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NY F86157




May 15, 2000

MAR-2 RR:NC:1:102 F86157

CATEGORY: MARKING

Ms. Sandra Shaw
WABCO Freight Car Products
PO Box 2050
Hamilton, Ontario L8N 3T5

RE: THE COUNTRY OF ORIGIN MARKING OF VALVES; ARTICLE 509

Dear Ms. Shaw:

In your letter dated April 14, 2000 you requested a ruling on behalf of WABCO as to the origin of valves assembled in Mexico from US and Canadian components. Specifically, you inquire whether or not the valves will be considered “made in Canada” when exported from Mexico.

The items in question are described as a load sensor valve, a load proportional valve, and a cock and dirt collector. The valves are for use in the braking system for railway cars. You state in your letter that components of the valves , including unfinished castings of Canadian origin, will be exported to Mexico to be machined and assembled . You indicate that the assembled valves may be exported from Mexico to Canada and then exported to the US, or exported directly from Mexico to the US. In either case, the valves are complete upon exportation and would not be altered once exported from Mexico.

The country of origin marking requirements for a "good of a NAFTA country" are determined in accordance with Annex 311 of the North American Free Trade Agreement ("NAFTA"). 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 U.S. as determined under the NAFTA Marking Rules set out at Part 102, Customs Regulations (19 CFR Part 102).

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. That 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.

“Foreign material” is defined in section 102.1(e), Customs Regulations (19 CFR. §102.1(e)), 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.”

Based on the information submitted, the valves are assembled in Mexico from foreign components originating in the US and Canada. The valves are neither wholly obtained or produced, nor produced in Mexico exclusively from domestic materials as those terms are defined under section 102.1, Customs Regulations (19 CFR §102.1). Accordingly, section 102.11(a)(3), Customs Regulations (19 CFR §102.11(a)(3)), is the applicable rule that must be applied to determine the origin of the valve.

Pursuant to section 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 set out in section 102.20, Customs Regulations (19 CFR §102.20). Section 102.20 sets forth the specific tariff classification changes and/or other operations, which are specifically required for the country of origin to be determined on the basis of operations performed on the foreign materials contained in a good.

The finished valves are classifiable under heading 8481, Harmonized Tariff Schedule of the United States (HTSUS), which provides for taps, cocks, valves and similar appliances. The components used to assemble the valves would be either specifically provided for outside of HTSUS heading 8481, or provided for as parts of valves under subheading 8481.90, HTSUS.

For the finished valves classified in heading 8481, HTSUS, the applicable change in tariff classification set out in section 102.20(o), Section XVI, Chapters 84 through 85, provides:

A change to subheading 8481.10 through 8481.80 from any other heading, or from subheading 8481.90 except when resulting from a simple assembly.

Accordingly, there are two alternative bases by which an article may undergo a tariff shift.

Components, such as o-rings and springs, which may be specifically provided for and classified outside of heading 8481, HTSUS, will undergo the applicable tariff shift set out in the first part of the above rule because they change headings at the four digit level. Components, such as valve bodies, which are classified as parts of valves in subheading 8481.90, HTSUS, will meet the alternative provision in the tariff shift rule if the finished valves are produced other than by a simple assembly.

Simple assembly is defined in 19 CFR §102.1(o) as follows:

Simple assembly means the fitting together of five or fewer parts all which are foreign (excluding fasteners such as screws, bolts, etc.) by bolting, gluing, soldering, sewing or by other means without more than minor processing.

The production of the finished valves does not fall within this definition of a simple assembly because based on the information submitted it involves more than five parts, all of which are foreign, i.e., originating from the US and Canada, and requires some machining of the Canadian castings. Therefore, for those components classified as parts of valves the alternative test of the tariff shift rule is satisfied because the components change classification in Mexico from subheading 8481.90 to subheading 8481.30.10 through 8481.80 by means of processing other than a simple assembly.

Accordingly, we find that the subject valves, regardless of whether they are exported to the US directly from Mexico or by way of Canada , cannot be considered “made in Canada” because the country of origin is Mexico.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 CFR Part 181).

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Kenneth T. Brock at 212-637-7026.

Sincerely,

Robert B. Swierupski
Director,

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