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NY N024841




April 11, 2008

CLA-2-87:OT:RR:NC:N1:101

CATEGORY: CLASSIFICATION

TARIFF NO.: 8408.20.9000; 8708.40.5000; 8708.50.6500; 8708.99.6890; 8707.90.5020

Robert G. Gaydo, Senior Trade Advisor
Deringer Logistics Consulting Group
6930 Metroplex Drive
Romulus, MI 48174-2000

RE: The tariff classification and North American Free Trade Agreement (NAFTA) status of motor vehicle parts from Canada

Dear Mr. Gaydo:

In your letter dated March 10, 2008 you requested a ruling on behalf of Gamex, Inc. of St.-Paul-de-L’lle-Aux-Noix, Quebec.

Gamex, Inc. purchases used Road Tractors and disassembles them into parts and, also, purchases used Road Tractor parts from operators of Canadian salvage yards. You state in your Ruling Request that these parts will, mostly, consist of the following -

Used Diesel Engines
Used Transmissions
Used Axles
Used Differentials
Used Road Tractor Cabs

The applicable classification subheading for the Diesel Engines will be 8408.20.9000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Compression-ignition internal combustion piston engines (diesel ): Engines of a kind used for the propulsion of vehicles of chapter 87: Other ”. The rate of duty will be 2.5%.

The applicable classification subheading for the Transmissions will be 8708.40.5000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Parts and accessories of motor vehicles : Gear boxes : Gear boxes: For other vehicles”. The rate of duty will be 2.5%.

The applicable classification subheading for the Axles will be, for non-driving axles, 8708.50.6500, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Parts and accessories of motor vehicles : non-driving axles : non-driving axles: For other vehicles: Non-driving axles” and, for drive axles, 8708.99.6890, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Parts and accessories of motor vehicles : Other parts : Other: Other: Other: Other: Other parts for power trains: Other”. The rate of duty for both non-driving and drive axles will be 2.5%.

The applicable classification subheading for the Differentials will be 8708.99.6890, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Parts and accessories of motor vehicles : Other parts : Other: Other: Other: Other: Other parts for power trains: Other”. The rate of duty will be 2.5%.

The applicable classification subheading for the Road Tractor Cabs will be 8707.90.5020, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Bodies (including cabs) for motor vehicles : Other: Other: For [Road tractors for semi-trailers]”. The rate of duty will be 4%.

In your Ruling Request, you propose that the parts, except for the Diesel Engines and Road Tractor Cabs, receive NAFTA preferential tariff treatment on the basis that they will undergo a change in the tariff classification when disassembled from vehicles that are classified in different tariff provisions. In addition, you request NAFTA preferential tariff treatment for the Diesel Engines on a “case by case” basis only if they meet the Regional Value Content requirement.

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 are 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.

Based on the facts provided, the Transmissions, Axles and Differentials described above qualify for NAFTA preferential treatment because they will meet the requirements of HTSUS General Note 12(b). The goods will therefore be entitled to a Free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements including Regional Value Content requirements specified in General Note 12(t).

This ruling letter has not addressed the Regional Value Content (RVC) of the subject goods. If you desire a ruling regarding the RVC of your goods and their eligibility for NAFTA preferential treatment, provide the information noted in Section 181.93(b) of the Customs Regulations (19 CFR 181.93(b) to the Director, International Trade Compliance Division, Headquarters, U.S. Customs and Border Protection, 1300 Pennsylvania Ave. N.W., (Mint Annex), Washington, D.C. 20229 along with a copy of this letter.

This ruling is being issued under the provisions of Parts 177 and 181 of the Customs Regulations (19 C.F.R. 177, 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 Diesel Engines, contact National Import Specialist Mark Palasek at 646-733-3013 and, if you have any questions regarding the Transmissions, Axles, Differentials or Road Tractor Cabs, contact National Import Specialist Richard Laman at 646-733-3017.

Sincerely,

Robert B. Swierupski
Director,

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