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NY J84298




May 22, 2003

MAR-2 RR:NC:2:226 J84298

CATEGORY: MARKING

Mr. Michael Roll
Katten Muchin Zavis Rosenman
2029 Century Park East
Suite 2600
Los Angeles, California 90067-3012

RE: Country of Origin of Imported Automotive Brake Shoes

Dear Mr. Roll:

This is in response to your letter dated April 25, 2003, on behalf of Morse Automotive Corporation, requesting a ruling on the country of origin for marking purposes of an imported automotive brake shoe which is processed in a NAFTA country prior to being imported into the U.S.

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 to 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 appropriate Customs Regulations. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in Part 102, Customs Regulations. The marking requirements of these goods are set forth in Part 134, Customs Regulations.

Section 134.1(b) of the 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.

Section 134.1(j) of the 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 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.

You state that the imported automotive brake shoe consists of friction material (a brake lining) of U.S. origin and a steel frame that may be either of U.S., Canadian or non-NAFTA origin. The U.S. friction material and the steel frame (of United States, Canadian or non-NAFTA origin) will be assembled in Mexico into a mounted brake pad prior to being imported into the U.S. Since the United States and Mexico are defined as NAFTA countries under 19 CFR 134.1(g), we must first apply the NAFTA Marking Rules in order to determine whether the imported brake shoe is a "good of a NAFTA country" and thus subject to the NAFTA marking requirements.

Part 102 of the 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 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 regulations to the facts of this case, we find that the imported automotive brake shoe is a good of a NAFTA country for marking purposes.

Under Section 102.11 (a) of the regulations, the country of origin of a good is the country in which “1) the good is wholly obtained or produced, 2) the good is produced exclusively from domestic materials or 3) each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in Section 102.20 of the regulations.”

If the country of origin cannot be determined under Section 102.11(a), we consult Section 102.11(b) (1) under which “the country of origin of the good is the countryof origin of the single material that imparts the essential character of the good.”

Since the product at issue is not wholly obtained or produced in a single country or produced exclusively from domestic materials of a single country, we must determine whether or not an applicable tariff shift takes place in accordance with Section 102.11(a) (3) of the regulations. The applicable tariff shifts are set out in Section 102.20 of the regulations.

The mounted automotive brake pad at issue is classifiable in subheading 8708.31.50, Harmonized Tariff Schedule of the United States (HTS) as mounted brake linings for other vehicles. The friction material component produced in the United States is classifiable either in subheading 6813.10.00 or subheading 8708.39.50, HTS. Subheading 8708.39.50 provides for brakes and servo brakes and parts thereof: other: for other vehicles. Subheading 6813.10.00 provides for friction material and articles thereofnot mounted, for brakes, clutches or the like with a basis of asbestos, of other mineral substances or of cellulose. If this friction material is of asbestos, other mineral substances or cellulose, it is classifiable in subheading 6813.10.00. If this friction material is of other substances (other than cellulose or asbestos or other mineral substances), it is classifiable in subheading 8708.39.50, HTS. You did not submit a component breakdown to allow us to determine whether the friction material is classifiable in subheading 6813.10 .00 or subheading 8708.39.50, HTS. (The steel frame component of this product - manufactured either in Canada, the United States or a non-NAFTA country - is classifiable in subheading 8708.39.50, HTS.)

When the friction material component is combined with the steel frame component to form the finished product, does a tariff shift take place that confers origin?

Section 102.20 of the regulations permits a tariff shift “to subheading 8708.31 from any other heading, except to mounted brake linings and pads of subheading 8708.31 from subheading 6813.10.” If the friction material component is classifiable in subheading 8708.39.50, an allowable tariff shift does not occur when this material is combined with the metal frame, since the finished automotive brake shoe is classifiable in subheading 8708.31 and there has not been a change from another heading. The country of origin cannot be determined under Section 102.11 (a) of the regulations. Therefore, the country of origin of the finished product - the mounted brake pad - would be determined under section 102.11 (b) (1) of the regulations based on the single material that imparts the essential character of the good. The single material that imparts the essential character to this good is the friction material (brake lining) produced in the United States.

If the friction material is classifiable in subheading 6813.10, the tariff classification changes to subheading 8708.31 when this material is combined with the metal to form the finished automotive brake shoe. However, this is not an allowable tariff shift under Section 102.20 of the regulations. Section 102.20 permits a tariff shift to subheading 8708.31 “from any other heading, except to mounted brake linings and pads of subheading 8708.31 from subheading 6813.10.” Thus, the shift from subheading 6813.10 to subheading 8708.31 will not confer origin. The country of origin cannot be determined under Section 102.11 (a) of the regulations. Therefore, the country of origin of the finished product - the mounted brake pad - would be determined under section 102.11 (b) (1) of the regulations based on the single material that imparts the essential character of the good. The single material that imparts the essential character to this good is the friction material (brake lining) produced in the United States.

Whether the friction material component of this automotive brake shoe is classifiable in subheading 6813.10 or 8708.39, the country of origin of the brake shoe under Section 102.11 of the regulations will be the United States.

Since the marking statute, Section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), only requires that goods of foreign origin be marked, there is no Customs requirement to mark a product when the country of origin is deemed to be the United States.

If you wish to mark this product with specific information about the U.S. origin of the friction material, this issue must be addressed by the Federal Trade Commission (FTC). The Bureau of Customs and Border Protection does not have the authority to rule on the propriety of specific marking referring to the United States.

You may contact the FTC, Division of Enforcement, 6th & Pennsylvania Avenue, N.W., Washington, DC 20508, telephone number 202-326-2222, on the propriety of any marking referring to the U.S. origin of this product or its components.

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

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 Jacob Bunin at 646-733-3027 and Robert DeScoucey at 646-733-3008.

Sincerely,

Robert B. Swierupski
Director,

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