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NY H88964

March 13, 2002

CLA-2-85:RR:NC:N1:113 H88964


TARIFF NO.: 8501.34.3000

Mr. L. Lougheed
Euclid-Hitachi Heavy Equipment
200 Woodlawn Road West
Guelph, Ontario, Canada N1H 1B6

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of wheel motor assemblies from Canada; Article 509

Dear Mr. Lougheed:

In your letter dated February 28, 2002, you requested a ruling on the status of a wheel motor assembly from Canada under the NAFTA.

The merchandise is a wheel motor assembly, used in an off-highway dumper. The dumper has two large electrical wheel motor assemblies that are bolted to either end of the rear axle. Power is supplied to these assemblies by a large alternator attached to the engine that produces electricity for them. The wheel motor assemblies provide propulsion and braking for the vehicle. Because of the size of the completed vehicle, its parts must be transported in multiple loads. This ruling addresses only the separately imported wheel motor assemblies.

The bill of material provided shows that the wheel motor assembly consists principally of a US-made, DC motor with an output of over 375 kW. The motor will be exported to Canada to be assembled with a variety of smaller parts, all made in the USA or Canada.

The rules for determining when, for marking purposes, the country of origin of an imported good is one of the parties to "NAFTA" are set forth in Part 102, Customs Regulations. Section 102.11 of the regulations, sets forth the required hierarchy for determining country of origin for marking purposes.

Applying the NAFTA Marking Rules to the facts of this case, we find that the imported wheel motor assembly is a good of the United States for marking purposes. Accordingly, it will not be required to have any country of origin marking pursuant to 19 U.S.C. 1304 when imported into the United States.

The applicable tariff provision for the wheel motor assembly will be 8501.34.3000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for motors, of an output exceeding 375 kW. The general rate of duty will be 2.8 percent ad valorem. 19 CFR 102.19(b), the NAFTA preference override, states:

If, under any other provision of this part, the country of origin of a good which is originating within the meaning of § 181.1(q) of this chapter is determined to be the United States and that good has been exported from, and returned to, the United States after having been advanced in value or improved in condition in another NAFTA country, the country of origin of such good for Customs duty purposes is the last NAFTA country in which that good was advanced in value or improved in condition before its return to the United States.

You have suggested that the merchandise may be eligible for the partial exemption from duty provided for in subheading 9802.00.5060, for articles returned to the United States after having been exported to be advanced in value or improved in condition by repairs or alterations. Such articles are dutiable only upon the cost or value of the foreign repairs or alterations, provided the documentary requirements of the Customs Regulations are satisfied. However, tariff treatment under subheading 9802.00.50, HTS, is precluded where the exported articles are incomplete for their intended purpose prior to the foreign processing. Repairs and alterations are made to completed articles. In this case, the assembly process is a necessary step in the preparation or manufacture of the finished articles. See Guardian Industries Corp. v. United States, USITR, 3 CIT 9 (1982), and Dolliff & Company, Inc. v. United States, 66 CCPA 77, C.A.D. 1225 (1979). The operations performed in Canada appear to constitute acceptable assembly operations within the meaning of subheading 9802.00.80, HTS; therefore, the wheel motor assemblies may be entitled to the partial duty exemption under this tariff provision, assuming compliance with the documentary requirements of 19 C.F.R. §10.24.

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 James Smyth at 646-733-3018.


Robert B. Swierupski

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