May 29, 2009 CBP Bulletin Notice on NAFTA Eligibility and Marking of Certain Automatic Data Processing Systems
In the May 29, 2009 issue of the U.S. Customs and Border Protection Bulletin (Vol. 43, No. 22), CBP published a notice proposing to modify one ruling and revoke a treatment as follows:
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Proposed modification of ruling; proposed revocation of treatment. CBP is proposing to modify one ruling on the NAFTA eligibility and marking of certain automatic data processing systems. Additionally, CBP proposes that this notice covers any rulings on this merchandise that may exist but have not been specifically identified. CBP is also proposing to revoke any treatment it has previously accorded to substantially identical transactions.
CBP states that any party who has received an interpretive ruling or decision on the merchandise that is subject to the proposed modification and revocation, or any party involved with a substantially identical transaction, should advise CBP by June 29, 2009, the date that written comments on the proposed ruling are due. Furthermore, CBP states that an importer's failure to advise CBP of such rulings, decisions, or substantially identical transactions may raise issues of reasonable care on the part of the importer or its agent for importations subsequent to the effective date of the final decision in this notice.
Automatic data processing systems. The merchandise is described as an ADP machine, a keyboard, a mouse, and a monitor packaged together for retail sale. When so packaged, the merchandise is identified by model numbers M9177c and M8307c.
The keyboard, mouse, and monitor are imported into Mexico from various vendors in China, Taiwan, and Malaysia.
The ADP machine is assembled in Mexico from components originating in China, Taiwan, and Malaysia. The following assembly operations occur in Mexico:
- Chassis installations: rear I/O shield; system fan; power supply; PCA (printed circuit assembly) components such as the processor cooler back plate, retention module, memory module, Intel processor, heatsink, Bluetooth, front I/O shield, and PCA cabling; Expansion cards, such as a video card, modem card, TV tuner card, wire/wireless card and LED, or an audio card, as requested; optical drive; hard drive; Bluejay module (video and imaging card); bezel subassembly.
- Final assembly: front bezel installation, connector cover installation, cable routing and side access panel installation.
- Equipment testing.
- Software installation.
All of the above stated operations are performed by skilled and trained workers.
CBP is proposing to issue HQ H037540 in order to modify HQ H027696. CBP is proposing to modify only that portion of the ruling relating to NAFTA eligibility and country of origin marking.
In HQ 027696, CBP properly determined that the merchandise met the terms of an ADP system as defined by Subheading Note 1 to Chapter 84 and was correctly classified in HTS 8471.49.00. The merchandise also qualifies as an originating good under NAFTA for duty purposes.
As the goods meet the terms of "ADP systems" as defined in Subheading Note 1 to Chapter 84, CBP finds that they constitute a GRI 1 set under the Harmonized System for the purposes of 19 CFR 102.11.
Therefore, CBP proposes that according to 19 CFR 102.11(c), all of the components which make-up the ADP system are essential as they work together to perform the ADP system's function, and all merit equal consideration for marking purposes. As a result, the NAFTA rules require each of the components to be individually marked with their own country of origin. This decision is consistent with a previous CBP ruling in which CBP held that a set consisting of a computer, keyboard, mouse, speakers and microphone merit equal consideration for marking purposes and must be individually marked. See HQ 561409, dated May 30, 2000.
In addition, because General Note 12(u) lists ADP systems of 8471.49.00 as being deemed to originate in a NAFTA country for purposes of origin, the subject merchandise qualifies under 19 USC 58c(b)(10)(B)(ii) as being exempt from the merchandise processing fee (MPF).
CBP now proposes that by application of GRI 1, the ADP system is classified in subheading 8471.49.00 which provides for: "Automatic data processing machines and units thereof . . .: Other automatic data processing machines: Other, entered in the form of systems." In accordance with General Note 12(b)(v), the ADP system originates from Mexico under NAFTA, but in accordance with 102.11(c), each component must be individually marked with its own country of origin, including the ADP machine, which has a country of origin of Mexico. Under 19 USC 58c(b)(10)(B)(ii), the ADP system imported from Mexico qualifies for exemption from the MPF fee.
May 29, 2009 CBP Bulletin (Vol. 43, No. 22) available athttp://www.cbp.gov/xp/cgov/trade/legal/bulletins_decisions/bulletins_2009/