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HQ 959619




July 22, 1998

CLA-2 RR:CR:GC 959619 DWS

CATEGORY: CLASSIFICATION

TARIFF NO.: 8536.69.80

Port Director of Customs
111 W. Huron Street
Buffalo, New York 14202-2378

RE: IA 40/96; Base Assemblies for Relays; NAFTA

Dear Port Director:

This is in response to your undated memorandum (CLA-1-0-COD: JM), forwarding a request for internal advice submitted by counsel for Omron Dualtec Automotive Electronics, Inc. (Omron), concerning the classification of four- or five-pin base assemblies for relays under the Harmonized Tariff Schedule of the United States (HTSUS), and the applicability of the North American Free Trade Agreement (NAFTA) to the complete relays. A sample of the four-pin base assembly (SPST 280) was submitted for our review.

On July 6, 1998, counsel for and representatives of Omron met with representatives of this office to discuss the relevant classification issues involved in this case. Also on that date, counsel presented a supplemental submission and additional samples for our review. In a letter dated July 17, 1998, counsel again submitted additional arguments and samples for our review.

FACTS:

In Canada, several components that are sourced outside of Canada are assembled together to make an automobile relay. Each relay incorporates three non-originating components, a contact, a resistor, and a base assembly. The components at issue constitute the Korean-made 280 base assemblies for the relays, each of which consists of a square plastic molded base (approximately 1" by 1") with four or five connecting metal posts attached thereto, respectively.

In Canada, each Korean-made base assembly is assembled with other originating components, such as an electromagnetic coil, consisting of a plastic bobbin and coiled wire; a ferromagnetic core pin, which fits inside the bobbin and becomes magnetized with the passage of current through the coil; a yoke that holds the bobbin; a spring assembly (consisting of a spring and either one or two contacts); and an armature, which is attached to the spring assembly to move according to the electromagnetic force applied by the pin. The assembled relay is then inserted into a plastic "indoor" housing cover (for use under the dashboard) or "outdoor" housing cover (for use under the hood) for subsequent installation in an automobile for signaling and other similar applications. The lip around the outer edge of the plastic base assembly allows the base to fit snugly with the cover, forming a protective, sealed closure.

ISSUE:

Whether the base assemblies are classifiable under subheading 8536.69.80, HTSUS, as plugs for making connections to or in electrical circuits, or under subheading 8538.90.80, HTSUS. as parts of relays of heading 8536, HTSUS.

Whether the complete relays are eligible for preferential 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). GRI 1 provides that classification is determined according to the terms of the headings and any relative section or chapter notes.

The HTSUS provisions under consideration are as follows:

8536 Electrical apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits (for example, switches, relays, fuses, surge suppressors, plugs, sockets, lamp-holders, junction boxes), for a voltage not exceeding 1,000 V:

Lamp-holders, plugs and sockets:

8536.69 Other:

8536.69.80 Other.

8538 Parts suitable for use solely or principally with the apparatus of heading 8535, 8536 or 8537:

8538.90 Other:

Other:

8538.90.80 Other.

It is your office's opinion that the Korean-made base assemblies, in their condition as imported into Canada, are classifiable in heading 8536, HTSUS, as apparatus for making connections to or in electrical circuits. Omron is of the opinion that the Korean-made base assemblies cannot be considered plugs or other connectors and are parts of relays properly classifiable in heading 8538, HTSUS. Omron notes that it had obtained a ruling letter from Revenue Canada classifying the base assemblies in heading 8538, HTSUS. There is no disagreement that the completely assembled automobile relays are properly classifiable in heading 8536, HTSUS, specifically under subheading 8536.41.00, HTSUS, as relays for a voltage not exceeding 60 V.

Section XVI, note 2, HTSUS, states that:

[s]ubject to note 1 to this section, note 1 to chapter 84 and to note 1 to chapter
85, parts of machines (not being parts of the articles of heading 8484, 8544,
8546 or 8547) are to be classifiable according to the following rules:

(a) Parts which are goods included in any of the headings of chapters 84 and 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8485, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings;

(b) Other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use with goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517;

(c) All other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8485 or 8548.

There is no question that the subject base assemblies are parts of automobile relays. However, in accordance with section XVI, note 2(a), HTSUS, if the base assemblies are themselves goods included in any of the headings of chapters 84 or 85, HTSUS, they are so classifiable. Therefore, we must ascertain whether the assemblies are goods of heading 8536, HTSUS, as claimed by your office.

In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes may be utilized. The Explanatory Notes, although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUS, and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). Explanatory Note 85.36(III)(A)(1) (p. 1505) states:

(III) APPARATUS FOR MAKING CONNECTIONS TO OR IN ELECTRICAL CIRCUITS

This apparatus is used to connect together the various parts of an electrical circuit. It includes:

(A) Plugs, sockets and other contacts for connecting a movable lead or apparatus to an installation which is usually fixed. This category includes:

(1) Plugs and sockets (including those for connecting two movable leads). A plug may have one or more pins or side contacts which match corresponding holes or contacts in the socket. The rim or one of the pins may be used for earthing purposes.

Based upon the information provided, when the mounted prongs of each base assembly mate with a matching socket in an electrical circuit, the base assembly makes a connection to or in an electrical circuit. Each base assembly possesses multiple prongs which match corresponding holes or contacts in said socket. Therefore, the base assemblies meet the terms of heading 8536, HTSUS, and are described as plugs in Explanatory Note 85.36(III)(A)(1). We recognize that each base assembly possesses additional components relating to the operation of the relay. However, in their condition as imported into Canada, it is our position that the base assemblies principally function as plugs described in heading 8536, HTSUS, specifically under subheading 8536.69.80, HTSUS.

In accordance with section XVI, note 2(a), HTSUS, because the base assemblies are goods of heading 8536, HTSUS, they are precluded from classification in heading 8538, HTSUS, and are classifiable in heading 8536, HTSUS, specifically under subheading 8536.69.80, HTSUS.

NAFTA

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, which, in part, states that:

[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),

Because the relays contain the Korean-made base assemblies, 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)/85.120(A), HTSUS, states:

[a] change to heading 8536 from any other heading, except from tariff items 8538.90.10,
8538.90.30 or 8538.90.60.

As we have previously stated, both the complete relays and base assemblies are goods of heading 8536, HTSUS. Therefore, the base assemblies do not undergo the tariff shift to heading 8536, HTSUS, as required by General Note 12(t)/85.120(A), HTSUS. Consequently, the complete relays are not eligible for preferential treatment under the NAFTA.

HOLDING:

The base assemblies are classifiable under subheading 8536.69.80, HTSUS, as plugs for making connections to or in electrical circuits.

The complete relays are not eligible for preferential treatment under the NAFTA.

This decision should be mailed by your office to the internal advice requester no later than sixty (60) days from the date of this letter. On that date, the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

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