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HQ H025405




April 28, 2008

CLA-2 OT:RR:CTF:VS H025405 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 27, 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 identified as “Part Number: 114378, R453ABCD REPAIR KIT.” The kit is intended to be used in repairing a WM453 series Pneumatic Throttle Pedal. The throttle pedal for which this kit is designed is of a type commonly used for off-highway applications, i.e., construction or mining vehicles. The repair kit is used in the repair of the pedal and the regulating valve subassembly from the WM90 series which is incorporated in WM453 series Pneumatic Throttle Pedals. Components of both the WM453 and WM90 are included in the kit. The kit is composed of several items which originate in the United States, China, Taiwan and Italy. The items are packaged in China to form the kit which consists of the following items:

From the United States

2 Poppets
1 Compression Spring
1 Boot
1 Torsion Spring
4 Bushings
2 U-Cups
4 Seal Washers

From China

Piston Thrust Ring
Treadle Pins
Roller

From Taiwan

Snap Rings
O-Rings

From Italy

O-Ring

You have requested the classification of the imported repair kit and its country of origin. You also have inquired as to whether the repair kit qualifies for NAFTA preferential duty treatment if exported to Canada or Mexico after it is imported into the United States.

ISSUE:

What is the classification and country of origin of the subject throttle pedal repair kit?

Does the subject throttle pedal repair kit qualify for preferential duty treatment under NAFTA if exported to Canada or Mexico after it is imported into the United States?

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 pins and roller 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. The poppets and piston thrust ring are classifiable in heading 8481, HTSUS, as parts of valves. The compression spring and torsion spring are classifiable in heading 7320, HTSUS, as springs of iron or steel. The boot, O-rings and the U-cups are classifiable in heading 4016, HTSUS, as articles of vulcanized rubber (other than hard rubber) not specifically provided for. And finally, the seal washers are classifiable in heading 3926, HTSUS, as “[o]ther articles of plastics and articles of other materials of headings 3901 to 3914.” Therefore, the repair kit cannot be classified under GRI 1 as no one heading describes the entire kit.

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 and regulating valve subassembly and it consists of numerous parts. Considering the variety of parts, none stands out due to its role, value or for any other reason. Therefore, we agree with you that classification under GRI 3(c), i.e., classifying by the heading which appears last in the tariff of the headings which equally merit consideration, is proper. Therefore, the repair kit is classified in heading 8708, HTSUS. It is specifically classified 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.”

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 China 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 pins, piston thrust ring, roller, snap rings and O-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. However, we note that the good at issue is the repair kit which is imported from China. As such, it is not a good originating in a NAFTA country under General Note 12 of the HTSUS.

HOLDING:

The throttle pedal repair kit, Part Number: 114378, R453ABCD REPAIR KIT, 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.”

For marking purposes under 19 U.S.C. § 1304, each article of foreign origin, i.e., the treadle pins, piston thrust ring, roller, snap rings and O-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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