Electrostatic Photocopiers; Chapter 90, Additional U.S. Note5; General Notes 12(b), 12(t)/90.CR3, 12(t)/90.21, and12(t)/90.23; 9009.90.10; 9009.90.30; 9009.90.50; 9009.90.70

HQ 959761 May 14, 1997 CLA-2 RR:TC:MM 959761 DWS CATEGORY: Classification TARIFF NO.: 9009.12.00 Mr. John M. Peterson Neville, Peterson & Williams 80 Broad Street New York, NY 10004 RE: Electrostatic Photocopiers; Chapter 90, Additional U.S. Note 5; General Notes 12(b), 12(t)/90.CR3, 12(t)/90.21, and 12(t)/90.23; 9009.90.10; 9009.90.30; 9009.90.50; 9009.90.70 Dear Mr. Peterson: This is in response to your letters of July 24, 1996, to the Commissioner of Customs, and August 29, 1996, to the Port Director of Customs, New York, on behalf of Xerox Corporation, concerning the applicability of the North American Free Trade Agreement (NAFTA) to electrostatic photocopiers under the Harmonized Tariff Schedule of the United States (HTSUS). Your letters were referred to this office for a response. We regret the delay. FACTS: The merchandise consists of electrostatic photocopiers (model #5345 and 5355) which will be manufactured in Mexico. They will be built using parts from electrostatic copiers (model #1050, 5052, and 5053) "hulks". Most of the photocopier "hulks", some of them no longer operational, will be exported from the U.S. to Mexico where they will be disassembled into their constituent parts. You state that at the time of their initial manufacture in the U.S., the "hulks" would not have qualified as originating for purposes of the NAFTA. It is also our understanding that some of the model 5053 "hulks" which will be exported to Mexico are products of the Netherlands. Certain of the "hulk" parts will be disposed of in all instances. Other parts will be examined to determine whether they are suitable for reuse, or for refurbishing and reuse. You claim that all of the components yielded from the exported copier "hulks" will be treated as non-originating for purposes of the NAFTA. Xerox will then commence the process of assembling the subject photocopiers by assembling together the five major subassemblies of each copier along with other copier parts and assemblies. Xerox will ensure that each of the major subassemblies of the copier (optics assembly, imaging assembly, fuser assembly, paper assembly, and control assembly) are assembled in Mexico, and that at least one component of each subassembly is originating for purposes of the NAFTA. You claim that Xerox will accomplish this task by utilizing a scoring sheet which is designed to measure whether the photocopiers meet the NAFTA Annex 401 preference rule of origin for electrostatic photocopiers. ISSUE: Whether the electrostatic photocopiers are eligible for preferential treatment under the NAFTA. LAW AND ANALYSIS: Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's). GRI 1 provides that classification is determined according to the terms of the headings and any relative section or chapter notes. The subheadings under consideration are as follows: 9009.12.00: [p]hotocopying apparatus incorporating an optical system or of the contact type and thermocopying apparatus; parts and accessories thereof: [e]lectrostatic photocopying apparatus: [o]perating by reproducing the original image via an intermediate onto the copy (indirect process). 9009.90.10: . . . : [p]arts and accessories: [p]arts of photocopying apparatus of subheading 9009.12 specified in additional U.S. note 5 to this chapter: [p]arts other than photoreceptors or assemblies containing photoreceptors. 9009.90.30: . . . : . . . : . . . : [o]ther. 9009.90.50: . . . : . . . : [o]ther: [p]arts and accessories, other than photoreceptors or assemblies containing photoreceptors, of electrostatic copying machines of subheading 9009.12. 9009.90.70: . . . : . . . : . . . : [o]ther. Goods which are products of Mexico and classifiable under any of the above provisions receive duty-free treatment. Chapter 90, additional U.S. note 5, HTSUS, states that: [s]ubheadings 9009.90.10 and 9009.90.30 cover the following parts of photocopying apparatus of subheading 9009.12: (a) Imaging assemblies, incorporating more than one of the following: photoreceptor belt or cylinder, toner receptacle unit, toner distribution unit, developer receptacle unit, developer distribution unit, charge/discharge unit, cleaning unit; (b) Optics assemblies, incorporating more than one of the following: lens, mirror, illumination source, document exposure glass; (c) User control assemblies, incorporating more than one of the following: printed circuit assembly, power supply, user input keyboard, wiring harness, display unit (cathode ray type or flat panel); (d) Image fixing assemblies, incorporating more than one of the following: fuser; pressure rollers, heating elements, release oil dispenser, cleaning unit, electrical controls; (e) Paper handling assemblies, incorporating more than one of the following: paper transport belt, roller, print bar, carriage, gripper roller, paper storage unit, exit tray; or (f) Combinations of the above specified assemblies. Therefore, each of the major subassemblies for the subject photocopiers are classifiable under subheadings 9009.90.10 and 9009.90.30, HTSUS, and the components which make up those subassemblies are classifiable under subheadings 9009.90.50 and 9009.90.70, HTSUS, and under other headings in the HTSUS. 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, which, in part, states that: [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 -- (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; . . . Because the photocopiers contain parts from countries other than Mexico, Canada and/or the U.S., general note 12(b)(i), HTSUS, does not apply. Therefore, we must resort to general note 12(B)(ii)(A), HTSUS. General notes 12(t)/90.21 and 90.23, HTSUS, state: 21. A change to subheading 9009.12 from any other tariff item, except from tariff items 9009.90.10 and 9009.90.30. 22. xxx 23. A change to tariff items 9009.90.10 or 9009.90.30 from tariff items 9009.90.50 or 9009.90.70, or any other heading, provided that at least one of the components of such assembly named in chapter rule 3 to chapter 90 is originating. General note 12(t)/90.CR3 (chapter rule 3), HTSUS, integrates chapter 90, additional U.S. note 5, HTSUS, into general note 12(t)/90, HTSUS, and defines the parts which are to be included under subheadings 9009.90.10 and 9009.90.30, HTSUS. General note 12(t)/90.21 requires that, for photocopiers of subheading 9009.12.00, HTSUS, to be originating, all major subassemblies (as defined in chapter 90, additional U.S. note 5, HTSUS, .and general note 12(t)/90.CR3, HTSUS) must be originating for purposes of the NAFTA. The note allows for other parts of the photocopiers to be non-originating. General note 12(t)/90.23 requires that, for the major subassemblies to be originating, they must be assembled in a NAFTA territory (Mexico) and each consist of at least one component named in general note 12(t)/90.CR3, HTSUS, which is originating. With regard to the subject photocopiers, you have stated that the major subassemblies (classifiable under subheadings 9009.90.10 and 9009.90.30, HTSUS) for the photocopiers will be fully assembled in Mexico; that each of the components from the disassembled "hulks" which will be used in assembling the major subassemblies are classifiable under subheading 9009.90.50, HTSUS, under subheading 9009.90.70, HTSUS, and under other tariff headings in the HTSUS; and that at least one component for each of the subassemblies will qualify as originating as required in general note 12(t)/90.23. The scoring sheet you provided lists several components as originating: photoreceptor belt (USA); illumination source (USA); wiring harness (Mexico); oil dispenser (Mexico); and paper transport belt (USA). Therefore, the terms of general note 12(t)/90.23, HTSUS, have been met, in that non-originating components have undergone a tariff shift from subheadings 9009.90.50 and 9009.90.70, HTSUS, and other tariff headings in the HTSUS, to subheadings 9009.10.00 and 9009.30.00, HTSUS. Because the major subassemblies qualify as originating, the subject photocopiers meet the terms of general note 12(t)/90.21, HTSUS. Therefore, based upon the information you have provided and assuming the components on the scoring sheet qualify as originating for NAFTA purposes, the electrostatic photocopiers are eligible for preferential treatment under the NAFTA. HOLDING: The electrostatic photocopiers are eligible for preferential treatment under the NAFTA. Sincerely, John Durant, Director Tariff Classification Appeals Division