H313365

HQ H313365 September 30, 2021 OT:RR:CTF:VS H313365 RMC CATEGORY: Classification Dan Ford Mitsubishi Electric Automotive America, Inc. 15603 Centennial Dr. Northville, MI 48168 RE: USMCA Eligibility of Starters for Heavy Trucks Dear Mr. Ford: This is in response to your correspondence dated August 24, 2020, in which you request a ruling on whether Mitsubishi starters for heavy trucks will be eligible for preferential tariff treatment under the United States-Mexico-Canada Agreement (“USMCA”). Your request, submitted as an electronic ruling request, was forwarded to this office from the National Commodity Specialist Division for response. FACTS: According to the information provided, the heavy duty starters are designated as Mitsubishi part number M009TA0579ZX. They are used to rotate the crank of the truck’s engine, thereby initiating the engine’s power under its own operation. You state that, in most cases, the merchandise will be imported into the United States for use as original equipment in new heavy trucks produced by Freightliner, Daimler, Navistar, and other manufacturers. However, you also note that a certain quantity will also be supplied to aftermarket dealers in the United States for use as aftermarket parts. The assembly of the starters will take place at Mitsubishi’s manufacturing facility in Mexico using both originating and nonoriginating materials. You state that assembly of the starters is primarily completed using robotic equipment. Your submission includes photographs of the merchandise in its condition as imported, a manufacturing flow chart, and a complete bill of materials including the originating status and tariff classification of all materials used in production. You assert that the starter is classified in 8511.40.0000, Harmonized Tariff Schedule of the United States (“HTSUS”), and that the starter will qualify for USMCA preferential tariff treatment under the tariff shift rule provided for in GN 11(o)/85.29. ISSUE: Whether the starters will be eligible for USMCA preferential tariff treatment when they are imported from Mexico to the United States. LAW AND ANALYSIS: The United States-Mexico-Canada Agreement (“USMCA”) was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). General Note (“GN”) 11 of the HTSUS implements the USMCA. GN 11(a) provides that: Goods originating in the territory of a country named herein, pursuant to the United States-Mexico-Canada Agreement (USMCA), are subject to duty as provided herein, including any treatment set forth in subchapter XXIII of chapter 98 and subchapter XXII of chapter 99 of the tariff schedule. For the purposes of this note, as provided in the tariff schedule— Goods that originate in the territory of Mexico, Canada or the United States (hereinafter referred to as “USMCA country” or “USMCA countries” as further defined in subdivision (l)(xxiv) of this note) under the terms of subdivision (b) of this note and regulations issued by the Secretary of the Treasury (including Uniform Regulations provided for in the USMCA), and goods enumerated in subdivision (p) of this note, when such goods are imported into the customs territoryof [sic] the United States and are entered under a subheading for which a rate of duty appears in the “Special” subcolumn, followed by the symbol “S” in parentheses, are eligible for such duty rate, in accordance with section 202 of the United States-Mexico-Canada Agreement Implementation Act; and . . . GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA. GN 11(b) states: For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country, as defined in subdivision (l) of this note, is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a “good originating in the territory of a USMCA country” only if— the good is a good wholly obtained or produced entirely in the territory of one or more USMCA countries; the good is a good produced entirely in the territory of one or more USMCA countries, exclusively from originating materials; the good is a good produced entirely in the territory of one or more USMCA countries using nonoriginating materials, if the good satisfies all applicable requirements set forth in this note (including the provisions of subdivision (o)); or … Here, the merchandise will be produced in Mexico using originating and nonoriginating materials. Therefore, the merchandise will not qualify as originating pursuant to GN 11(b)(i) or (ii). We must therefore consider whether the merchandise qualifies as originating pursuant to GN 11(b)(iii). As noted above, you state that the starters are classified in 8511.40.00, HTSUS. The applicable product-specific rule of origin in GN 11(o)/85.29 is underscored and requires: 29. A change to subheadings 8511.10 through 8511.80 from any other subheading, including another subheading within that group. The subheading rule for goods of 8511.10, HTSUS through 8511.80, HTSUS, provides that “[t]he underscoring of the designations in subdivision 29 pertain to goods provided for in subheadings 8511.10 through 8511.80 for use in a motor vehicle of chapter 87.” Furthermore, Chapter rule 6 for goods of Chapter 85 provides that “[f]or the purposes of the subdivisions pertaining to this chapter, whenever the subdivision designation is underscored, the provisions of subdivision (k) of this note may apply to goods for use in a motor vehicle of chapter 87.” Here, because the product-specific rule is underscored and the merchandise is for use in a motor vehicle of chapter 87 (namely, a heavy truck), the provisions of subdivision (k) may apply. GN 11(k) provides special rules for automotive goods. GN 11(k)(i) provides that: An automotive good and other motor vehicles and parts described herein shall be subject to applicable requirements set forth in this paragraph, including, with respect to a passenger vehicle or light truck that has been authorized to use the alternative staging regime described under subparagraph (viii), applicable requirements for the duration of the alternative staging period specified in the approval. GN 11(k)(ii)(E)(2) includes in the definition of an “automotive good” any “part, component or material listed in table A.1, A.2, B, C, D, or E of the automotive appendix, subject to any provisions that may be included in regulations issued by the Secretary of the Treasury.” GN 11(k)(ii)(D) defines “automotive appendix” as “. . . the Appendix to Annex 4-B of the USMCA (relating to the product-specific rules of origin for automotive goods, as reflected in subdivision (o) of this note).” Examining Table D of the automotive appendix, entitled “Principal Parts for Heavy Trucks,” the subject merchandise is listed (“8511.40 – Starter motors and dual purpose starter-generators of a kind used for spark-ignition or compression-ignition internal combustion engines”) and is for use in a heavy truck. The Note to Table D in the automotive appendix provides that “[t]he Regional Value Content requirements set out in Article 4 of this Appendix apply to a good for use in a heavy truck.” Article 4.2 of the automotive appendix states that: Notwithstanding Article 2 (Product-Specific Rules of Origin for Vehicles) and the Product-Specific Rules of Origin in Annex 4-B, each Party shall provide that the regional value content requirement for a part listed in Table D of this Appendix that is for use in a heavy truck is: 60 percent under the net cost method or 70 percent under the transaction value method, if the corresponding rule includes a transaction value method, beginning on January 1, 2020, or the da

The United States-Mexico-Canada Agreement (“USMCA”) was signed by the Governments of the United States, Mexico, and Canada on November 30, 2018. The USMCA was approved by the U.S. Congress with the enactment on January 29, 2020, of the USMCA Implementation Act, Pub. L. 116-113, 134 Stat. 11, 14 (19 U.S.C. § 4511(a)). General Note (“GN”) 11 of the HTSUS implements the USMCA. GN 11(a) provides that:Goods originating in the territory of a country named herein, pursuant to the United States-Mexico-Canada Agreement (USMCA), are subject to duty as provided herein, including any treatment set forth in subchapter XXIII of chapter 98 and subchapter XXII of chapter 99 of the tariff schedule. For the purposes of this note, as provided in the tariff schedule—Goods that originate in the territory of Mexico, Canada or the United States (hereinafter referred to as “USMCA country” or “USMCA countries” as further defined in subdivision (l)(xxiv) of this note) under the terms of subdivision (b) of this note and regulations issued by the Secretary of the Treasury (including Uniform Regulations provided for in the USMCA), and goods enumerated in subdivision (p) of this note, when such goods are imported into the customs territoryof [sic] the United States and are entered under a subheading for which a rate of duty appears in the “Special” subcolumn, followed by the symbol “S” in parentheses, are eligible for such duty rate, in accordance with section 202 of the United States-Mexico-Canada Agreement Implementation Act; and . . .GN 11(b) sets forth the criteria for determining whether a good is an originating good for purposes of the USMCA. GN 11(b) states:For the purposes of this note, a good imported into the customs territory of the United States from the territory of a USMCA country, as defined in subdivision (l) of this note, is eligible for the preferential tariff treatment provided for in the applicable subheading and quantitative limitations set forth in the tariff schedule as a