The tariff classification and status under the North American Free Trade Agreement (NAFTA) of LCD (liquid crystal display) televisions from Mexico; Article 509

N101697 May 13, 2010 CLA-2-85:OT:RR:NC:N1:108 CATEGORY: Classification TARIFF NO.: 8528.72.72 Mr. Steven B. Zisser Zisser Customs Law Group Suite 114 2297 Niels Bohr Court San Diego, California 92154 RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of LCD (liquid crystal display) televisions from Mexico; Article 509 Dear Mr. Zisser: In your letter dated April 13, 2010, on behalf of Trend Smart America, Ltd., you requested a ruling on the status of LCD televisions from Mexico under the NAFTA. The merchandise in question is LCD televisions of various screen sizes ranging from 19” to 60”. The LCD televisions are assembled in Mexico from non-originating components consisting of an LCD subassembly and a main board, which are imported separately into Mexico in different shipments at different times. When imported into Mexico, the LCD subassembly consists of an LCD panel, a front bezel, a back cover, a power board assembly, a wire harness, a stand assembly (on certain models) and two speakers. This LCD subassembly does not contain a tuner and cannot receive or process a broadcast television signal or any other video or audio signals. When imported into Mexico, the main board, which is a printed circuit board assembly with all television control elements, contains a television tuner and all audio and video components. In addition, the main board, which does not have a power supply, contains all of the components enumerated in Additional U.S. Note 9 to Chapter 85. In Mexico, the LCD subassembly is disassembled in such a way, i.e., the back cover is removed and the stand assembly (only affixed on certain models) is removed, to allow the main board to be incorporated into the LCD subassembly. Moreover, several other steps, such as adding the LVDS/speaker/Pwbc pins to further secure the main board, are performed in the final assembly process of this merchandise. In this manner, the components are further manufactured to produce a functioning LCD television. The applicable tariff provision for the completed televisions will be 8528.72.72, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Monitors and projectors, not incorporating television reception apparatus; reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus: Reception apparatus for television, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus: Other, color: With a flat panel screen: Other: Other. The general rate of duty will be 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/. General Note 12(b), HTSUS, sets forth the criteria for determining whether a good is originating under the NAFTA. General Note 12(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that For 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 or the rules set forth therein, or (B) the goods otherwise satisfy the applicable requirements of subdivisions (r), (s) and (t) where no change in tariff classification is required, and the goods satisfy all other requirements of this note; or (iii) they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials; or (iv) they are produced entirely in the territory of Canada, Mexico and/or the United States but one or more of the nonoriginating materials falling under provisions for “parts” and used in the production of such goods does not undergo a change in tariff classification because-- (A) the goods were imported into the territory of Canada, Mexico and/or the United States in unassembled or disassembled form but were classified as assembled goods pursuant to general rule of interpretation 2(a), or (B) the tariff headings for such goods provide for and specifically describe both the goods themselves and their parts and is not further divided into subheadings, or the subheadings for such goods provide for and specifically describe both the goods themselves and their parts, provided that such goods do not fall under chapters 61 through 63, inclusive, of the tariff schedule, and provided further that the regional value content of such goods, determined in accordance with subdivision (c) of this note, is not less than 60 percent where the transaction value method is used, or is not less than 50 percent where the net cost method is used, and such goods satisfy all other applicable provisions of this note. Based on the facts provided, the goods described above qualify for NAFTA preferential treatment, because they will meet the requirements of HTSUS General Note 12(b)(ii)(A). Moreover, based on the information submitted, the non-originating components will undergo the appropriate change in tariff classification, as required by HTSUS General Note 12 (t)/85.91(H), which reads: "A change to other reception apparatus for television of subheading 8528.72 from incomplete or unfinished reception apparatus for television (including assemblies for reception apparatus consisting of all the parts specified in chapter rule 3 to chapter 85 plus a power supply), not incorporating a cathode-ray tube, flat panel screen or similar display, of subheading 8528.72 or any other heading." The goods will therefore 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 Lisa Cariello at (646) 733-3014. Sincerely, Robert B. Swierupski Director National Commodity Specialist Division