HQ 086510: United States-Canada Free-Trade Agreement; Hot water kettlepower supply cords with third country components; Originatinggoods

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 086510

                          September 19, 1990

CLA-2 CO:R:C:G  086510 MBR

CATEGORY:  Classification

TARIFF NO.:  8516

Frank M. Murphy
John V. Carr & Son, Inc.
P.O. Box 33479
Detroit, Michigan 48232-5479

RE: United States-Canada Free-Trade Agreement; Hot water kettle
power supply cords with third country components; Originating
goods

Dear Mr. Murphy:

     This is in reply to your letters of December 6, 1989 and
February 1, 1990, on behalf of NOMA Industrial Cords Co. of
Scarborough, Ontario, requesting origin status, under the United
States-Canada Free-Trade Agreement (FTA), of hot water kettle
power supply cords containing U.S., Canadian and third country
components.

FACTS:

     You represent that all materials used in the manufacture of
the power supply cords are entirely of U.S. or Canadian origin
except: 1) a resistor used to regulate amperage in the indicator
light bulb, and 2) certain stabilizers used in the molding
compound used in the manufacture of the PVC plugs.

ISSUE:

     Does the completed power supply assembly qualify for the
benefits of the FTA as an originating good?

LAW AND ANALYSIS:

     The FTA rules for determining whether goods, when imported
into the United States, are originating in the territory of
Canada are set forth in General Note 3(c)(vii), Harmonized Tariff
Schedule of the United States Annotated (HTSUSA).

  General Note 3(c)(vii)(B) states:

     (B) For the purposes of subdivision (c)(vii) of this note,
     goods imported into the customs territory of the United
     States are eligible for treatment as "goods originating in
     the territory of Canada" only if--

          (1) they are goods wholly obtained or produced in the
          territory of Canada and/or the United States, or

          (2) they have been transformed in the territory of
          Canada and/or United States, so as to be subject--

               (I) to a change in tariff classification as
               described in the rules of subdivision (c)(vii)(R)
               of this note, or

               (II) to such other requirements subdivision
               (c)(vii)(R) of this note may provide when no
               change in tariff classification occurs, and they
               meet the other conditions set out in subdivisions
               (c)(vii)(F), (G), (H), (I), (J), and (R) of this
               note.

     The power supply cords at issue are not "goods wholly
obtained or produced in the territory of Canada and/or the United
States," as required by General Note 3(c)(vii)(B)(1), because of
the use of third country components (molding compound stabilizers
and a resistor).  The definition of goods "wholly obtained or
produced" is enumerated in General Note 3(c)(vii)(L), which
states:

     (L) As used in subdivision (c)(vii)(B) of this note, the
     phrase "goods wholly obtained or produced in the territory
     of Canada and/or the United States" means-- (1) mineral
     goods extracted in the territory of Canada and/or the United
     States, (2) goods harvested..., (3) live animals..., (4)
     fish..., (5) goods produced on factory ships..., (6) goods
     taken...from seabed..., (7) goods taken from space..., (8)
     waste and scrap derived from manufacturing..., (9) goods
     produced in the territory of Canada and/or the United States
     exclusively from goods referred to in subparagraphs (1) to
     (8), inclusive, or from their derivatives, at any stage of
     production.

     Therefore, the question arises whether the goods have been
transformed in the territory of Canada and/or the United States,
so as to be subject to a change in tariff classification, as
required by General Note 3(c)(vii)(B)(2)(I).  The resistors are
first imported into the U.S. and are classifiable under
subheading 8533.10.00, HTSUSA, which provides for fixed carbon
resistors.  The final bulb assembly is exported to Canada under
subheading 8531, HTS, which provides for electric sound or visual
signaling apparatus.  General Note 3(c)(vii)(R) provides for the
requisite change in tariff classification rules.  Paragraph (16)
provides for changes in classification required for Section XVI:
Chapters 84 through 85.  Rule (bb) requires: "A change from one
heading (other than a parts heading) to another heading, other
than heading 8528 or 8529."  The change in classification from
heading 8533 (not a parts heading) to heading 8531 meets this
requirement.

     Stabilizers of rubber or plastics are imported into Canada
under 3812.30, HTS, from a third country.  The final assembly
would be imported under 8516, HTSUSA, which provides for:
"electric instantaneous or storage water heaters and immersion
heaters; other electrothermic appliances of a kind used for
domestic purposes; parts thereof."  General Note 3(c)(vii)(R),
Paragraph 16, Rule (aa) requires: "[a] change from one chapter to
another, other than a change to heading 8544."  The change in
classification of the stabilizers from chapter 38 to chapter 85
satisfies this requirement of change.  Therefore, under the FTA,
the stabilizers are considered goods of Canadian origin.

     In the instant case, the rules of General Note 3(c)(vii)(B)
and subdivision (c)(vii)(R) are met since the requisite changes
in classification have taken place in Canada or the U.S.

HOLDING:

     The hot water kettle power supply cords at issue are
originating goods of Canada and the United States, for purposes
of the U.S.-Canada FTA, because the components meet the requisite
changes in classification of General Note 3(c)(vii)(R).

                              Sincerely,




                              John Durant, Director
                              Commercial Rulings Division