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HQ H025404




April 28, 2008

CLA-2 OT:RR:CTF:VS H025404 CMR

CATEGORY: CLASSIFICATION

TARIFF NO.: 8708.99.8180

Robert Scott
Williams Controls, Inc.
14100 SW 72nd Avenue
Portland, OR 97224

RE: Classification, country of origin and eligibility for preferential duty treatment under the North American Free Trade Agreement (NAFTA) of a throttle pedal repair kit

Dear Mr. Scott:

This is in response to your letter dated February 26, 2008, requesting a ruling on the classification, country of origin marking and eligibility for preferential duty treatment under the North American Free Trade Agreement (NAFTA) of an automotive repair kit. Your request was referred to this office for a response.

FACTS:

The repair kit at issue is a Volvo Parts Kit, Part Number 130078, and is intended to be used in repairing a WM453M & N series Pneumatic Throttle Pedal. It consists of:

1 Treadle Pin
2 Snap Rings
2 Bushings (flanged)
1 Roller
2 Bushings (non-flanged)
1 Treadle Assembly

The throttle pedal is a type of pedal commonly used in commercial vehicles, i.e. delivery and long haul trucks. The repair kit is used only in the repair of the pedal subassembly and does not involve the regulating valve subassembly which is incorporated in WM453M & N models. The treadle pin and treadle assembly are products of China. The snap rings are products of Taiwan. The remaining items, i.e., the bushings and roller, are products of the United States. The items will be packaged to form the kit in the United States. The kit is sold to domestic original equipment manufacturers and parts distributors. However, you inquire as to whether the kit would qualify for NAFTA if sold to end-users in Canada or Mexico.

As your classification request is regarding the packaged kit which is packaged in the United States, we assume your request is for purposes of export from the United States. General Statistical Note 5 of the Harmonized Tariff Schedule of the United States (HTSUS) provides, in relevant part:

Except as noted below, the statistical reporting numbers for articles classified in chapters 1 through 97 of this schedule may be used in place of comparable Schedule B numbers on the Shipper’s Export Declaration. Statistical reporting numbers for articles covered by chapters 98 and 99 of this schedule may only be used on import entries. . . .

ISSUE:

What is the classification of the subject throttle pedal repair kit under Schedule B for export purposes?

What is the country of origin of the subject throttle pedal repair kit for marking purposes?

Does the subject throttle pedal repair kit qualify for preferential duty treatment under NAFTA?

LAW AND ANALYSIS:

Classification of goods under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is governed by the General Rules of Interpretation (GRIs). GRI 1 provides that "classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to [the remaining GRIs taken in order]."

The throttle pedal repair kit consists of various items which are classifiable in different headings of the HTSUS. The treadle pin, roller and treadle assembly are classifiable in heading 8708, HTSUS, which provides for parts and accessories of motor vehicles, including the types of vehicles in which throttle pedals are used. The snap rings are classifiable as articles similar to screws, bolts, nuts, coach screws, screw hooks, rivets, cotters, cotter pins, and washers (including spring washers) in heading 7318, HTSUS. The bushings are classifiable as plain shaft bearings
in heading 8483, HTSUS. Therefore, the repair kit cannot be classified under GRI 1 as no one heading describes the entire kit.

We note that the treadle pin and treadle assembly, imported into the United States from China, are classified specifically in subheading 8708.99.8180, HTSUS, which provides for “Parts and accessories of motor vehicles of headings 8701 to 8705: Other parts and accessories: Other: . . . Other.” Additionally, the snap rings imported from Taiwan are classified in subheading 7318.29.00, HTSUS, which provides for “Screws, bolts, nuts, coach screws, screw hooks, rivets, cotters, cotter pins, washers (including spring washers) and similar articles, or iron or steel: Non-threaded articles: Other.”

GRI 2 is not applicable in this case as it applies to incomplete or unfinished articles, or unassembled or disassembled articles and mixtures or combinations of materials of substances. GRI 3 provides that when goods are, prima facie, classifiable under two or more headings, they are to be classified in the heading which provides the most specific description unless “the headings refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale. . .” in which case the headings are regarded as equally specific and GRI 3(b) must be considered. See GRI 3(a). In this case, the repair kit consists of various items packaged as a retail set and classifiable in various headings.

With regard to goods put in sets for retail sale which cannot be classified by application of GRI 3(a), GRI 3(b) provides that the set is to be classified as if consisting of the component which gives the set its essential character. A retail set is not necessarily a set for retail sale as intended in GRI 3(b). “Goods put up in sets for retail sale” is defined in the Harmonized Commodity Description and Coding System Explanatory Notes (ENs). In understanding the language of the HTSUS, the ENs may be utilized. Although not dispositive or legally binding, the ENs provide a commentary on the scope of each heading of the HTSUS and are the official interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

To be “goods put up in sets for retail sale” as defined in the Explanatory Note (EN) for GRI 3(b) requires that the set consist of a least two different articles which are classifiable in different headings; that the articles be “put together to meet a particular need or carry out a specific activity”; and, that the articles be “put up in a manner suitable for sale directly to users without repacking[.]” See EN Rule 3(b)(X). The repair kit at issue meets all of these requirements and so is considered to consist of “goods put up in sets for retail sale.” As such, classification of the repair kit is dependent upon the component in the set which gives the set its essential character.

Various factors may be considered in determining a good’s essential character including “. . . the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.” See EN Rule 3(b)(VIII). In this case, the kit is for the repair of the throttle pedal. Of the items in the kit, the treadle assembly is the largest and most costly. It also has the appearance of that part of the pedal which is most recognized as it is the part you press on with your foot. Therefore, the treadle assembly imparts the essential character to the throttle pedal repair kit at issue and the kit is classifiable based on the classification applicable to the treadle assembly, i.e., subheading 8708.99.8180, HTSUS, which provides for “Parts and accessories of motor vehicles of headings 8701 to 8705: Other parts and accessories: Other: . . . Other.”

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit in such a manner as to indicate to an ultimate purchaser in the United States the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. § 1304 was that the ultimate purchaser should be able to know by an inspection of the markings on the imported goods the country of which the good is the product. "The evident purpose is to mark the goods so at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will." United States v. Friedlaender & Co., 27 C.C.P.A. 297 at 302 (1940).

Part 134, Customs and Border Protection (CBP) Regulations (19 C.F.R. 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Section 134.1(b), CBP Regulations (19 C.F.R. 134.1(b)), defines "country of origin" as "the country of manufacture, production, or growth of any article of foreign origin entering the United States. 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" within the meaning of [the marking regulations]. . . ." A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, or use which differs from the original material subjected to the process. U.S. v. Gibson Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments v. United States, 681 F.2d 778, 782 (1982).

Treasury Decision (T.D.) 91-7, published in Volume 25, Customs Bulletin and Decisions, at 6 (January 16, 1991), addressed, among other things, the application of country of origin marking requirements to sets. It was stated therein, at 16:

. . . in most cases, the mere inclusion of an item in a collection will not substantially transform it into an article with a new name, character or use and, therefore, each item must be separately marked with its own country of origin. (Where the marking of the container will reasonably indicate the country of origin to the ultimate purchaser, the container may be marked instead of the individual articles. See 19 U.S.C. 1304(a)(3)(D) and 19 CFR 134.32(d)). This result is consistent with the purpose of the marking statute since the ultimate purchaser’s decision as to whether to buy the set might be influenced by the country of origin of any of the items in the set, whether or not an item gives the set its essential character.

Following T.D. 91-7, the mere packaging of the various components of the repair kit in the United States does not substantially transform the individual components and so the origin of each foreign component in the repair kit must be identified. Therefore, the items of foreign origin, i.e., the treadle assembly, the treadle pin and the snap rings, either must be individually marked with their origin, provided such marking is visible through the retail packaging, or the packaging must identify the origin of each of these items.

With regard to your request for a determination on the NAFTA eligibility of the throttle pedal repair kit for purposes of exportation to Canada or Mexico, CBP is unable to issue a ruling to you. Advance ruling procedures for NAFTA rulings are set forth in 19 CFR 181, Subpart I. Section 181.92(b)(5) defines who may request an advance ruling and U.S. exporters and U.S. producers do not fall within the definition. See Headquarters Ruling Letter (HQ) 562654, dated January 31, 2001, and HQ 957189, dated January 11, 1995. If exporting to Canada or Mexico you may request an advance NAFTA ruling from either country. Information for submitting a request to Canada may be found on the Canada Border Services Agency web site at http://www.cbsa-asfc.gc.ca/publications/dm-md/d11/d11-4-16-eng.html. Requests for advance NAFTA rulings from Mexico may be addressed to:

Direccion General
Juricida
Avenida Hidalgo #77
Modulo 1, tercer Piso
Colonia Guerrero
Mexico, D.F. C.P. 06300

HOLDING:

For Schedule B purposes, the HTSUS classification for the throttle pedal repair kit may be used. Under the HTSUS, the throttle pedal repair kit, Part Number 130078, is classified in subheading 8708.99.8180, HTSUS, which provides for “Parts and accessories of the motor vehicles of headings 8701 to 8705: Other parts and accessories: Other: Other: Other: Other: Other, Other.” We note that under Schedule B, available at http://www.census.gov/foreign-trade/schedules/b/index.html, the appropriate number would be subheading 8708.99.8175, Schedule B, which provides for “Parts and accessories of the motor vehicles of headings 8701 to 8705: Other parts and accessories: Other: Other: Other.”

For marking purposes under 19 U.S.C. § 1304, each article of foreign origin, i.e., the treadle assembly, the treadle pin, and the snap rings, must be marked to identify their country of origin. If the marking would not be visible through the retail packaging, then the retail packaging must be marked to identify the origin of the these articles.

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 CBP officer handling the transaction

Sincerely,

Monika R. Brenner, Chief
Valuation & Special Programs Branch


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