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HQ 966117

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April 17, 2003

CLA-2 RR:CR:GC 966117 DBS/CW

CATEGORY: CLASSIFICATION

TARIFF NO.: 9006.91.00; 9801.00.10

Port Director
Bureau of Customs and Border Protection
P.O. Box 3130
Laredo, TX 78044

RE: Protest 2304-02-100267; flash assemblies for single-use flash cameras; NAFTA eligibility; Post-importation NAFTA Excess Duty Refund claim; 19 CFR §181.31; 9801.00.10; 19 CFR §10.1

Dear Port Director:

This is our decision on Protest 2304-02-100267 filed against your classification, under the Harmonized Tariff Schedule of the United States (HTSUS), of flash charger assemblies. The entries were liquidated on June 7, 2002, and the protest was timely filed on August 30, 2002.

FACTS:

The merchandise at issue consists of flash charger assemblies extracted from single-use 35 mm cameras with built-in electronic stroboscopic flash. Protestant states that the cameras are assembled in the United States from U.S. and foreign parts, including the flash charger assemblies which were originally made in a non-NAFTA country. After the cameras are used in the United States, they are shipped to Mexico for disassembly. The used flash charger assemblies are inspected in Mexico to determine if they can be recycled for use in new single-use cameras with built-in electronic stroboscopic flash. Those that can be recycled are shipped back to the United States. Each assembly consists of a flash tube and plastic housing, and a printed circuit board populated with capacitors, resistors, a diode, transformer, transistor, copper contact switch, copper battery holder and trigger switch.

The merchandise was entered under subheading 9801.00.10, HTSUS, which provides for products of the United States when returned after being exported, without having been advanced in value or improved in condition by any process of manufacture or other means while abroad. However, as your office determined that subheading 9801.00.10, HTSUS, was an improper classification, the merchandise was reclassified and liquidated under subheading 9006.91.00, HTSUS, as parts and accessories for cameras.

In addition to tariff classification claims, protestant is claiming that the flash charger assemblies qualify for the “MX” preferential duty rate under the North American Free Trade Agreement (NAFTA) or, alternatively, that the goods are entitled to duty-free treatment under subheading 9801.00.10, HTSUS. In this Application for Further Review, the protestant has claimed eligibility for preferential treatment under NAFTA for the first time.

With respect to the subheading 9801.00.10, HTSUS, issue, protestant maintains that the assembly of various U.S. and foreign parts in the United States to produce the single-use cameras effects a substantial transformation of the foreign parts, resulting in the cameras being considered products of the United States. In this regard, protestant states that production of the cameras in the United States involves injection molding to create certain plastic components and the assembly of 16 different components, 13 of which are stated to be of U.S. origin and the remainder (including the flash charger assembly) of foreign origin. The assembly of the cameras in the U.S. is described as follows:

Mechanical unit is assembled from small parts; mechanical unit is attached to middle body; flash charger assembly is attached to middle body; front body is attached to middle body; film is inserted; back body is attached; battery is inserted; and cardboard label/cover is attached.

Protestant contends that the removal of the flash charger assemblies from the cameras during the disassembly operations in Mexico does not result in an advancement in value or improvement in condition of the flash charger assemblies.

ISSUES:

I. Whether the flash charger assembly for incorporation into a single-use flash camera is classifiable as a part of a photographic camera in subheading 9006.91.00, HTSUS, or as photographic flashlight apparatus in subheadings 9006.61.00, 9006.62.00 or 9006.69.00, HTSUS.

II. Whether the flash charger assemblies are entitled to preferential treatment under NAFTA when imported into the United States after having been disassembled from the used cameras in Mexico.

III. Whether the imported flash charger assemblies are entitled to duty-free treatment under subheading 9801.00.10, HTSUS.

LAW AND ANALYSIS:

I. Tariff Classification

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.

In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) may be utilized. ENs, though not dispositive or legally binding, provide commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. Customs believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

The HTSUS provisions under consideration are as follows:

9006 Photographic (other than cinematographic) cameras; photographic flashlight apparatus and flashbulbs other than discharge lamps of heading 8539; parts and accessories thereof:

Photographic flashlight apparatus and flashbulbs:

9006.61.00 Discharge lamp (“elelctronic”) flashlight apparatus

9006.62.00 Flashbulbs, flashcubes and the like

9006.69.00 Other

Parts and accessories:

9006.91.00 For cameras

All parties agree that the merchandise is classifiable under heading 9006, HTSUS. The provisions in contention are at the subheading level. Therefore, we turn first to GRI 6. GRI 6 provides:

For legal purposes, the classification of goods in the subheading of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.

The protestant argues that the instant assembly is classifiable as photographic flashlighting apparatus and flashbulbs of either subheading 9006.62.00, HTSUS, which provides for flashbulbs, flashcubes and the like; subheading 9006.61.00, HTSUS, which provides for discharge lamp flashlight apparatus; or of subheading 9006.69.00, HTSUS, which provides for other apparatus. The assembly was liquidated under subheading 9006.91.00, HTSUS, as parts and accessories for cameras. As stated in GRI 6, only subheadings at the same level are comparable. Therefore, we must first address the 5-digit subheadings “photographic flashlighting apparatus and flashbulbs” and “parts and accessories” because they are at the same level.

It is a well-established rule that a "part" of an article is something necessary to the completion of that article. It is an “integral, constituent, or component part, without which the article to which it is to be joined could not function as such article.” United States v. Willoughby Camera Stores, Inc., 21 C.C.P.A. 322 (1933). However, this ‘indispensability rule’ from Willoughby regarding parts has been relaxed over time. An article can be a "part" for tariff purposes even if it is an “accessory” or "optional equipment." See Beacon Cycle & Cupply Co. v. United States, 81 Cust. Ct. 46, 50 (1978), citing Victoria Distributors, Inc. v. United States, 57 CCPA 76, 425 F. 2d 759 (1970); Gallagher & Ascher Co. v. United States, 52 CCPA 11, C.A.D. 849 (1964); and cases cited in Vilem B. Haan v. United States, 67 Cust. Ct. 104, 332 F. Supp. 182 (1971). Whether a given article is a part of another article depends on the nature of the so-called "part," and its function and purpose in relation to the article which it is designed to serve. See id. A significant factor in determining whether merchandise is a "part" is whether it is dedicated for use on the article. See Victoria Distributors, Inc. v. United States, 57 CCPA at 80; Oxford International Corp. v. United States, 70 Cust. Ct. 217, 223 n.2, C.D. 4433 (1973).

The ENs to heading 9006, HTSUS, provide that parts and accessories includes “camera bodies; bellows; tripods; ball and socket mounting heads; shutters and diaphragms; shutter (including delayed action) releases; magazines for plates or films; lens hoods.” This list is instructive, but not exclusive. Further, as these exemplars are a product of the Harmonized System, these exemplars do not distinguish between which are parts and which accessories, but cover both. For example, under the HTSUS, a tripod is not considered a part of a camera, see Willoughby, 21 C.C.P.A. 322, but is covered by a provision for “parts and accessories” both domestically and at the international level.

A camera flash generally consists of a small battery, which serves as the power supply, a gas discharge tube, which actually produces the flash, and a circuit (made up of a number of electrical components), which connects the power supply to the discharge tube. See “How Camera Flashes Work” at http://www.howstuffworks.com, visited on March 10, 2003. In NY G84816, dated December 12, 2000, we classified a flash charger assembly for use in single-use (disposable) cameras in subheading 9006.91.00, HTSUS, as a part of a camera. It was comprised of a flash tube, circuit board, and capacitator. The ruling stated the camera’s battery provided the power supply, which was transferred and stored through the capacitator (and thus had no battery).

The instant flash assembly is comprised of the aforementioned components, as well as a reflector house for the gas discharge tube. The assembly is solely used in a single-use flash camera. While the flash function of the single-use camera is optional, the flash assembly is necessary to the completion of the finished camera. It is an integral, constituent and component part. The assembly for the flash is not itself a finished article. It is, in the most basic sense of the term, a part of a single-use flash camera. Therefore, it is classifiable according to GRI 1, as a part of a camera in subheading 9006.91.00, HTSUS.

The term "apparatus" has been defined by the Court of International Trade and its predecessor court as a combination of articles and materials which are intended, adapted, and necessary for the accomplishment of some purpose. See Deseret Co., v. United States, 10 CIT 609, 611 (1986); ITT Thompson Industries, Inc. v. United States, 3 CIT 36 (1982); Lenkurt Electric Co. v. United States, 63 Cust. Ct. 463, 467-68, CD 3937 (1969). Further, the courts have stated that the terms "parts" and "apparatus" are not mutually exclusive; an article may be both. See J.E. Bernard & Co., Inc. v. United States, 62 Cust. Ct. 536, 259 F. Supp. 1129 (1969) aff'd 58 CCPA 91, 436 F.2d 506 (1971) (meter irises in motion picture cameras were both parts and apparatus); Westinghouse Electric International Co. v. United States, 28 Cust. Ct. 209, 218, C.D. 1411 (1952) (cameras used with X-ray apparatus held to be parts and apparatus).

Whether the instant assembly may be both part and apparatus turns on what constitutes photographic flashlighting apparatus. For this, we turn to the ENs to heading 9006, HTSUS, for guidance. The ENs describe photographic flashlighting apparatus and flashbulbs as follows:

This group covers photographic flashlight apparatus and flashbulbs which are used for professional or amateur photography, in photographic laboratories or in photogravure work.

These devices produce very bright light for a very short duration (flash) and are thus distinguished from photographic lighting equipment of heading 94.05.

Photographic flashlighting can be obtained either by means of electrically or mechanically ignited devices or by means of discharge lamps (see Explanatory Note to heading 85.39).

Included here are :
(1) Separate flashbulbs.
In these the light is produced by a chemical reaction initiated by an electric current. A flashbulb can be used only once. It consists of a bulb enclosing the active substance and the igniting device (either a filament or electrodes). The most common types of flashbulbs are : (i) Oxygen-filled bulbs containing wire or finely shredded strip of, for example, aluminium, zirconium, aluminium-magnesium alloy or aluminium-zirconium alloy. (ii) Bulbs in which a ball of paste, consisting of one or more metal powders (e.g.,zirconium) mixed with an oxidising agent, is attached to each of the electrodes.

(2) Flashcubes.
These are devices in the form of a cube containing four flashbulbs and four reflectors. Each bulb in the cube is ignited in turn either electrically, or mechanically by percussion of an explosive material.

(3) Battery flashlamps.
Such lamps are fitted with an electric battery and an electrically ignited flashbulb or flashcube, and are usually operated by a synchroniser in the camera shutter.

The apparatus using discharge lamps is more complex. Whether built as a single unit or comprising several elements, it usually consists of :

(A) A mains, battery or accumulator-operated power pack; this works on the principle of the charge and discharge of a condenser and is usually controlled by a synchroniser incorporated in the camera shutter. Some types may have provision for varying the flash intensity and duration. (B) The discharge lamp with its stand and reflector. (C) A control lamp.
(D) A socket for connecting extra flashlamps. Power packs without the flashlamp stands and reflectors but comprising, besides the discharge elements, the flash release device and (possibly) auxiliary equipment for varying the intensity and duration of the flashes, fall in this heading as incomplete apparatus having the essential character of the complete apparatus.

It is evident from the foregoing ENs that photographic flashlighting apparatus and flashbulbs are finished articles of commerce. It states these articles are used for professional or amateur photography, in photographic laboratories or in photogravure work. (Emphasis added). While the term “apparatus” alone is a broad, all-encompassing term, see Deseret, 10 CIT at 611; ITT, 3 CIT at 44, the types of articles contemplated as photographic flashlighting apparatus are not simply things that produce a flash light for photography. Articles that are “used forphotography” are those that attach to and may be removed from the camera without disturbing the integrity of the camera, or may be stand-alone articles used in conjunction with photography. The term and the ENs denote that the class or kind of articles contemplated here to be sold to and employed by the camera user, not the camera manufacturer. None of the descriptions above contemplate inclusion of integral parts as photographic flashlighting apparatus.

As photographic flashlighting apparatus is a finished, complete item, and the flash charger assembly is an integral part of single-use flash camera, used by the manufacturer in assembling the complete camera, the assembly does not come within the scope of the subheading.

The instant assembly is clearly not covered by the description of a flashbulb because it is not separate from the camera, as separate flashbulbs are, and it can be used more than once. Thus, here, the term “apparatus” does not include integral parts. Accordingly, the assembly is not classifiable pursuant to GRI 1 and 6 as photographic flashlighting apparatus.

Nor does the assembly constitute incomplete or unfinished photographic flashlighting apparatus, classifiable according to GRI 2(a) because it does not have the essential character of the complete article, as the complete article here is the single-use camera, not photographic flashlighting apparatus. Accordingly, the assembly is covered only by the provision for parts of the goods of heading 9006, HTSUS.

Protestant contended that the assembly is ejusdem generis with articles of subheading 9006.62.00, HTSUS, which provides for flashbulbs, flashcubes and the like. The Court of Appeals for the Federal Circuit has held that when a list of items is followed by a general word or phrase, the rule of ejusdem generis is used to determine the scope of the general word or phrase. See Totes, Inc. v. United States, 69 F.3d 495, 498 (Fed. Cir. 1995). In classification cases, ejusdem generis requires that, for any imported merchandise to fall within the scope of the general term or phrase, the merchandise must possess the same essential characteristics or purposes that unite the listed examples preceding the general term or phrase. See id.; Sports Graphics, Inc. v. United States, 24 F.3d 1390, 1392 (Fed. Cir. 1994).

Subheading 9006.62.00, HTSUS, does incorporate a general phrase such that the doctrine could be applied. However, our analysis has not reached the 6- or 8-digit subheading levels, as we have already determined the assembly is outside the scope of photographic flashlighting apparatus. If, in fact, this level could be compared, the instant assembly is not ejusdem generis with flashbulbs and flashcubes for the same reasons that it is outside the scope of photographic flashlighting apparatus. These are finished articles that attach to a camera, but are not integral to the camera. Thus, subheading 9006.62.00, HTSUS, does not cover the instant merchandise.

Nor do we reach contemplation of subheadings 9006.61.00, HTSUS, or 9006.69.00, HTSUS. However, as explained above, the assembly is outside the scope of the apparatus provided for in these subheadings. Moreover, as a basket provision, subheading 9006.69.00, HTSUS, would not likely apply because a provision for parts is generally more specific than a basket provision. See U.S. Additional Rule of Interpretation 1(c); Ideal Toy Corp. v. United States, 58 C.C.P.A. 9, 433 F.2d 801, 804 (CCPA 1970); IBM v. United States, 152 F.3d 1332, 1338 (Fed. Cir. 1998); Bauerhin Techs. Ltd. Pshp. v. United States, 110 F.3d 774, 779 (Fed. Cir. 1997).

Protestant also contends that the flash charger assembly is classifiable according to GRI 3(b) because it is a composite good, comprised of components classifiable in different subheadings. It is not appropriate to reach GRI 3(b) if GRI 1 dictates the proper classification for particular merchandise. See Mita Copystar America v. United States, 160 F. 3d 710, 712 (Fed. Cir. 1998). The court in Mita Copystar held that if the plastic cartridges containing toner at issue are considered "parts" of a photocopy machine under the governing principles, it is unnecessary to go beyond GRI 1 to classify the toner cartridges. See id. The same rationale applies here. According to GRI 1, via GRI 6, the good clearly falls under parts of cameras. Therefore, it is not appropriate to address GRI 3(b).

II. NAFTA Rules of Origin

Sections 181.21 through 181.23, Customs Regulations (19 CFR §181.21-23), set forth the procedures and requirements for filing a claim for preferential treatment under the NAFTA at the time of importation. Section 181.21(a) states, in pertinent part, that:

[I]n connection with a claim for preferential tariff treatment for a good under the NAFTA, the U.S. importer shall make a written declaration that the good qualifies for such treatment. The written declaration may be made by including on the entry summary, or equivalent documentation, the symbol “CA” for a good of Canada, or the symbol “MX” for a good of Mexico, as a prefix to the subheading of the HTSUS under which each qualifying good is classified. . . .

However, section 520(d) of the Tariff Act of 1930, as amended (19 U.S.C. §1520(d)), provides:

Notwithstanding the fact that a valid protest was not filed, the Customs Service may, in accordance with regulations prescribed by the Secretary, reliquidate an entry to refund any excess duties paid on a good qualifying under the rules of origin set out in section 3332 of this title for which no claim for preferential tariff treatment was made at the time of importation if the importer, within 1 year after the date of importation, files, in accordance with those regulations, a claim that includes –
a written declaration that the good qualified under those rules at the time of importation; copies of all applicable NAFTA Certificates of Origin (as determined in section 1508(b)(1) of this title); and such other documentation relating to the importation of the goods as the Customs Service may require.

The Customs Regulations promulgated under this provision and setting forth these requirements are found in 19 CFR §181.31-33.

Section 181.31 provides, in pertinent part, as follows:

Notwithstanding any other available remedy, including the right to amend an entry so long as liquidation of the entry has not become final, where a good would have qualified as an originating good when it was imported into the United States but no claim for preferential tariff treatment on that originating good was made at that time under §181.21(a) of this part, the importer of that good may file a claim for a refund of any excess duties at any time within one year after the date of importation of the good in accordance with the procedures set forth in §181.32 of this part.

Protestant maintains that the above-quoted regulation indicates that an importer has the right to make a claim for NAFTA preferential treatment even after the one-year period (from the date of importation) has expired, if liquidation of the entry has not become final. According to protestant, “...this ‘right’ is separate and apart from the right to amend an entry within one year and is not encumbered by any specific time limitations (one year or otherwise), other than the requirement that the entry not be final.” We disagree. Customs has consistently held that, under the plain language of 19 U.S.C. §1520(d), an importer may make an initial claim for NAFTA preferential treatment either at the time of importation or at a later time, but within one year after the date of importation. See, for example, HQ 228936 dated August 29, 2001 (denying a protest under review for a 1520(d) claim because a claim for NAFTA preference with the designating symbol “MX” had not been made at the time of importation for the entries at issue), and HQ 562424 dated January 17, 2003. Protestant’s interpretation of section 181.31 renders the one-year time limitation set forth in 19 U.S.C. 1520(d) for making a NAFTA preferential claim that was not made at the time of importation meaningless.

In regard to the entries subject to this protest, the importer made no claims for preferential treatment under the NAFTA at the time of importation. Thus, the first condition precedent for a valid section 1520(d) post-importation claim is met. However, the initial claim for NAFTA preferential treatment was made in this case at the time of the filing of the protest on August 30, 2002 -- more than one year after the date of importation, April 23, 2001. Therefore, the second condition precedent for a post-importation NAFTA claim is not met. It is also noted that protestant’s claim for NAFTA preferential treatment did not include copies of the NAFTA Certificates of Origin pertaining to the goods, as required by 19 U.S.C. §1520(d) and 19 CFR §181.32. Thus, we find that the goods are ineligible for NAFTA preference.

III. 9801.00.10

Subheading 9801.00.10, HTSUS, provides for the duty-free entry of United States products that are exported and returned without having been advanced in value or improved in condition by any means while abroad. Articles satisfying the above conditions of the statute will be afforded duty-free treatment, provided the documentary requirements of section 10.1, Customs Regulations (19 CFR §10.1), are met. While some change in the condition of the product while it is abroad is permissible, operations which either advance the value or improve the condition of the exported product render it ineligible for duty-free entry upon return to the U.S. See, Border Brokerage Co. V. United States, 65 Cust. Ct. 50, C.D. 4052, 314 F. Supp. 788 (1970), appeal dismissed, 58 CCPA 165 (1970).

If an article consists wholly or partially of foreign components or materials, the article is considered to be a product of the U.S. for subheading 9801.00.10, HTSUS, purposes only if those components or materials have been substantially transformed during the production of the article in the U.S. A substantial transformation occurs "when an article emerges from a manufacturing process with a name, character, or use which differs from those of the original material subjected to the process." Texas Instruments, Inc. v. United States, 69 CCPA 152, 156, 681 F.2d 778, 782 (1982).

In determining whether the combining of parts or materials constitutes a substantial transformation, the issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 573 F. Supp. 1149 (CIT 1983), aff'd, 741 F.2d 1368 (Fed. Cir. 1984). If the manufacturing or combining process is a minor one which leaves the identity of the imported article intact, a substantial transformation has not occurred. See Uniroyal Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026 (CIT 1982). Assembly operations that are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. See C.S.D. 80-111, C.S.D. 85-25, and C.S.D. 90-97.

The initial question we must address in regard to the eligibility of the imported flash charger assemblies for subheading 9801.00.10, HTSUS, treatment is whether the single-use cameras exported to Mexico are considered products of the United States; e.g., whether the foreign-origin camera parts were substantially transformed during the assembly of the cameras in the U.S. As stated earlier, production of the cameras in the United States involves injection molding to create certain plastic components and the assembly of 16 different components, 13 of which are stated to be of U.S. origin and the remainder (including the flash charger assembly) of foreign origin.

A factor that Customs and the courts have considered in determining whether assembly operations result in a substantial transformation is the extent to which components involved in the assembly were manufactured in the country of assembly. The Texas Instruments case concerned the eligibility of “cue modules” produced in Taiwan for duty-free treatment under the Generalized System of Preferences (GSP). The cue modules consisted of a flexible circuit board to which were attached three integrated circuits, one photodiode, one capacitor, one resistor, and a jumper wire. The issue considered by the court was whether parts imported into Taiwan to produce the integrated circuits (IC’s) and photodiode were substantially transformed into materials produced in Taiwan within the meaning of 19 CFR 10.177(a). The court concluded that the processing steps used to produce the IC’s and photodiode consisted of manufacturing operations rather than “mere assembly.” For example, the court noted that one operation (wiring silicon chips to connect them to lead frames) “was a manufacturing operation involving a large number of steps (at least on the IC’s) and not a mere joining of two or more parts within the usual meaning of the term ‘assembly.’” Texas Instruments, 681 F.2d at 784.

In United States v. Gibson-Thomsen, Inc., 27 CCPA 26 7 (C.A.D. 98, 1940), the court held that imported wood brush blocks and toothbrush handles which had U.S.-origin bristles inserted into them in the U.S. lost their identity as such and became new articles having a new name, character and use. One of the factors considered by the court in reaching its conclusion was that the bristles used were "by far the most valuable element." Also, the court looked at whether the imported article lost its identity as such when combined with other articles. The court concluded that the wood handles were mere materials to be used in the manufacture of toothbrushes and hairbrushes in the U.S.

In HQ 732940, dated July 5, 1990, Customs considered water pump assemblies consisting of 6-8 components including a casting, bearing, impeller, hub, seal, mounting gasket, and in some cases, a spacer, and tubes or plugs. The casting and bearing were the most costly components. Although the assembly process performed in the U.S. was not exceedingly complex, and in one instance a Taiwanese-origin casting was used to produce the water pump, a substantial transformation was found. In support of this finding, the ruling stated that the casting was only one of several important components of the water pump and that the others (bearing, impeller, hub and seal) were all manufactured in the U.S.

In HQ 558919, dated March 20, 1995, Customs held that an extruder subassembly manufactured in England was substantially transformed in the United States when it was wired and combined with U.S. components (motor, electrical controls and extruder screw) to create a vertical extruder. In HQ 559887, dated October 3, 1996, Customs held that swivel joints and torsion spring balance assemblies from India were substantially transformed when assembled in the U.S. with U.S.-origin components to produce top and bottom loading/unloading arms (petroleum handling equipment). Therefore, the loading arms were considered products of the United States.

In this case, the assembly process performed in the U.S. does not appear to be exceedingly complex. However, considering that most of the camera components were manufactured in the U.S., including the plastic body and lens components, it is our opinion that the production of the cameras in the U.S. is “complex and meaningful.” It is noted that none of the three imported foreign components comprises the essential character of the finished single-use camera. As a result of the manufacturing and assembly operations performed in the U.S., each of the individual parts and components loses its separate identity and becomes a new and different article of commerce (the finished camera) having a new name, character and use. Therefore, we find that the imported foreign-origin components are substantially transformed in the U.S. and that the resulting single-use cameras are considered products of the U.S.

The next issue to be considered is whether removing the flash charger assemblies from the cameras in Mexico and returning those that are capable of being re-used to the U.S. result in a change in the origin of the flash assemblies or constitute an advancement in value or improvement in condition of the assemblies. HQ 561541 dated March 14, 2000, is pertinent in this regard. In that case, alternators and starters were manufactured in the U.S. and installed into automobiles in the U.S. The U.S.-made automobiles were subsequently used in Canada. When the alternators or starters ceased to function properly, they were removed from the automobiles in Canada and shipped to the U.S. for repair. In holding that the imported used alternators and starters were entitled to free entry under subheading 9801.00.10, HTSUS, Customs stated the following:

Removing the alternators and starters from the vehicles in Canada will result in a change in their condition because they are no longer attached to the vehicle. However, in our opinion, the mere removal of the alternators and the starters from the cars without any additional processing does not result in an advancement in their value or an improvement in their condition. Therefore, assuming that no processing will be performed on the alternators and starters in Canada other than removing them from the automobiles, and it is established that the alternators and starters were produced in the U.S., they will be eligible for the duty exemption under subheading 9801.00.10, HTSUS, upon their return to the U.S.

In contrast to the facts in HRL 561541, the returned articles in the instant case (the flash charger assemblies) were not originally manufactured in the U.S. However, we do not believe that this distinction dictates a contrary result to that reached in HRL 561541. This conclusion is supported by HQ 559703 dated August 23, 1996, a country of origin marking case which is factually similar to the instant case. In HQ 559703, aircraft engines were assembled in the U.S. or another country from thousands of individual parts sourced from vendors in the U.S. and/or other countries. Assembled engines in need of repair or routine service were sent to a facility abroad where they were disassembled. Those engine parts that could not be repaired or replaced by the foreign repair facility were returned to the U.S. or the other country of manufacture of the engine. The issue presented concerned the proper country of origin of these engine parts that were imported into the U.S.

Customs first determined in HQ 559703 that the operations performed in the U.S. or abroad leading to the production of the aircraft engines resulted in a substantial transformation of the parts that were imported into the country of production. Therefore, we stated that the country of origin of the imported parts was the country where the engine was produced. Secondly, we concluded that the subsequent disassembly of the engines abroad did not result in a change in the country of origin of the parts as the parts did not undergo a change in character or use as a result of the disassembly. Thus, it was held that “...since these parts do not undergo a substantial transformation as a result of such disassembly, the country of origin of such parts remains the country where the engine was produced....”

We believe that the same conclusion is required in the instant case. As stated previously, the imported foreign camera components are substantially transformed into products of the U.S. when used in the production of the single-use cameras in the U.S. Moreover, consistent with HQ 559703, removing a component (that was originally made abroad) from a U.S.-origin camera in Mexico does not cause that part to lose its U.S. origin and revert back to its original country of manufacture. Finally, as we stated in HRL 561541, removing a part from an article without any additional processing does not result in an advancement in value or improvement in condition of the part, within the meaning of subheading 9801.00.10, HTSUS. Therefore, we conclude that the imported flash charger assemblies are entitled to duty-free treatment under subheading 9801.00.10, HTSUS, assuming compliance with the documentation requirements of section 10.1, Customs Regulations (19 CFR §10.1).

In regard to shipments valued over $2,000 and claimed to be entitled to subheading 9801.00.10 treatment, section 10.1(a) requires the filing of a declaration by the foreign shipper and a declaration by the owner, importer, consignee or agent. According to 19 CFR §10.1(d), if the port director is reasonably satisfied, based on the nature of the articles or production of other evidence, that the articles were imported in circumstances meeting the requirements of subheading 9801.00.10, HTSUS, the port director may waive the requirements of producing the documents specified above.

The flash charger assemblies subject to this protest were originally entered under subheading 9801.00.10, HTSUS. However, the record does not reflect that the two declarations required by section 10.1(a) were filed in connection with the subject entries or that their production was waived by your office. However, section 10.112, Customs Regulations (19 CFR §10.112), provides, in pertinent part, that “[w]henever a free entry...document...is not filed at the time of the entry..., but failure to file it was not due to willful negligence or fraudulent intent, such document...may be filed at any time...before the liquidation becomes final.” Accordingly, should your office decide not to waive production of the declarations required by 19 CFR §10.1(a), please provide protestant with a reasonable period of time to produce these documents.

HOLDING:

The merchandise subject to this protest is properly classified in subheading 9006.91.00, HTSUS, which provides for “Photographic (other than cinematographic) cameras; photographic flashlight apparatus and flashbulbs other than discharge lamps of heading 8539; parts and accessories thereof: parts and accessories: for cameras.”

As the initial claim for NAFTA preferential treatment for the merchandise subject to this protest was not made either at the time of importation or within one year thereafter, the merchandise is ineligible for preferential tariff treatment under the NAFTA.

However, for the reasons set forth above, the subject merchandise is entitled to duty-free treatment under subheading 9801.00.10, HTSUS, assuming compliance with the documentation requirements of 19 CFR 10.1.

The protest should be disposed of consistent with the foregoing.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter.

Sixty days from the date of the decision the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director
Commercial Rulings Division


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See also:

• Tariff No.: 9006.61.00 - Photographic discharge lamp ("electronic") flashlight apparatus
• Tariff No.: 9006.62.00 - Photographic flashbulbs, flashcubes and the like
• Tariff No.: 9006.69.00 - Photographic flashlight apparatus, nesi
• Tariff No.: 9006.91.00 - Parts and accessories for photographic cameras, not cinematographic
• Tariff No.: 9801.00.10 - U.S. goods returned without having been advanced in value or improved in condition while abroad