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NY 874970




June 17, 1992

CLA-2-73:S:N:N1:115 874970

CATEGORY: CLASSIFICATION

TARIFF NO.: 7326.90.9090

Mr. Reinhard T. Stipp
RTS Advanced Modular Equipment Systems Inc. 11831-79 A Avenue
Delta, BC V4C 7H8 Canada

RE: The tariff classification of hospital equipment from Germany.

Dear Mr. Stipp:

In your letter dated May 24, 1992, you requested a tariff classification ruling.

The subject product is described as the DVE 4000 Series modular design system for hospital operating rooms and intensive care units. The system consists of units designed to enhance the safety, comfort, appearance and to convey necessary equipment to various hospital areas. The equipment includes electrical cables, pipes, gas supply, communication and other equipment used to convey oxygen, compressed air, nitrous oxide, vacuum, anaesthesia, data processing and nurse call. In addition, there are two equipment carriers available that can be attached to the system via tubes, thereby permitting monitors and other equipment to be repositioned to create improved workplace efficiency. The following components are included in the system:

1. Ceiling Pipe - It is made of hollow steel and covers the mounting hole.

2. Single and Double Support Arms - These are pressed aluminum hollow profiles with specially fitted drilled holes.

3. End Caps - The caps are made of plastic and cover the joints.

4. Boxes - These are round gas outlets and square electrical outlet lids and are composed of foamed solidified plastic.

5. Carrier/Stand - These are painted and stainless steel articles used below the box.

Initially, the system will be imported fully assembled from Germany. It is also intended to import the system unassembled at a future date and to assemble the system in either the United States or Canada.

The system, whether imported fully assembled or unassembled, is considered composite goods, consisting of different materials or made up of different components, which include not only components attached to each other to form a practically inseparable whole but also those with separable components, provided these components are adapted one to the other and are mutually complementary and that together they form a whole which would not normally be offered for sale in separate parts. This item shall be classified as if it consisted of the material or component which gives it its essential character. In this instance, the steel units impart the essential character.

The applicable subheading for the DVE 4000 Series modular design system will be 7326.90.9090, Harmonized Tariff Schedule of the United States (HTS), which provides for other articles of iron or steel, other. The duty rate will be 5.7% ad valorem.

Your inquiry also requests information on any differences in classification that may occur if the unassembled units are assembled in Canada with the addition of various U.S. made articles (i.e., gas-outlets and hoses, electric sockets, etc.). It is noted that the imported units will comprise less than 50% of the final product as exported from Canada to the U.S. In general, the following describes the circumstances required for goods imported from Canada to the U.S. to benefit from the United States-Canada Free Trade Agreement of 1988.

The United States-Canada Free Trade Agreement Implementation Act of 1988 (CFTA), provides preferential tariff treatment for covered goods originating in the territory of Canada as described in General Note 3(c)(vii), HTS. We call your attention to General Note 3(c)(vii)(H)(1) which states that, notwithstanding subdivision (c)(vii)(G), goods described in that paragraph shall be considered to have been transformed in the territory of Canada and be treated as goods originating in the territory of Canada and/or the United States if (1) the value of materials originating in the territory of Canada and/or the United States that are used or consumed in the production of the goods plus the direct cost of assembling the goods in the territory of Canada and/or the United States constitute not less than 50 percent of the value of the goods when exported to the territory of the United States, and (2) the goods have not subsequent to assembly undergone processing or further assembly in a third country and they meet the requirements of subdivision (c)(vii)(E) of this note.

If the merchandise meets these requirements and the applicable regulations, then goods classifiable under subheading 7326.90.9090, HTS, which originated in the territory of Canada, will be entitled to a reduced rate of duty under the United States-Canada Free Trade Agreement.

Goods classifiable under subheading 7326.90.9090, HTS, which have originated in the territory of Canada, will be entitled to a 3.4% rate of duty under the United States-Canada Free Trade Agreement (FTA) upon compliance with all applicable regulations.

This ruling is being issued under the provisions of Section 177 of the Customs Regulations (19 C.F.R. 177).

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is imported. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

Jean F. Maguire
Area Director

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