Automobile air conditioning hose assembly; NY 864791; NAFTA; Article 509; general notes 12(b)(iii)

HQ 956700 October 24, 1994 CLA-2 CO:R:C:M 956700 LTO CATEGORY: Classification TARIFF NO.: 8415.90.80 Mr. Alfonso A. Campbell P.O. Box 440014 Laredo, Texas 78044-0014 RE: Automobile air conditioning hose assembly; NY 864791; NAFTA; Article 509; general notes 12(b)(iii) Dear Mr. Campbell: This is in response to your letter of June 27, 1994, on behalf of Parker Hannifan, Inc., concerning the applicability of the North American Free Trade Agreement (NAFTA) and classification of an automobile air conditioning hose assembly under the Harmonized Tariff Schedule of the United States (HTSUS). FACTS: The article in question is an automobile air conditioning hose assembly. You state that the assembly's sole use is as a part of an automobile air conditioning system. You also state that the assembly is made exclusively of U.S. materials. These materials are shipped to Mexico, where they are assembled into the article in question. ISSUE: 1. Whether the automobile air conditioning hose assembly is classifiable as a part of an air conditioning machine under subheading 8415.90.80, HTSUS. 2. Whether the automobile air conditioning hose assembly is eligible for duty-free treatment under the NAFTA. - 2 - LAW AND ANALYSIS: The General Rules of Interpretation (GRI's) to the HTSUS govern the classification of goods in the tariff schedule. GRI 1 states in pertinent part that "for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes . . . ." In NY 864791, dated July 25, 1991, an automobile air conditioning hose was held to be classifiable under subheading 8415.90.00 (now, 8415.90.80), HTSUS, which provides for other parts of air conditioning machines. The assembly in question is similar to the hose described in NY 864791, except that the assembly in question also incorporates muffler components used to reduce vibration noise. The assembly, like the hose, is an identifiable part of an automotive air conditioner, and is therefore classifiable under subheading 8415.90.80, HTSUS. You have also inquired whether the air conditioning hose assembly is eligible for duty-free treatment under the NAFTA. To be eligible for tariff preferences under the NAFTA, goods must be "originating goods" within the rules of origin in general note 12(b), HTSUS. General note 12(b)(iii), HTSUS, states: [f]or 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 -- (iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials . . . You state that the air conditioning hose assembly is produced entirely in Mexico and the U.S. exclusively from originating materials. Thus, the assembly is an originating good, and is eligible for preferential treatment under the NAFTA. HOLDING: The automobile air conditioning assembly is classifiable under subheading 8415.90.80, HTSUS, which provides for other parts of air conditioning machines. The assembly is eligible for preferential treatment under the NAFTA. The column 1 (Special) (MX) rate of duty for articles of this subheading is free. Sincerely, John Durant, Director