H342177

 HQ H342177 November 26, 2024 OT:RR:CTF:VS H342177 RRB CATEGORY: Origin PJ Trainham Bay Brokerage Inc. 42832 NYS Route 12 Alexandria Bay, NY 13607 RE: USMCA Eligibility; Used Automotive Parts; Disassembly Dear Mr. Trainham: This is in response to your ruling request, dated September 12, 2024, on behalf of New England Auto Parts, concerning preferential tariff treatment under the United States-Mexico-Canada Agreement (“USMCA”) for used automotive components sourced from salvage yards in Canada and obtained by disassembly of used vehicles in Canada. We note that you were issued a ruling, dated April 11, 2007, concerning the same set of facts that you reassert in the instant matter. In Headquarters Ruling Letter (“HQ”) H004446, dated April 11, 2007, we issued a decision regarding the eligibility of used auto parts for preferential tariff treatment under the North American Free Trade Agreement (“NAFTA”) and whether such goods would be considered originating under NAFTA by application of 19 C.F.R. § 181.132. Because NAFTA has been replaced by the USMCA, you now seek a new ruling on the same set of facts. Our response follows. FACTS: New England Auto Parts purchases automotive components in Canada from operators of salvage yards. The salvage yards obtain these parts by disassembly of vehicles in Canada. New England Auto Parts sells these used, operational automotive parts to retail customers in the United States. The circumstances at issue in the instant request remain the same as those set forth in HQ H004446. However, in response to our email request, dated November 7, 2024, for clarification concerning the parts at issue, you have provided two commercial invoices, dated October 3, 2024, and October 19, 2024, containing descriptions and tariff classifications for additional parts. Our office understands that these parts are a representative sample of the types of recovered used parts imported by New England Auto Parts. They include: Automotive Engines (classified in subheading 8407.34, Harmonized Tariff Schedule of the United States (“HTSUS”)); Body parts, such as steel hinges (classified in subheading 8302.10, HTSUS), rear panels (classified in subheading 8708.29, HTSUS), and plastic handles (classified in subheading 3926.30.10, HTSUS); and Other parts, including air bags (classified in subheading 8708.95, HTSUS). In addition to the parts described in the above-referenced invoices, you also seek a determination for preferential tariff treatment under the USMCA for parts of used snowmobiles that will be disassembled in Canada, including engines (classified in subheading 8407.33, HTSUS), clutches (classified in subheading 8708.93, HTSUS), chassis components (classified in subheading 8708.99, HTSUS), and hood cowls (classified in subheading 8708.29, HTSUS). Moreover, the instant request will also cover parts examined in HQ H004446, which include the following parts, along with their classification under the 2024 version of the HTSUS: Gasoline and Diesel Engines—classified in headings 8407 and 8408, Harmonized Tariff Schedule of the United States (HTSUS); Body parts, such as doors, fenders and hoods—classified in subheading 8708.29, HTSUS; Gear boxes and parts—classified in subheading 8708.40, HTSUS; Axles—classified in subheading 8708.50, HTSUS; Wheels—classified in subheading 8708.70, HTSUS; and Other parts, including air bag kits (classified in subheading 8708.95, HTSUS), steering columns (classified in subheading 8707.94, HTSUS) and headlights (classified in subheading 8512.10, HTSUS). You explain that these parts will be obtained by disassembly from used vehicles and are classified in headings 8703 and 8704, HTSUS. New England Auto Parts intends to claim preferential tariff treatment under the USMCA on the basis that each of the above-referenced representative parts undergoes a prescribed change in tariff classification when disassembled from used vehicles classified in different tariff provisions, such that the parts qualify for tariff treatment as originating goods under the USMCA when imported into the United States. Although HQ H004446 discussed the application of the marking rules under NAFTA, New England Auto Parts has confirmed that they only seek a determination as to preferential tariff treatment under the USMCA. ISSUE: Whether disassembly in Canada of automotive parts from used vehicles qualifies the parts as originating under the USMCA when they are imported into the United States from Canada. LAW AND ANALYSIS: The 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)(i) provides: 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 territory of 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 except for a good provided for in any of chapters 61 through 63— the good is produced entirely in the territory of one or more USMCA countries; one or more of the nonoriginating materials provided for as parts under the tariff schedule and used in the production of the good do not satisfy the requirements set forth in this note because— both the good and its materials are classified under the same subheading or under the same heading that is not further subdivided into subheadings; or the good was imported into the territory of a USMCA country in unassembled form or disassembled form but was classified as an assembled good pursuant to general rule of interpretation 2(a) of the tariff schedule; and the regional value content of the good, determined in accordance with subdivision (c) of this note, is not less than 60 percent if the transaction value method is used, or not less than 50 percent if the net cost method is used, and such good satisfied all other provisions of this note. For purposes of determining whether a remanufactured good is an originating good, a recovered material derived in the territory of one or more USMCA countries shall be treated as originating if the recovered material is used or consumed in the production of, and incorporated in, the remanufactured good. GN 11(l)(xvi) defines “production” as either: growing, culti

The 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)(i) provides: 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 territory of 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 materi