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NY 811617

July 27, 1995

CLA-2-84:S:N:N3:102 811617


TARIFF NO.: 8483.10.3010

Mr. Robert E. Burke
Barnes, Richardson & Colburn
200 East Randolph Drive, Suite 7920
Chicago, Illinois 60601

RE: The tariff classification and status, as well as country of origin marking requirements under the North American Free Trade Agreement (NAFTA), of crankshafts from Mexico; Article 509

Dear Mr. Burke:

In your letter dated June 23, 1995 you requested a ruling on the status of engine crankshafts from Mexico under the NAFTA, as well as on the country of origin marking requirements for an imported article which is processed in a NAFTA country prior to being imported into the U.S. A marked sample was not submitted with your letter for review.

The items at issue are crankshafts designed for use in diesel engines incorporated into various road vehicles. Partially machined forgings are originally produced in Brazil and subsequently shipped to Mexico. The degree of machining operations conducted in Brazil is minor, consisting of milling and machining the locator center points on each end, as well as cutting a 50 mm by 13 mm grease pocket at one end. In Mexico, Cummins Mexico S.A. (CUMMSA) machines, grinds and polishes the forgings into finished crankshafts prior to exportation to the United States.

It is your position that the forgings sent from Brazil to Mexico should be classified under heading 7224 of the Harmonized Tariff Schedules, which provides for "semifinished products of other alloy steel". Likewise you claim that the finished crankshafts from Mexico should be classified under heading 8483.10, HTS, which provides for camshafts and crankshafts for vehicles of chapter 87, other than for internal combustion engines. These tariff classifications would allow the crankshafts to meet the tariff shift requirements of NAFTA and provide eligibility for preferential treatment.

In your letter you state that heading 7224 is governed by Note 1(ij) to Chapter 72 which states that semifinished products are "products of solid section, which have not been further worked than subjected to primary hot-rolling or roughly shaped by forging. . . .". You also cite the Explanatory Notes to Chapter 72 to support your position that the crankshaft forging, as it emerges from Brazil, meets the guidelines for consideration as a semifinished steel product. Note B of the Explanatory Notes to Chapter 72 states, in full:

"PIECES ROUGHLY SHAPED BY FORGING: These are semi-finished products of rough appearance and large dimensional tolerances, produced from blocks or ingots by the action of power hammers or forging presses. They make take the form of crude recognizable shapes in order that the final article can be fabricated without excessive waste, but the heading covers only those pieces which require considerable further shaping in the forge, press, lathe, etc. The heading would, for example, cover an ingot roughly hammered into the shape of a flattened zig-zag and requiring further shaping to produce a marine crankshaft, but it would not cover a crankshaft forging ready for final machining. The heading similarly excludes drop forgings and pressings produced by forging between matrices since the articles produced by these operations are ready for final machining." (emphasis added)

It is our opinion that the forgings imported into Mexico from Brazil do not meet the interpretative guidelines for classification under HTS chapter 7224. These are not "flattened zig-zags" that are shaped into crude images of a crankshaft. The fact that they are capable of being center marked for machining on a lathe, as well as the fact that a "grease pocket" can be cut in one end, indicates that the forgings are rounded and have a clearly recognizable crankshaft shape. While the grinding and cutting operations performed in Mexico are significant, they are not so extreme as to qualify as "considerable further shaping". It is not the opinion of the Customs Service that the term "final machining", in the context of the Explanatory Notes to Chapter 72, is limited to the last stages of grinding, polishing and surface lapping needed to produce a mirror-like finish.

The applicable tariff provision for the * will be *, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for *. The general rate of duty will be *.

The merchandise does not qualify for preferential treatment under the NAFTA because one or more of the non-originating materials used in the production of the goods will not undergo the change in tariff classification required by General Note 12(t)/*, HTSUSA.

The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate the ultimate purchaser in the U.S. the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

The country of origin marking requirements for a "good of a NAFTA country" are also determined in accordance with Annex 311 of the North American Free Trade Agreement ("NAFTA"), as implemented by section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057) (December 8, 1993) and the interim amendments to the Customs Regulations published as T.D. 94-4 (59 Fed. Reg. 109, January 3, 1994) with corrections (59 Fed. Reg. 5082, February 3, 1994) and T.D. 94-1 (59 Fed. Reg. 69460, December 30, 1993). These interim amendments took effect on January 1, 1994 to coincide with the effective date of the NAFTA. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in T.D. 94-4 (adding a new Part 102, Customs Regulations). The marking requirements of these goods are set forth in T.D. 94-1 (interim amendments to various provisions of Part 134, Customs Regulations).

Section 134.1(b) of the interim regulations, defines "country of origin" as
the country of manufacture, production, or growth of any article of foreign origin entering the U.S. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the "country of origin within this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin. (Emphasis added).

Section 134.1(j) of the interim regulations, provides that the "NAFTA Marking Rules" are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) of the interim regulations, defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules. Section 134.45(a)(2) of the interim regulations, provides that a "good of a NAFTA country" may be marked with the name of the country of origin in English, French or Spanish.

You state that the imported * are processed in a NAFTA country "*" prior to being imported into the U.S. Since, "*" (name of NAFTA country) is defined under 19 CFR 134.1(g), as a NAFTA country, we must first apply the NAFTA Marking Rules in order to determine whether the imported * is a good of a NAFTA country", and thus subject to the NAFTA marking requirements.

Part 102 of the interim regulations, sets forth the "NAFTA Marking Rules" for purposes of determining whether a good is a good of a NAFTA country for marking purposes. Section 102.11 of the interim regulations, sets forth the required hierarchy for determining country of origin for marking purposes.

Applying the NAFTA Marking Rules set forth in Part 102 of the interim regulations to the facts of this case, we find that the imported * is a good of a * for marking purposes.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).

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.

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, Office of Regulations and Rulings, U.S. Customs Service, 1301 Constitution Ave. N.W., Franklin Court, Washington, D.C. 20229.


Jean F. Maguire
Area Director

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