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NY N024817




March 27, 2008

CLA-2-84:OT:RR:NC:1:120

CATEGORY: CLASSIFICATION

TARIFF NO.: 8404.20.00

Mr. Jonathan M. Fee
Alston & Bird LLP
950 F Street, NW
Washington, DC 20004-1404

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of finned tube bundles exported to Mexico; Article 509

Dear Mr. Fee:

In your letter dated March 12, 2008 you requested a ruling on the status of unassembled finned tube bundles produced in the United States, imported from France and exported to Mexico under the NAFTA. The submitted sample is being retained by this office.

One thousand stainless steel, U-bent finned tubes are packaged bundled together and exported to Mexico. In Mexico, the tubes are precisely measured and trimmed to fit into one thousand corresponding holes drilled into a metal tubesheet. Once assembled, the tube bundle will form part of a thermal exchange device to be installed in a nuclear reactor in Mexico.

Plain stainless steel tubes classified under Heading 7306, HTSUS, imported from France underwent a finning process in the US, which increased the surface area inside and outside of the tube to improve the heat transfer characteristics of the product. The fins were cold formed out of the base tube via proprietary tooling, with no metal added or removed in the process. The finned tubes were then washed and tested using an eddy current tester with an encircling coil to test the entire cross section of the tube. The tube was heated to undergo a U-shape bending process in accordance with the radii schedule defined by the user. The tubes were checked for bend and radius precision before being cut to length and finished. An entire bundle was shipped to Mexico to be fitted onto a metal tubesheet.

Based on the manufacturing process performed in the United States and per the exclusions set forth under the guidance of the Explanatory Notes to Heading 7306 (f), these tubes are specific, identifiable articles (parts of machinery in Section XVI). Although unassembled, the finned tube bundles perform the specific function of steam condensers, reducing a gas to a liquid, and are recognizable as such, thus they should be classified as incomplete or unfinished condensers as per GRI 2(a).

The applicable tariff provision for the finned tube bundles will be 8404.20.00, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Condensers for steam or other vapor power units.” The general rate of duty will be 5.6%.

Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.

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

The steel finned tube bundles undergo a change through production from Heading 7306 to subheading 8404.20.00 and satisfy the tariff shift requirements of GN 12 (t).   Based on the facts provided, the goods described above qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(t). The goods will therefore be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.

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 Denise Faingar at 646-733-3010.

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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