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NY R01965




June 10, 2005

CLA-2-90:RR:NC:N1:105 NY R01965

CATEGORY: CLASSIFICATION

TARIFF NO.: 9018.19.9560

Mr. Alex Romero
A.F. Romero Co., Inc.
1749 Stergios Road
Calexico, CA 92231

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of Oxygen Sensors from Mexico; Article 509

Dear Mr. Romero:

In your letter dated May 10, 2005 you requested a ruling on the status of oxygen sensors from Mexico under the NAFTA. Your letter was on behalf of Masimo Corporation. No sample was submitted.

As part of your letter, you state:

“We believe the oximeter sensor with cable is under the heading of electro-diagnostic apparatus under 9018.19. However, is the oximeter sensor with cable classified as a ‘part or accessory’ under 9018.19.9560, or is it an ‘apparatus’ under 9018.95.9555? The difference is critical, as will be explained below.

The sensor is in a clip that is attached to the finger of the patient. The clip houses the sensor. The clip is part of the finished good and is also assembled in Mexico and incorporated in the finished good. The clip is made of plastic. Masimo uses molded plastic components made in China in assembling the clip. The classification of the plastic molded components is also critical. Since these are molded to specifications, the plastic molded components cannot be used in any other application.

The NAFTA Rule of origin for 9018.19, found under General Note 12(t) of the HTSUS, calls for ‘a change from any other heading’. It offers only the tariff shift rule, it does not offer the alternative of qualifying for NAFTA under the Regional Value Content alternative.

Therefore if the plastic molded components are themselves classified under 9018.19.9560 as ‘parts of electro-diagnostic apparatus’, they will not meet the tariff-shift rule of 9018.19. Since their cost ranges from 10% to 15% of total cost, they also exceed the De Minimis alternative. Since the rule of origin does not offer the Regional Value Content requirement, it appears the finished product would not qualify for NAFTA, if the oximeter sensor with cable is classified under 9018.19.9555 or 9560, and the plastic molded components are also classified under 9018.19.9560.

On the other hand, if the plastic molded components are classified under 3926.90, they will meet the tariff-shift requirement of the NAFTA rule of origin, and the finished good will qualify for NAFTA.

Alternatively, General Note 12(t)(iv)(B), states that a good qualifies as NAFTA if the good is ‘produced entirely in Mexico’ but one or more of the non-originating materials falling under the provisions under ‘parts’ and used in the production of the good does not undergo a change in tariff classification because.

(B)..the subheading for such goods provide for and specifically describe both the hoods themselves and their parts,
and provided further that the regional value content is not less than 50% where the net cost method is used.”

Per our telephone call to you, you meant General Note 12**(b)**(iv) (B), and we assume you mean 9018.19.955**0**.

We agree that the complete system of oxygen sensor(s) for the patient’s finger and the apparatus to evaluate and display the electrical signals it transmits to it is classified in 9018.19.95.

Regarding the finger oximeter sensor, both reusable and disposable versions are shown on the Masimo website that you refer to. It is clear from their characteristics, it would be clear to an expert in the field of electro-diagnostic apparatus that they would be identifiable as suitable for use only in patient blood oxygen level measurement systems. See Harmonized System General Explanatory Note III to Chapter 90.

The applicable tariff provision for the finger oximeter sensor will be 9018.19.9560, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for “other” parts and accessories of Electro-diagnostic apparatus. The general rate of duty will be free.

General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. General Note 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that

For 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), (s) and (t) of this note or the rules set forth therein, or

(B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or

(iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or

(iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the nonoriginating materials falling under provisions for "parts" and used in the production of such goods does not undergo a change in tariff classification because--

(A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or

(B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts,
provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note.

The plastic molded components, as separate importations, are classified in 9018.19.9560 as Parts. Since they are molded and, from the illustration, appear to need to have precise measurements to match other pieces, we assume that there is an engineering drawing supplied by the maker of the complete system that was followed in its making. See HRL 965546, 8-6-02. Therefore, they do not make the tariff shift required by HTS General Note 12 – t - Chapter 90 - 43.

Therefore, since both the molded plastic parts and the finger oximeter sensors which incorporate them are classified as parts, the exception in HTS General Note 12 – b – iv – B does not apply. You refer in your letter to CR 181 Appendix, Section 4 – 4 – b. Also see HRL 545974, 5-4-95.

The merchandise does not qualify for preferential treatment under the NAFTA because none of the above requirements are met.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 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 J. Sheridan at 646-733-3012.

Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs and Border Protection, 1300 Pennsylvania Ave. N.W., (Mint Annex), Washington, D.C. 20229.

Sincerely,

Robert B. Swierupski
Director,

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