Feb 10, 2010 CBP Bulletin Notice on NAFTA Eligibility, Marking of ADP Systems
In the February 10, 2010 issue of the U.S. Customs and Border Protection Bulletin and Decisions (Vol. 44, No. 7), CBP published a notice of modification of one ruling and associated revocation of treatment as follows:
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Modification of ruling; revocation of treatment. CBP is modifying one ruling concerning the NAFTA eligibility and marking of certain automatic data processing systems; in addition, this notice covers any rulings on this merchandise that may exist but have not been specifically identified. CBP is also revoking any treatment it has previously accorded to substantially identical transactions.
According to CBP, this action is effective for merchandise entered or withdrawn from warehouse for consumption on or after April 12, 2010.
Automatic data processing systems. The merchandise at issue is described as an ADP machine, a keyboard, a mouse, and a monitor, all imported from Mexico, and packaged together for retail sale. The keyboard and the mouse are imported into Mexico from various vendors in China, Taiwan and Malaysia, and the monitor is imported into Mexico from Taiwan.
The ADP machine is assembled in Mexico by skilled and trained workers from components originating in China, Taiwan, and Malaysia. The ADP's motherboard is shipped to Mexico in a box with all its components except for the memory (a BIOS ROM chip) and the central processing unit. All the ADP machines use Windows Vista as their operating system and all the models perform data processing functions.
CBP is issuing HQ H074136 in order to modify HQ H027696, to reflect NAFTA eligibility and country of origin marking for certain automatic data processing systems.
Eligibility for NAFTA Preferential Treatment: The ADP system as defined in Subheading Note 1 to Chapter 84 correctly classified in subheading 8471.49.00, based on HTS General Note 12 (u) (NAFTA rules), which states that ADP machines, ADP processing units and parts of the foregoing that are classified in the enumerated listing (which includes HTSUS 8471.49.00, ADP machines), are deemed to be originating goods when imported into the U.S. from Mexico. Therefore, CBP determined the ADP system assembled in Mexico from components from various countries is eligible for NAFTA Preferential Treatment.
Marking for Country of Origin Purposes: CBP determined that 19 C.F.R. 102.11 (a) (General Rules of Origin), is not applicable. Specifically, paragraphs (a) 1 and (a) 2 are not applicable, because the ADP system is not either wholly obtained or produced in any one country or produced exclusively from domestic materials of any one country. Paragraph a (3) (the "tariff shift" rules) is not applicable because the foreign goods (e.g. the monitor, keyboard and mouse) are simply re-packed with the ADP machine which is a non-qualifying operation under 19 CFR 102.17.
Since this ADP System meets the terms of a ADP system as defined in Subheading 1 to Chapter 84, CBP finds that the system constitutes a GRI 1 set in the HTS under 19 CFR 102.11. Therefore, CBP finds 19 CFR 102.11(b) is also not applicable.
In the cases where 102.11(a) and (b) do not apply, 19 CFR 102.19 (the NAFTA preference override) may be considered. In this case, the system is considered to qualify for NAFTA under General Note 12 and originating within the meaning of 19 CFR 181.1(q).
Therefore, since the system was assembled and packaged in Mexico, which is the last NAFTA country in which the ADP system underwent production other than minor processing, the ADP system, based on the NAFTA override, can be marked as a product of Mexico, provided the importer presents a NAFTA Certificate of Origin pursuant to 19 CFR 181.11.
New: NAFTA eligible, duty free and marked made in Mexico; Previous: Duty Free, but not NAFTA eligible and marked with various countries of origin
(See ITT's Online Archives or 12/22/09 news, 09122250, for BP summary of proposed HQ H074136.)
February 10, 2010 CBP Bulletin (Vol. 44, No. 7) available at http://www.cbp.gov/linkhandler/cgov/trade/legal/bulletins_decisions/bulletins_2010/Vol.%2044%20February%2010,%202010,%20No.%2007/44genno07.ctt/44genno07.pdf