HQ 561291 - Country of origin marking of base station transceiver subsystems; Article 509 - United States International Trade Commision Rulings

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HQ 561291

March 16, 2000
MAR-05 RR:CR:SM 561291 BLS

CATEGORY: MARKING

TARIFF NO: 8525:20.9080

Mr. Bill Skilton
Nortel Networks
55 Pineview Drive
Amherst, New York 14228

RE: Country of origin marking of base station transceiver subsystems; Article 509

Dear Mr. Skilton:

This is in reference to your letter dated February 9, 1999, and faxes from your office of various dates, requesting the country of origin marking requirements for certain base station transceiver subsystems imported from Canada.

FACTS:

Nortel Networks ("Nortel") imports Code Division Multiple Access ("CDMA") and Time Division Multiple Access ("TDMA") wireless systems into the U.S. The CDMA/TDMA are complete base station transceiver subsystems used for international and local wireless transmission and reception. The base station subsystem interfaces with the mobile stations and the wireless networks. The base station controller and base transceiver are primary components of the base station subsystem. The base station controller concentrates calls and serves as the nerve center for the base station subsystem. The base transceiver station provides the radio interface between the network and the handsets.

An integral part of the CDMA/TDMA systems are the "pack fills", which are multiple printed circuit assemblies plugged (assembled) into a shelf, bay or frame. These units contain different combinations of function cards related to the receipt and transmission of telecommunication signals. Depending upon the order, the pack fills may consist of one or more printed circuit packs, XCRV transceivers, RX receivers, power supplies, shelf assemblies, driver modules or amplifiers. The parts may be fully manufactured in Canada or purchased from U.S. or offshore vendors, including Original Equipment Manufacturers (OEM). As noted, the pack fills are imported as part of the CDMA/TDMA wireless system and are packaged with the other components of the system.

The CDMA/TDMA systems are assembled and tested in Canada. However, due to the delicate nature of the transceiver subsystems, the systems are broken down for shipping purposes. Thus, circuit packs placed in frames in Canada for testing are removed from the frames when shipped to the U.S.

Frames or shelves will be shipped with the pack fills. However, pack fill systems may also be shipped separately to meet customer requirements for repair or replacement units. For example, if an existing pack fill is damaged, an order will be placed for a replacement pack fill. You submit for our review three examples of pack fill
configurations, including the country of origin and tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS),of each of the pack fill components, as follows:

Sample No. 1

48 V Shelf Converter Assembly - Canada - Subheading 8529.90

PCA CCA Transient Suppressor - Malaysia - Subheading 8529.90

PCA CCA Frequency Reference - U.S. or Canada - Subheading 8531.90

Mechanical Panel - U.S. - Subheading 8529.90

The materials included with the submission disclose that this pack fill is a Timing Frequency Unit (TFU) that houses various sub-unit modules each containing a different function that works together with the other units to form the TFU. The TFU controller, site alarm and TFU frequency reference cards provide and synchronize time signals throughout the system to which it is connected. Additionally, the alarm system appears to have the function of tracking timing data reference points and informing the system of when these reference points are met. The power converter is a generic type unit that can be used on many different types of cards as a power plant and is not directly related to the function of the unit. Each card is designed to work with the pack fill units; however, they are self-contained and can act independently with respect to its stated function.

Sample No. 2

PCA CCA Receiver 1900 MHz - U.S. or Canada - Subheading 8529.90

PCA CCA Upconverter - U.S. or Canada - Subheading 8529.90

Stand Alone NTI Power System - U.S. or Canada - Subheading 8543.89

The materials indicate that the imported article is a base station transceiver system (BTS) which consists of the Universal Sector Kit, three radio frequency assembly kits and a mounting kit. Based on the information provided, the three radio frequency kits are self-contained and manufactured as a unit. The sector system consists of three independently functional sub-units that are modularized and can be
placed into the sub-unit at different stages of manufacture.

Sample No. 3

RX Front End Module - Canada - Subheading 8529.90

Driver Amp Module - Canada - Subheading 8543.89

C800 X CVR Shelf Assembly RFI - Canada - Subheading 8529.90

Amplifier RF High Power - U.S. - Subheading 8543.89

This imported unit consists of a group of modules that are connected to form a transceiver. The kit consists of a channel card, frequency modules, and duplexing equipment to form an expandable transceiver. The different modules are connected in a cabinet to form the transceiver. As in Samples 1 and 2, each sub-unit is independently contained and can be used in other systems.

You state that the CDMA/TDMA systems as well as the individual pack fills are classifiable in subheading 8525.20, HTSUS, which provides for:

Transmission apparatus for radiotelephony, radiotelegraphy, radio broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras or other video camera recorders: Transmission apparatus incorporating reception apparatus.

For purposes of this ruling, we will assume that the tariff classifications that you have provided for the pack fill components, the CDMA/TDMA systems and pack fills are correct.

ISSUE:

What are the country of origin marking requirements for the imported CDMA/TDMA systems or pack fill systems?

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), requires that, unless excepted, every article of foreign origin (or its container) imported into the U.S. 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 manner as to indicate to the ultimate purchaser the English name of the country of origin of the article. The regulations implementing the requirements and exceptions to 19 U.S.C. 1304 are set forth in Part 134, Customs Regulations (19 CFR 134).

The country of origin marking requirements for a “good of a NAFTA country” are also determined in accordance with Annex 311 of the NAFTA, as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103182, 107 Stat. 2057) (December 8, 1993) and the regulations set forth in 19 CFR Parts 102, 134.

Section 134.1(b) (19 CFR 134.1(b)) of the regulations defines “country of origin” as:

The country of manufacture, production, or growth of any article of foreign origin entering the U.S. 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”; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.

Section 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) 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.

Part 102 of the regulations (19 CFR Part 102), sets forth the “NAFTA Marking Rules” for purposes of determining whether a good is a good of a NAFTA country. Section 102.11 of the regulations (19 CFR 102.11) sets forth the required hierarchy for
determining country of origin for marking purposes. Section 102.11(a) provides that “[t]he 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 requirements of these rules are satisfied.”

“Foreign Material” is defined in section 102.1(e) of the regulations as “a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced. “ For purposes of this ruling, we are assuming that the only foreign (non-Canadian) materials incorporated in the imported systems and pack fills are those which you have identified in your ruling request, as set forth above.

Sample No. 1

Since this system includes components that are of foreign (non-Canadian) origin, section 102.11(a)(3) is the applicable rule which must first be applied. Under this rule, 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 set out in section 102.20. Section 102.20 of the rules sets forth the specific tariff classification changes and/or other operations which are specifically required in order for country of origin to be determined on the basis of operations performed on the foreign materials contained in a good. Thus, in order to determine whether Canada is the country of origin of the good under this rule, we must look at those materials whose country of origin is other than Canada. (As one component may be of Canadian or U.S. origin, we will assume for purposes of this example that it is of U.S.-origin.) Therefore, in this case, the Transient Suppressor is of Malaysian origin and the PCA CCA Frequency Reference and Mechanical Panel are of U.S.origin (“Foreign Material” under 19 CFR 102.11(e)).

You state that the CDMA/TDMA systems and the pack fills are classifiable in subheading 8525.20, Harmonized Tariff Schedule of the United States (HTSUS). The applicable change in tariff classification is set out in section 102.20(o), Customs

Regulations (19 CFR 102.20(o)), section XVI: chapters 84 through 85:

8525.108525.20.......A change to subheading 8525.10 through 8525.20 from any other subheading outside that group.

When imported into Canada, the PCA CCA Frequency Reference is classifiable in subheading 8531.90, HTSUS, which provides for “Electric sound or visual signaling apparatus (for example, bells, sirens, indicator panels, burglar or fire alarms), other than those of heading 8512 or 8530); Parts.” The Transient Suppressor and Mechanical Panel are classifiable under subheading 8529.90, HTSUS, which provides for "...parts suitable for use solely or principally with the apparatus of headings 8525 to 8528...Other."

Accordingly, as there is a change in classification under this rule, the country of origin of the imported CDMA/TDMA system, or pack fill (if imported separately as a replacement unit), is Canada.

Sample No. 2

As this pack fill also includes components that are assumed for purposes of this example to be of U.S. (foreign) origin, section 102.11(a)(3) is the applicable rule which must first be applied.

When imported into Canada, the PCA CCA Receiver and the PCA CCA Upconverter and Stand Alone NTI Power System are classifiable under subheading 8529.90, HTSUS, as “...parts suitable for use solely or principally with the apparatus of headings 8525 to 8528...Other." The Stand Alone Power System is classifiable under subheading 8543.89, which provides for “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus: Other“

Accordingly, as there is a change in classification under this rule, the country of origin of the imported CDMA/TDMA unit is Canada.

Sample No. 3

This pack fill includes one component of foreign (U.S.) origin, i.e., the Amplifier RF High Power, classifiable under subheading 8543.89, HTSUS.

As this component also undergoes a change in classification under the rule, the
country of origin of the imported system or pack fill is Canada.

HOLDING:

Assuming that the classification of the pack fill components and the CDMA/TDMA systems as pack fills are as described above, components of U.S. and Malaysian origin undergo a tariff shift under 19 CFR 102.20 when assembled into the pack fills described under Sample Nos. 1, 2 and 3. Therefore, when imported into the U.S., the CDMA/TDMA systems or pack fills (if imported separately) are of Canadian origin.

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

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