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HQ 955990

June 7, 1994

CLA-2 CO:R:C:M 955990 DWS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8708.99.58

Ms. Susan Knowlton
Willson International Inc.
2412 Tenth Avenue
Port Huron, MI 48060

RE: Wheel Hub Assemblies; Double Row Ball Bearings; 8482.10.50; NAFTA; General Notes 12(b)(i) and (ii)(A), and 12(t)/87.36(A); Change in Tariff Classification

Dear Ms. Knowlton:

This is in response to your letter of February 3, 1994, on behalf of M.B. Industries, Inc., to the Regional Commissioner of Customs, New York, concerning the applicability of the North American Free Trade Agreement (NAFTA) and classification of wheel hub assemblies under the Harmonized Tariff Schedule of the United States (HTSUS). Your letter was referred to this office for a response.

FACTS:

The merchandise consists of three models of double flanged wheel hub assemblies (model nos. RP-500, RP-501, and RP-502), imported from Canada. Model RP-500 is comprised of double roll ball bearings (Canada), a spindle (U.S.), a retainer plate (U.S.), a retainer gasket (U.S.), wheel studs (U.S.), a seal (U.S.), and retainer screws (U.S.). Model RP-501 is comprised of double row ball bearings (U.S. or Japan), a spindle (U.S.), a retainer plate (U.S.), a retainer gasket (U.S.), wheel studs (U.S.), a seal (U.S.), and retainer screws (U.S.). Model RP-502 is comprised of double row ball bearings (U.S. or Japan), a spindle (U.S.), a retainer plate (U.S.), a retainer gasket (U.S.), wheel studs (U.S.), a seal (U.S.), and retainer screws (U.S.).

The RP-501 and RP-502 wheel hub assemblies may incorporate either U.S. manufactured double row ball bearings or previously imported Japanese double row ball bearings, depending upon availability. You state that the actual country of origin of the bearings in any given assembly is identifiable and visible.

ISSUES:

Under which provision of the HTSUS are the double flanged wheel hub assemblies classifiable.

Whether the three models of double flanged wheel hub assemblies are eligible for preferential tariff treatment under the NAFTA.

LAW AND ANALYSIS:

CLASSIFICATION

Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that classification is determined according to the terms of the headings and any relative section or chapter notes.

The subject wheel hub assemblies are specifically classifiable under subheading 8708.99.58, HTSUS, which provides for: "[p]arts and accessories of the motor vehicles of headings 8701 to 8705: [o]ther parts and accessories: [o]ther: [o]ther: [o]ther: [d]ouble flanged wheel hub units incorporating ball bearings." The general, column one rate of duty for goods classifiable under this provision is 3.1 percent ad valorem.

NAFTA APPLICABILITY

To be eligible for tariff preferences under the NAFTA, goods must be "originating goods" within the rules of origin in General Note 12(b), HTSUS. General Notes 12(b)(i) and (ii)(A) state:

[f]or the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if --

(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or

(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that --

(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein . . .

With regard to model RP-500, and models RP-501 and RP-502 which contain double row ball bearings from the U.S., because all of the components which make up the wheel hub assemblies are from Canada or the U.S., under General Note 12(b)(i), HTSUS, they are eligible for preferential tariff treatment under the NAFTA.

With regard to models RP-501 and RP-502 which contain double row ball bearings from Japan, because they contain parts from countries other than Mexico, Canada, and/or the U.S., General Note 12(b)(i), HTSUS, does not apply. Therefore, we must resort to General Note 12(B)(ii)(A), HTSUS.

General Note 12(t)/87.36(A), HTSUS, states:

[a] change to subheading 8708.99 from any other heading.

Therefore, any non-originating materials of the subject wheel hub assemblies must come from a heading other than subheading 8708.99, HTSUS. The non-originating double row ball bearings are classifiable under subheading 8482.10.50, HTSUS, which provides for: "[b]all or roller bearings, and parts thereof: [b]all bearings: [o]ther."

Consequently, a change in tariff classification does occur, and, therefore, models RP-501 and RP-502, which contain double row ball bearings from Japan, are eligible for preferential tariff treatment under the NAFTA.

HOLDING:

The wheel hub assemblies (models RP-500, RP-501, RP-502) are classifiable under subheading 8708.99.58, HTSUS, as double flanged wheel hub units incorporating ball bearings.

All three models are eligible for preferential tariff treatment under the NAFTA.

Sincerely,

John Durant, Director

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