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HQ 559946




March 26, 1997

MAR-05 RR:TC:SM 559946 KKV

CATEGORY: MARKING

Mr. Rudy A. Pina
R.A. Pina & Associates
P.O. Box 2496
Nogales, AZ 85628

RE: Country of origin determination for wire harnesses assembled in Mexico; 102.11; NAFTA; Article 509; tariff shift

Dear Mr. Pina:

This is in response to your letter dated July 1, 1996, on behalf of North American Interconnect Company, which requests a binding ruling regarding the country of origin and marking requirements of certain wire harnesses assembled in Mexico from U.S. components. No sample has been submitted for our consideration.

FACTS:

We are informed that North American Interconnect exports electrical insulated wire (classifiable under subheading 8544.40, Harmonized Tariff Schedule of the United States (HTSUS)), blades (classifiable under subheading 8536.41, HTSUS) and PVC compound (classifiable under subheading 3904.21, HTSUS) to its maquiladora facility in Mexico. In a telephone conversation you stated that U.S.-origin PVC compound is exported to Mexico in pellet form, where it is melted and poured, forming a plug. The plug is then assembled with the electrical insulated wire and the blades, both of U.S. origin, into finished electrical wire harnesses, classifiable under subheading 8544.41.00, HTSUS, which are imported into the U.S. You advise that the good is an originating good under the North American Free Trade Agreement (NAFTA)..

ISSUE:

What is the country of origin and marking requirements of electrical wire harnesses assembled in Mexico from U.S. components and materials?

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article. By enacting 19 U.S.C. 1304, Congress intended to ensure that the ultimate purchaser would be able to know by inspecting the marking on the imported goods the country of which the goods are the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will. United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 C.A.D. 104 (1940).

Section 134.1(b), Customs Regulations (19 CFR 134.1(b)), defines "country of origin" as:

The country of manufacture, production, or growth of any article of foreign origin entering the United States.
Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the "country of origin" within the meaning of this part; however for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.

Section 134.1(j), Customs Regulations (19 CFR 134.1(j), provides that the "NAFTA Marking Rules" are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g), Customs Regulations (19 CFR 134.1(g)), defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules, set forth at 19 CFR Part 102. Section 134.45(a)(2) of the Customs regulations (19 CFR 134.45(a)(2)), provides that a "good of a NAFTA country" may be marked with the name of the country of origin in English, French or Spanish.

Section 102.11, Customs Regulations (19 CFR 102.11), sets forth the required hierarchy for determining whether a good is a good of a NAFTA country for marking purposes. This section states that the country of origin of a good is the country in which:

(1) The good is wholly obtained or produced;

(2 The good is produced exclusively from domestic materials; or

(3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.

Section 102.1(e), Customs Regulations (19 CFR 102.1(e)) defines "foreign material" as "a material whose country of origin as determined under these rules is not the same country or origin as the country in which the good is produced."

Based on the information provided, components and materials of U.S. origin are exported to Mexico for assembly into finished electrical wire harnesses prior to the importation into the U.S. Because the harnesses are assembled in Mexico of U.S. materials, the harnesses are neither wholly obtained or produced, nor produced exclusively from domestic materials. Accordingly, neither 19 CFR 102.11(a)(1) or 102.11(a)(2) may be used to determine the origin of the finished articles.

Your letter indicates that upon exportation to Mexico the component materials, electrical insulated wire, blades and PVC compound, are classifiable under subheadings 8544.49, 8536.41, and 3904.21, HTSUS, respectively. Subsequent to assembly operations in Mexico, you indicate that the finished electrical wire harnesses are imported into the U.S. under subheading, 8544.41.00, HTSUS, which provides for "insulated (including enameled or anodized) wire, cable (including coaxial cable) and other insulated electric conductors, whether or not fitted with connectors; optical fiber cables, made up of individually sheathed fibers, whether or not assembled with electric conductors or fitted with connectors: other electric conductors, for a voltage not exceeding 80 V: fitted with connectors." Because no sample or other information has been submitted which would permit us to verify the validity of these classifications, we will assume they are correct for purposes of this ruling.

Pursuant to 19 CFR 102.11(a)(3), the country of origin of a good is the country in which each foreign material incorporated in that good undergoes an applicable change in tariff classification as set forth in 19 CFR 102.20, and satisfies any other applicable requirements of that section. In the case before us, because the finished wire harnesses imported into the U.S. from Mexico are classified under subheading 8544.41.00, HTSUS, the change in tariff classification must be made in accordance with section 102.20(p), Section XVI: Chapters 84 through 85, heading 8544.11-8544.70, HTSUS, which requires
"[a] change to subheading 8544.11 through 8544.70 from any other subheading, including another heading within that group, except when resulting from a simple assembly."

In the case before us, the electrical insulated wire, initially classified under subheading 8544.49, HTSUS, and the blades, which are initially classified under subheading 8536.41, HTSUS, and the PVC compound, which is initially classified under subheading 3904.21, HTSUS, are subsequently classified under subheading 8544.41.00, HTSUS, when joined together, thus undergoing the required tariff shift. However, the rule strictly excludes a change in tariff classification due to "simple assembly," which requires the "fitting together of five or fewer parts, all of which are foreign (excluding fasteners such as screws, bolts, etc) by bolting, gluing, soldering, sewing or by other means without more than minor processing" (emphasis added). See 19 CFR 102.10(o).

Unlike the insulated wire and blades, the PVC compound exported to Mexico in pellet form is not a finished component. Instead, it is a raw material which, by virtue of melting and molding operations, is transformed into a new article, a molded plug, classifiable under subheading 8536.69.00, HTSUS, prior to its assembly with U.S. components into a finished wire harness. Because the plug is neither wholly obtained or produced in Mexico, nor produced exclusively from Mexican materials, the origin of the plug may not be determined under 19 CFR 102.11(a)(1) or 102.11(a)(2). Pursuant to 19 CFR 102.11(a)(3), because the finished plug is classifiable under subheading 8536.69.00, HTSUS, the change in tariff classification must be made in accordance with section 102.20(p), Section XVI: Chapters 84 through 85, heading 8544.11-8544.70, HTSUS, which requires "[a] change to subheading 8536.10 through 8536.90 from any other subheading, including another heading within that group." Because the PVC compound, initially classified under subheading 3904.21, HTSUS, is subsequently classified under subheading 8536.69.00, HTSUS, as a result of melting and shaping operations in Mexico, the article undergoes the required tariff shift and the PVC compound is transformed into a domestic product - a plug of Mexican origin. Therefore, because the three components assembled in Mexico to create the finished wire harness are not all of foreign origin, there is no "simple assembly" within the meaning of 19 CFR 102.12(o), and all of the conditions necessary under the rule for the change in tariff classification of the finished wire harness have been met. Accordingly, the country of origin of the finished wire harnesses is Mexico, and the articles must be marked accordingly. Acceptable markings include, "Mexico," "Made in Mexico," "Assembled in Mexico" or words of similar meaning.

HOLDING:

On the basis of the information provided, where PVC compound is exported to Mexico in pellet form, where it is melted and molded into a plug which is assembled together with U.S. components into wire harnesses, the country of origin of the finished wire harnesses is Mexico, and the articles must be marked accordingly.

A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

John Durant, Director
Tariff Classification and Appeals Division

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