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NY D83836

November 28, 1998

CLA-2-90:RR:NC:MM:105 D83836


TARIFF NO.: 9032.10.0060

Mr. Mario Tello
1620 Washington Street
Laredo, TX 78040-4464

RE: The tariff classification, marking, and status under the GSP and the North American Free Trade Agreement (NAFTA), of thermostats and parts of thermostats from Mexico and Brazil; Article 509

Dear Mr. Tello:

In your letter dated October 15, 1998, for Robertshaw Controls, you requested a ruling.

The sample submitted is an RC Thermostat, which according to the attached literature, "is used to control the operation of the compressor in residential refrigerators. Utilizing a gas filled diastat, the `RC` senses the internal temperature of the refrigerator and switches the compressor on and off to maintain the interior temperature of the refrigerator at the desired level."

Your "first scenario" concerns shipping the eleven sub-assemblies and parts of the thermostat from Brazil, their country of origin, to the USA. We assume that these would be bulk shipments, not grouped into kits of assemblies-parts for each thermostat. We cannot answer your question concerning the extent that the General System of Preferences (GSP) would apply without sufficiently detailed information for each item for us to be able to classify each. Although some items, such as the Mounting Plate Sub-assembly, would likely be classified as parts of thermostats in 9032.90, others, such as the Switch Sub-assembly, would likely be excluded from Chapter 90 due to its Note 2-a. It is not sufficient that the intended actual use of the particular imports would be in a thermostat. Regardless of their classification, you would be entitled to send the parts to Mexico in bond via a T&E entry.

Your "second scenario" concerns the entry into the USA of the assembled thermostats from Mexico.

We note that you state that the thermostats would be "sold at cost to importer." Given the relationships you indicate among the parties, Deductive or Computed Value may be required at entry to ensure that all statutory elements of value are captured.

Although we cannot find "diastat" in any dictionary, we believe it is clear that the applicable tariff provision for the RC Thermostat will be 9032.10.0060, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for, inter alia, refrigerator thermostats, not designed for wall mounting. The general rate of duty will be 2.3 percent ad valorem.

The thermostats, assembled in Mexico, will not be eligible for GSP upon entry into the USA regardless of their classification since Mexico is not a GSP country.

Each of the non-originating materials used to make the RC thermostat has satisfied the changes in tariff classification required under the HTSUSA General Note 12(t)/78-B. However, it will also be subject to a Regional Value Content (RVC) requirement of 60% under the Transaction Value Method or 50% under the Net Cost Method as required under the rule applicable to it. If the goods are eligible for preferential treatment under the NAFTA, the merchandise will be entitled to a free rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.

Regarding the GSP issues, this ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).

Because of insufficient information in your ruling request, Customs has not addressed the Regional Value Content (RVC) of the subject goods. If you desire a ruling regarding the RVC of your goods and their eligibility for NAFTA preferential treatment, the information noted in Section 181.93(b) of the Customs Regulations (19 CFR 181.93(b)), to the Director, Commercial Rulings Division, Headquarters, U.S. Customs Service, 1300 Pennsylvania Ave. N.W., Washington, D.C. 20229, along with a copy of this letter.

Regarding your question in your section f about the proper marking of the assembled thermostat, exported from Mexico, the proper country of origin for marking purposes will be Mexico, whether or not we agree with you that a "substantial transformation" took place there. It is controlling that the change required by CR 102.20-q, 9032.10-9032.89, is met.

This ruling letter is binding only as to the party to whom it is issued and may be relied on only by that party.

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 J. Sheridan at 212-466-5669.


Robert B. Swierupski

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