The tariff classification and status under the North American Free Trade Agreement (NAFTA) for a Powerstick™ 8GB from Canada

N085365 December 23, 2009 CLA-2-85:OT:RR:NC:N1:109 CATEGORY: Classification TARIFF NO.: 8504.40.9550 Mr. Nigel Harris Chief Executive Officer Ecosolar Solar Technologies 1306 Wellington Street W., Suite #502 Ottawa, Ontario, Canada K1Y3B2 RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) for a Powerstick™ 8GB from Canada Dear Mr. Harris: In your letter dated November 16, 2009 you requested a NAFTA Advance Ruling Request on the status of a Powerstick™ 8GB from Canada under the NAFTA. The merchandise subject to this ruling is a Powerstick™ 8GB. The Powerstick™ 8GB is a portable, microprocessor-controlled power source and electronic data-storage that provides an electrical charge for most mobile devices including cell phones, PDAs, MP3 players, Bluetooth headsets, and digital cameras and provides for electronic data storage similar to many common memory-stick products. It can simultaneously provide power and charge the batteries of the mobile devices. The Powerstick ™ 8GB is similar to the Powerstick™ ruled upon in New York Ruling N023473, dated March 7, 2008. However, the Powerstick™ 8GB is a new product, which has been modified to include flash memory along with its original stored electrical power capability. The Powerstick™ 8GB must be charged in order to supply power. It can be recharged about 1000 times via a USB connector, thereby greatly reducing consumer reliance on chemical batteries that typically contain heavy-metals and other toxins. Plugging the Powerstick ™ 8GB’s USB adapter into a USB port electrically charges the powerstick’s lithium polymer storage chemistry. The Powerstick ™ 8GB recharges a myriad of electrical devices by transferring electrical energy from itself to the device through an electrical connecting wire. Similarly, through use of its USB port, it can be used to store data that needs to be transported from one electronic device to another. The Powerstick™ 8GB is lead-free, RoHS compliant, UL, CE, CSA, and FCC certified. This device has five major components. It contains a printed circuit board (PCB) that is populated with approximately four-dozen electronic components, a lithium polymer battery, and a liquid crystal display. All of these components are contained with a two-piece plastic clamshell housing. The Powerstick™ 8GB is produced in Canada from originating materials from Canada and the United States and non-originating materials from Taiwan and China. The originating materials from Canada are housings; mechanical components, membrane, and labels. The originating materials from the United States are various integrated circuits (microcontrollers, battery monitors, battery charger, input over voltage protection, DC/DC converters, LDO voltage regulators, MOSFET, PMOS switches, and current limit switches), ceramic capacitors, memory – 8 GB flash, and connectors for flash memory. The non-originating materials from China are liquid crystal displays (LCDs), USB connectors, tact switches, 2.5mm audio jacks, power inductors, lithium polymer batteries, printed circuit boards (PCBs), wire connectors, and instructions and packaging. The non-originating materials from Taiwan are flash memory controllers. The entire manufacturing process through final assembly is conducted in Canada. The process involves the population of a printed circuit board (PCB) in the provinces of Ontario and Quebec, Canada. The manufacturing process is as follows: The bare PCB goes through a surface mounting technology (SMT) where the electronic components are mounted directly onto the surface of a PCB. The partially populated PCB is x-rayed to ensure that there are no flaws during the mounting of the components onto the PCB. The partially populated PCB is electronically tested. Following successful interim testing, the liquid crystal display (LCD) and a lithium polymer battery are added to the PCB whereupon a second test is conducted. The assembled PCB is shipped to Ecosol Solar Technologies Inc. in Ottawa, Ontario where the completed PCB is mechanically assembled into its plastic housing, yielding the Powerstick™ 8GB. The Powerstick™ 8GB is then tested again and packaged with its instructions readying it for retail sale. The applicable tariff provision for the Powerstick™ 8GB will be 8504.40.9550, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for “Rectifiers and rectifying apparatus: Other.” The general rate of duty will be 1.5 percent ad valorem. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/. The Powerstick™ 8GB, was produced from originating and non-originating goods. However, since the non-originating materials used in the production of the Powerstick™ did undergo a change in tariff classification in Canada, as described in subdivision (r), (s), and (t) of General Note 12 (b) (ii) (A), [specifically GN 12 (b) (ii) (A) (t) Chapter 85, Chapter rule 7, 6. (A)], the Powerstick™ 8GB will be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements. This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Linda M. Hackett at (646) 733-3015. Sincerely, Robert B. Swierupski Director National Commodity Specialist Division