HQ H018469 - Eligibility for UAFTA Preference for imported control systems - United States International Trade Commision Rulings

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HQ H018469

November 2, 2007

CLA-2 RR:CTF:VS H018469 KSG

CATEGORY: CLASSIFICATION

Brett Greedy
5 International Square
Trade Park
P.O. Box 1026
Tullamarine VIC 3043
Australia

RE: Eligibility for UAFTA Preference for imported control systems

Dear Mr. Greedy:

This is in response to your letter dated October 1, 2007, requesting a binding ruling on behalf of Aussie Imports US, LLC (“Aussie”), as to whether certain imported control systems would qualify for preferential tariff treatment under the United States-Australia Free Trade Agreement (“UAFTA”).

FACTS:

You state that the good being imported into the U.S. is manufactured by Dyno Dynamics Pty Ltd. in Australia and is a control system for dynamometers. You also state that the imported good is classified in subheading 9031.80 of the Harmonized Tariff System of the United States (“HTSUS”). All the materials are sourced within Australia except the “retarder”, which is imported from Germany.

You also attached a copy of the Bill of Materials, which lists all the materials and the tariff classification of the materials. None of these materials are classified in heading 9031, HTSUS.

ISSUE:

Whether the imported good described above is eligible for preferential tariff treatment under the U.S.- Australia FTA.

LAW AND ANALYSIS:

The U.S.-Australia Free Trade Agreement was signed on May 18, 2004, and entered into force on January 1, 2005, as approved and implemented by the UAFTA Implementation Act, Pub. L. 108-286, 118 Stat. 919 (August 3, 2004).

Section 203(b) of the United States-Australia Free Trade Agreement Implementation Act (General Note 28, HTSUS) provides, in pertinent part:

For purposes of this Act and purposes of implementing the preferential treatment provided for under the Agreement, a good is an originating good if -
the good is a good wholly obtained or produced entirely in the territory of Australia, the United States, or both;
is produced entirely in the territory of Australia, the United States, or both, and –

(i) each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in Annex 4-A or Annex 5-A of the Agreement.

You state that one of the materials is manufactured in Germany and therefore, a nonoriginating material. Therefore, the imported good would not be considered “wholly obtained.” We note that you stated that all the other materials are “sourced locally within Australia.” A material is determined to be originating or nonoriginating depending on where the material is produced. We have no information regarding where the other materials were produced.

Therefore, we must determine whether the imported good would satisfy Article 203(b)(2) when imported into the U.S. You state that the imported good would be classified in subheading 9031.80, HTSUS. The rule set forth in GN 28(n) for subheading 9031.80 is:

A change to subheadings 9031.10 through 9031.80 from any other heading; or A change to coordinate measuring machines of subheading 9031.49 from any other product except from bases and frames for the goods of the same subheading; or A change to subheadings 9031.10 through 9031.80 from any other subheading, provided that there is a regional value content of not less than 35 percent based on the build-up method or 45 percent based on the build-down method.

In your submission, the only material that is identified as nonoriginating is the “retarder”, which is imported from Germany. In the Bill of Materials, you state that the retarder cable assembly is classified in heading 8544. For the purposes of this ruling, we assume that these classifications are correct and that the retarder and the retarder cable assembly are the same material. Based on the above, the imported good would satisfy the tariff shift rule set forth in GN 28(n) by undergoing the required heading change. Further, if any other materials listed in the Bill of Materials are nonoriginating, they would also satisfy the tariff shift rule since there are no materials listed that are classified in Heading 9031, HTSUS. If all the information provided, including the tariff classifications is correct, the imported good would be considered originating under the U.S.-Australia Free Trade Agreement if imported directly into the United States.

HOLDING:

Based on the information presented in your submission, described above, the imported good would be considered an originating good under the U.S.-Australia Free Trade Agreement when imported directly into the U.S.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs official handling the transaction.

Sincerely,

Monika R. Brenner
Chief, Valuation & Special Programs Branch

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