthetic filaments. The applicable rate of duty is 13 percent ad valorem.

Labels

... under subheading 5807.10.1090, HTSUSA, as labels, badges and similar articles of textile materials, in the piece, in strips or cut to shape or size, not embroidered, woven, labels, other. The applicable rate of duty is 9 percent ad valorem.

Hardware

... the plastic mushrooms, T-anchors and D-anchors, each containing screws, and the plastic mushrooms, T-anchors and D-anchors, each without screws but having threaded centers, under subheading 3926.30.5000, HTSUSA. The applicable rate of duty is 5.3 percent ad valorem.

... the base metal screws under subheading 7318.15.80, HTSUSA. The applicable rate of duty is 9.5 percent ad valorem.

... The mounting brackets under subheading 8302.30.3000, HTSUSA. The applicable rate of duty is 3.1 percent ad valorem.

Poly Bags

... under subheading 3923.21.0050, HTSUSA (HTSUSA number in effect at time of entry), as articles for the conveyance or packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics, sacks and bags (including cones), of polymers of ethylene. The applicable rate of duty is 3 percent ad valorem.

Pallets

... under subheading 4415.20.8000, HTSUSA, as packing cases, boxes, crates, drums and similar packings, of wood; cable- drums, of wood; pallets, box-pallets and other load boards, of wood, pallets, box-pallets and other load boards, other. The applicable rate of duty is 16~ percent ad valorem.

The protest should be allowed in part and denied in part consistent with the opinions expressed above. A copy of this decision should be attached to the Customs Form 19 and provided to the protestant as part of the notice of action on the protest.

Sincerely,

John Durant, Director
Commercial Rulings Division

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