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June 17, 1999

CLA-2-84:RR:NC:MM:106 E83107


TARIFF NO.: 8424.89.7090

Mr. David Walser
Arthur J. Humphreys Div.
Border Brokerage Co., Inc.
P. O. Box 249
Sumas WA 98295

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA) of a pressure washer from Canada; Article 509

Dear Mr. Walser:

In your letter dated June 1, 1999, on behalf of BE Pressure Supply Inc., you requested a ruling on the status of a pressure washer from Canada under the NAFTA. You included descriptive literature and other information with your request.

The merchandise in question is the PE-4013 Pressure Washer which is to be assembled in Canada from both NAFTA-originating and non-originating components. The PE-4013 Pressure Washer consists basically of a 13 HP gasoline engine which powers a 4000 PSI - 4GPM pump to force water through a hose and nozzle to attain a high-pressure projection to clean a variety of surfaces, such as house exteriors, cars, decks, sidewalks, gutters, heavy equipment and the like. The major components that are assembled in Canada to form the complete pressure washer are: a Honda "GX" 13 HP internal combustion piston engine, a Comet 4000 PSI - 4GPM pump, a chrome frame, 13 inch pneumatic tires with rims, an adjustable control unloader, a thermal relief valve, a 50 foot pressure hose with couplers, a chemical injector kit, a 5000 PSI pressure gauge, a 4000 PSI gun with 36 inch insulated wand and 4 nozzles.

All components used in the assembly of the pressure washer are said to be products of North America, with the exception of certain nuts and bolts from China, the pump assembly from Japan, the gun assembly and wand assembly from Italy, the engine from Japan, the cart frame from China and the wheel (steel rim and pneumatic tire) from China. The applicable tariff provision for the PE 4013 Pressure Washer will be 8424.89.7090, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for other mechanical appliances for projecting, dispersing or spraying liquids or powders. The general rate of duty will be 1.8 percent ad valorem.

To be eligible for tariff preferences under the North American Free Trade Agreement (NAFTA), goods must be "originating goods" within the rules of origin in General Note 12(b)(i), HTSUS. The pressure washers are not wholly obtained in the U.S. or Canada because they incorporate non?originating materials (the pump, the engine and so on, as above). However, the non-originating goods may be "transformed in the territory of Canada, Mexico and/or the United States" pursuant to General Note 12(b)(ii), HTSUS, which states:

(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...

(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...

You propose the manufacture of pressure washers from entirely U.S. and Canadian origin materials, with the exception of the goods noted above. General Note 12(t)/84.65(A), HTSUS, regarding NAFTA, provides as follows:

A change to subheadings 8424.10 through 8424.89 from any other heading.

All but two of the non-originating materials used to make the pressure washers have satisfied the changes in tariff classification required under HTSUSA General Note 12(t)/84.65(A). The non-originating gun assembly and the wand assembly do not undergo the change in tariff classification required under HTSUSA General Note 12(t)/84.65(A). However, since these non-originating assemblies constitute no more than 7 percent of the transaction value of the completed pressure washers, adjusted to a F.O.B. basis, they shall be considered as originating goods in accordance with the De Minimis rule found in HTSUSA General Note 12(f)(i). Therefore, the pressure washers will 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).

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 Patrick Wholey at 212-637-7036.


Robert B. Swierupski

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