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

N161815 May 13, 2011 CLA-2-85:OT:RR:NC:N1:108 CATEGORY: Classification TARIFF NO.: 8528.72.6400 Mr. Steven B. Zisser Zisser Customs Law Group Suite 114 2297 Niels Bohr Court San Diego, CA 92154 RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of a liquid crystal display (LCD) television from Mexico; Article 509 Dear Mr. Zisser: In your letter dated April 15, 2011, you requested a ruling, on behalf of Delta Electronics Mexico, S.A. de C.V., on the status of an LCD television from Mexico under the NAFTA. The subject merchandise, based on the submitted information, is a 32-inch LCD high-definition color television, model number LG 32LD550, which is stated to represent similarly constructed LG TV’s of various screen sizes ranging from 15 inches to 65 inches. This television, which is manufactured in Mexico from non-originating Chinese components, has NetCast™ Entertainment Access and is wireless 1080p ready; moreover, this television, which incorporates a USB port, contains the electrical circuitry for reproducing video and music files stored on a USB storage device (not included). In regard to this television, two scenarios are posed as to how this merchandise can be imported into Mexico for export to the United States. SCENARIO 1: The merchandise consists of the LCD subassembly and the main board, which are imported separately into Mexico in different shipments and at different times in noting that the parts are shipped independently as production needs occur. When imported into Mexico, the pre-assembled LCD subassembly essentially consists of the LCD panel, the power/inverter board, the key pad with keyboard assembly, the IR board assembly, the stand base, the speakers, and the wire harnesses. The LCD subassembly does not contain a tuner or a main board and cannot receive or process a broadcast television signal or any other type of signal. The main board, when imported into Mexico, is stated to contain all the television control elements, including a television tuner and all audio and video components; furthermore, the main board, which does not have a power supply or a display screen, contains all of the components, excepting the deflection circuitry, enumerated in Additional U.S. Note 9 to Chapter 85 of the Harmonized Tariff Schedule of the United States (HTSUS). In Mexico, the LCD subassembly is disassembled in such a manner to allow the main board to be incorporated into the LCD subassembly, with all the required operations being performed in assembling this merchandise. In this manner, the components are further manufactured to produce a functioning LCD television. SCENARIO 2: The merchandise essentially consists of the following: the LCD panel unit, the television chassis frame, the main board, and the power/inverter board, all of which are imported separately into Mexico in different shipments and at different times in noting that the parts are shipped independently as production needs occur. The LCD panel unit is stated to contain a reflection/deflection sheet, diffusion sheets and a diffusion panel; moreover, this unit contains a backlight unit with fluorescent lamps, lamp holders, a reflection mirror, a back panel, and the LCD glass subassembly. The television chassis frame, which has a metal frame, is stated to contain a back and front cabinet; speaker and keypad cables; and a remote control IR circuit board assembly. In Mexico, the television chassis frame is disassembled in such a manner to allow the LCD panel unit, the main board (containing all the parts, excepting the deflection circuitry, specified in Additional U.S. Note 9 to Chapter 85, HTSUS), and the power/inverter board, along with other components, to be properly assembled together with the TV chassis frame through various operations. Through this process, the components are further manufactured to produce a functioning LCD television. The applicable tariff provision for this complete LCD television, under both scenarios, will be 8528.72.6400, 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: Incorporating video recording or reproducing apparatus: Other. The general rate of duty will be 3.9 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. Based on the facts provided, the television described above, under both scenarios, qualifies for NAFTA preferential treatment because it will meet the requirements of HTSUS General Note 12(b)(ii)(A). Moreover, based on the information submitted, the non-originating components, under both scenarios, 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.” This complete LCD color television 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. Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs and Border Protection, Regulations & Rulings, 799 9th Street N.W. - 7th floor, Washington, DC 20229-1177. Sincerely, Robert B. Swierupski Director National Commodity Specialist Division