HQ 088579

May 23, 1991

CLA-2 CO:R:C:M 088579 JMH

CATEGORY: Classification

TARIFF NO.: 8704.23.00, 8708.99.50, 9802.00.80

Mr. Brian Kavanaugh

A.N. Deringer, Inc.

30 West Service Road

Champlain, NY 12919-9703

RE: Hydraulic tarp roller to be used with roll-on refuse

dumpsters; trucks; parts and accessories of motor vehicles;

motor vehicles principally used for the transport of goods;

United States-Canada Free Trade Agreement (\"CFTA\");

Automotive Products Trade Act (\"APTA\"); articles assembled

abroad in whole or in part of U.S.-origin fabricated

components; General Note 3(c)(iii); General Note 3(c)(vii);

Chapter 98, Subchapter II; Subheading 9802.00.80; 19 CFR

10.24; 19 CFR 10.16(a)

Dear Mr. Kavanaugh:

This is in response to your January 21, 1991, request for a

classification ruling regarding certain tarp rollers imported

from Canada. The tarp rollers are manufactured by C & M Atlas

of Montreal, Quebec.

FACTS:

The articles in question are hydraulic tarp rollers which

are used to cover roll-on refuse dumpsters. The tarp rollers

are manufactured in Canada. They consist of tarpaulin, a tarp

roller, tarp roller stand tubing and a hydraulic motor and hoses.

C & M Atlas has stated that all the parts contained in the

subject tarp roller are of Canadian origin. The tarp rollers are

attached to hoists pulled by a completed cab. The dumpsters

(containers for the refuse) sit on the hoists. In some instances

the completed cab with hoists attached are exported from the

United States, and in some cases the completed cab with hoists

attached are Canadian. The dumpsters are not involved in this

ruling as they are added to the trucks in the United States.

The truck cab with the hoist has a gross vehicular weight

(\"G.V.W.\") of 62,000 pounds, which approximates to 28.18 metric

tons. The truck runs on a diesel engine and is approximately 32

feet long.

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ISSUE:

Issue 1: What is the appropriate classification of the

hydraulic tarp roller when imported by itself?

Issue 2: What is the appropriate classification of the

hydraulic tarp roller when imported installed on a truck of

U.S.-origin?

Issue 3: What is the appropriate classification of the

hydraulic tarp roller when imported installed on a truck of

Canadian-origin?

LAW AND ANALYSIS:

Issue 1: What is the appropriate classification of the

hydraulic tarp roller when imported by itself?

The classification of merchandise under the Harmonized

Tariff Schedule of the United States Annotated (\"HTSUSA\") is

governed by the General Rules of Interpretation (\"GRIs\"). GRI 1,

HTSUSA, states in part that \"for legal purposes, classification

shall be determined according to the terms of the headings and

any relative section or chapter notes\...\"

The hydraulic tarp rollers in question are installed onto

completed truck cabs with hoists (hereafter \"trucks\"). The tarp

rollers are principally, if not solely, used with the trucks.

The trucks are classified as motor vehicles for the transport of

goods. Motor vehicles for the transport of goods are classified

under heading 8704, HTSUSA. Heading 8708, HTSUSA, provides for

\"Parts and accessories of the motor vehicles of headings 8701 to

8705\...\" Section XVI, Note 3, HTSUSA, requires that references

to \"\'parts\' or \'accessories\'\" in chapters 86 to 88 refers to

articles which are solely or principally used with the articles

of those chapters. A part is generally an article which is an

integral, constituent or component part, without which the

article to which it is joined could not function. An accessory

is generally a nonessential but useful item that has a

supplementary function to that of the larger article to which the

accessory is attached. The trucks to which the tarp rollers

will be attached are able to function without the tarp roller.

The tarp roller merely supplements the functions of the truck.

Thus, the tarp roller is an accessory and not a part. Since the

tarp rollers are solely or principally used with dumpsters, the

tarp rollers are accessories of motor vehicles which are

classified in heading 8704. When imported separately, the

appropriate classification for the tarp rollers is in subheading

8708.99.50, HTSUSA, as \"\...Other parts and accessories\...Other\...

Other\...\"

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The United States-Canada Free Trade Agreement

Since the tarp rollers are made of Canadian parts and

imported from Canada, the issue of eligibility under the United

States-Canada Free Trade Agreement (\"CFTA\") arises. The CFTA

provides tariff preferences to certain goods. To be eligible for

tariff preferences under the CFTA, goods must be \"originating

goods\" within the rule of origin in General Note 3(c)(vii)(B),

HTSUSA. There are two primary means in General Note 3(c)(vii)(B)

by which articles imported into the United States may be \"goods

originating in the territory of Canada.\" The first method is if

the goods are \"wholly obtained or produced in the territory of

Canada and/or the United States.\" General Note 3(c)(vii)(B)(1).

The second method is if the goods are \"transformed in the

territory of Canada and/or the United States.\" General Note

3(c)(vii)(B)(2).

A product which is \"wholly obtained or produced in the

territory of Canada and/or United States\" is one which is grown,

mined, harvested, born and raised in Canada and/or the United

States, or otherwise intimately connected to the two countries

and their land, air and sea territories as defined in General

Note 3(c)(vii)(L), HTSUSA. The hydraulic tarp roller does not

meet the definitions found within General Note 3(c)(vii)(L) and

is not \"wholly obtained or produced in the territory of Canada

and/or the United States.\"

The second method to become an originating good for CFTA

purposes is for an article to be transformed in Canada and/or the

United States in accordance with General Note 3(c)(vii)(B)(2). A

transformation is evident when a change in tariff classification

occurs that is authorized by General Note 3(c)(vii)(R), HTSUSA.

None of the components which form the hydraulic tarp rollers are

classified in chapter 87, HTSUSA. Chapter 87 covers vehicles,

other than railway or tramway rolling stock, and the parts and

accessories of such vehicles. When the parts are assembled into

the hydraulic tarp roller, they become an article classified in

chapter 87. This transformation is authorized under General

Note 3(c)(vii)(R)(17)(aa). Thus, the tarp rollers are

originating goods from Canada and are eligible for tariff

preferences under the CFTA.

The Automotive Products Trade Act

The fact that the tarp rollers are products to be used with

motor vehicles and that they are being imported from Canada

raises the applicability of the Automotive Products Trade Act of

1965 (\"APTA\"), 19 U.S.C. 2001 (1989), Act of October 21, 1965,

Pub. L. 89-283, tit. III, sec. 102, 79 Stat 101. APTA allows

certain motor vehicle equipment imported from Canada to enter

duty free. The APTA provisions, effective as of January 1, 1989,

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are found within General Note 3(c)(iii), HTSUSA (19 U.S.C.

1202). Omnibus Trade and Competitiveness Act of 1988, Pub. L.

100-418, Sec. 1204, codified at 19 U.S.C. 3007 (enacted August

23, 1988). General Note 3(c)(iii), HTSUSA, states in part the

following:

Automotive Products and Motor Vehicles Eligible for

Special Tariff Treatment. Articles entered under the

Automotive Products Trade Act are subject to the

following provisions:

\(A\) Motor vehicles and original motor-vehicle

equipment which are Canadian articles and which fall in

provisions for which the rate of duty \"Free (B)\"

appears in the \"Special\" subcolumn may be entered free

of duty. As used in this note\--

\(1\) The term \"Canadian article\" means an article

which originates in Canada, as defined in

subdivision (c)(vii) of this note.

\(2\) The term \"original motor-vehicle equipment\",

as used with reference to a Canadian article

(as defined above), means such a Canadian

article which has been obtained from a

supplier in Canada under or pursuant to a

written order, contract or letter of intent

of a bona fide motor vehicle manufacturer in

the United States, and which is a fabricated

component originating in Canada, as defined

in subdivision (c)(vii) of this note, and

intended for use as original equipment in

the manufacture in the United States of a

motor vehicle, but the term does not include

trailers or articles to be used in their

manufacture.

\(3\) The term \"motor vehicle\", as used in this

note, means a motor vehicle of a kind

described in headings 8702, 8703 and 8704 of

chapter 87 (excluding an electric trolley bus

and a three-wheeled vehicle) or an automobile

truck tractor principally designed for the

transport of persons or goods.

\(4\) The term \"bona fide motor-vehicle

manufacturer\" means a person, who, upon

application to the Secretary of Commerce, is

determined by the Secretary to have produced

no fewer than 15 complete motor vehicles in

the United States during the previous 12

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months, and to have installed capacity in the

United States to produce 10 or more complete

motor vehicles per 40-hour week. The

Secretary of Commerce shall maintain, and

publish from time to time in the Federal

Register, a list of the names and addresses

of bona fide motor-vehicle manufacturers.

As previously stated, the tarp rollers in question are

accessories to motor vehicles. Therefore, the tarp rollers may

be \"original motor vehicle equipment\" under APTA. The definition

of \"original motor-vehicle equipment\" contains four sections

which must be met. The definition is written in the conjunctive,

therefore each aspect must be satisfied. The following is a list

of these sections:

1\. a Canadian article (originating in Canada under

General Note 3(c)(vii), the CFTA rule)

2\. the article is obtained from a supplier in Canada under

or pursuant to a written order, contract or letter of

intent of a bona fide motor vehicle manufacturer in

the United States, and

3\. the article is a fabricated component originating

in Canada (under CFTA rule), and

4\. the article is intended for use as original

equipment in the manufacture in the United States

of a motor vehicle, but the article is not a

trailer nor is it to be used in the manufacture of

a trailer.

APTA uses the originating goods test of the CFTA to

determine if goods are \"Canadian articles.\" Since the tarp

rollers were established in the above discussion to be

originating goods in Canada under General Note 3(c)(vii), the

tarp rollers are Canadian articles for purposes of APTA. The

tarp rollers are obtained from a supplier in Canada.

Additionally, the tarp rollers are fabricated components, and

they are not trailers nor are they used in the manufacture of

trailers. However, it is not stated if the rollers are supplied

pursuant to a contract with a bona fide motor vehicle

manufacturer in the United States. Nor is it established that

the tarp rollers are for use as original equipment in the

manufacture in the United States of a motor vehicle.

As stated in General Note 3(iii)(A)(4), a list of bona fide

motor-vehicle manufacturers is kept with the Department of

Commerce. One of these registered entities must be the party who

has contracted for or ordered in writing the tarp rollers. This

manufacturer must then use the tarp rollers in the manufacture of

the vehicle. Original motor vehicle equipment is that equipment

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which is incorporated into the vehicle at the time the vehicle

is made, not at a later date by a retailer or owner of the

vehicle. This manufacture must occur in the United States.

General Motors Corp. v. United States, 10 CIT 569 (1986),

involves the importation of radios from Canada. The radios were

installed at the retail level, not during the manufacture of the

motor vehicles. The court in this case, after reviewing the

legislative history, stated \"\[t\]he legislative history of the

APTA makes clear that the phrase \'intended for use as original

equipment in the manufacture in the United States of a motor

vehicle\' was meant by Congress to exclude from duty-free status

those items which were not used in the manufacture of

automobiles.\" (original emphasis) Id. at 576, citing S. Rep.

No. 782, 89th Cong., 1st Sess. 10, reprinted in 1965 U.S. Code

Cong. & Ad. New 3670, 3687-88.

The accessories in question, the tarp rollers, in order to

be \"original motor vehicle equipment\" for APTA purposes must be

used the in the manufacture of the motor vehicles to which they

will be attached. To obtain duty-free entry under APTA the tarp

rollers cannot be attached after the motor vehicles are built.

They must be included in the manufacturing process. Only if the

tarp rollers are purchased by a bona fide motor vehicle

manufacturer in the United States and used in the manufacture of

the motor vehicles will the tarp rollers be entitled to duty free

entry under APTA.

Issue 2: What is the appropriate classification of the

hydraulic tarp roller when imported installed on a truck of

U.S.-origin?

When a hydraulic tarp roller is installed onto a truck, the

tarp roller becomes a part of the truck and is \"absorbed\" into

the classification of the truck. The truck has a diesel engine

and a G.V.W. of approximately 28.18 metric tons. The

classification of the truck which incorporates the tarp roller is

subheading 8704.23.00, HTSUSA, as \"Motor vehicles for the

transport of goods\...Other, with compression-ignition internal

combustion piston engine (diesel or semi-diesel)..G.V.W.

exceeding 20 metric tons\...\"

United States-Canada Free Trade Agreement

If it can be shown that the United States truck which is

sent to Canada is an originating good when it arrives in Canada

under General Note 3(c)(vii)(B) as previously detailed, then the

truck with the attached tarp roller would also be an originating

good. As discussed above, the tarp roller is considered an

originating good under the CFTA. Articles which are considered

\"goods originating in the territory of Canada\" under General Note

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3(c)(vii) are those which are \"obtained or produced\" or

\"transformed\" in \"Canada and/or the United States\" (emphasis

added). Thus, goods made of originating components from both

the United States and Canada are considered to be \"goods

originating in the territory of Canada\" for purposes of General

Note 3(c)(vii). The United States truck with the Canadian tarp

roller would be eligible for duty preferences under the CFTA.

However, if the truck is not an originating good under the

CFTA when it arrives in Canada, then the truck with the attached

tarp roller is not an originating good. The truck would be a

third country product and the Canadian tarp roller would be

absorbed into the third country truck. Thus, if the truck is not

an originating good when it is exported to Canada, it will not be

an originating good when it is imported with the tarp roller.

The truck with the tarp roller would not be eligible for duty

preferences under the CFTA in such a scenario.

Automobile Products Trade Agreement

APTA grants duty-free status to motor vehicles imported from

Canada. The motor vehicle must be a Canadian article. Secondly,

the motor vehicle must be classified in heading 8702, 8703, 8704

or be an automobile truck tractor principally designed for the

transport of persons or goods. Finally, there must be a rate of

duty \"Free (B)\" in the \"Special\" subcolumn that corresponds to

the classification.

The trucks in question, which consist of a cab, a hoist, and

a tarp roller, are classified in subheading 8704.23.00. This

classification is under heading 8704. A \"B\" is present in the

\"Special\" subcolumn which corresponds to the classification.

Therefore, providing that the trucks are Canadian articles within

the meaning of General Note 3(c)(vii)(B), the trucks are motor

vehicles under APTA. A U.S.-origin truck is a \"Canadian article\"

for purposes of General Note 3(c)(vii) and 3(c)(iii). If the

trucks are Canadian articles, the trucks are eligible for duty

free status under APTA.

U.S. Goods Returned

Chapter 98, Subchapter II, HTSUSA, incorporates provisions

that apply to articles which are exported and then returned to

the United States. Subheading 9802.00.80, HTSUSA, provides a

partial duty exemption for:

\[a\]rticles assembled abroad in whole or in part of

fabricated components, the product of the United

States, which (a) were exported in condition ready for

assembly without further fabrication, (b) have not lost

their physical identity in such articles by change in

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form, shape, or otherwise, and (c) have not been advanced in

value or improved in condition abroad except by being assembled

and except by operations incidental to the assembly process, such

as cleaning, lubricating, and painting.

All three requirements of subheading 9802.00.80, HTSUSA, must be

satisfied before a component may receive a duty allowance. An

article entered under this tariff provision is subject to duty

upon the full cost or value of the imported assembled article,

less the cost or value of the U.S. components assembled therein,

upon compliance with the documentary requirements of section

10.24 Customs Regulations (19 CFR 10.24).

Section 10.16(a) Customs Regulations (19 CFR 10.16(a)),

provides that the assembly operation performed abroad may consist

of any method used to join or fit together solid components, such

as welding, soldering, riveting, bolting, force fitting, gluing,

laminating, sewing, or the use of fasteners.

From the information provided, it appears that the

operations performed in Canada, such as welding and bolting,

result in the secure joining of the Canadian components

(tarpaulin, tarp roller, tarp roller stand tubing, hydraulic

motor and hoses) to the U.S.-origin truck. Therefore, we are of

the opinion that the operations performed in Canada are

acceptable assembly operations pursuant to 19 CFR 10.16(a).

Issue 3: What is the appropriate classification of the

hydraulic tarp roller when imported installed on a truck of

Canadian-origin?

As discussed previously, when the tarp roller is placed onto

a truck the tarp roller is \"absorbed\" for classification

purposes into the truck\'s classification. The truck with the

attached tarp roller is a motor vehicle designed for the

transport of goods, with a diesel engine and a G.V.W. of 28.18

metric tons. The truck is classified in subheading 8704.23.00,

as \"Motor vehicles for the transport of goods\...Other, with

compression-ignition internal combustion piston engine (diesel or

semi-diesel)..G.V.W. exceeding 20 metric tons\...\"

United States-Canada Free Trade Agreement

The CFTA gives duty preferences to goods which originate in

Canada and/or the United States as defined by General Note

3(c)(vii). Should the Canadian truck be an originating good

within General Note 3(c)(vii)(B), then the truck would be

eligible for tariff preferences under the CFTA. This office does

not have adequate information to make this determination.

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Automobile Products Trade Agreement

APTA grants duty-free status to motor vehicles imported from

Canada. The motor vehicle must be a Canadian article. Secondly,

the motor vehicle must be classified in heading 8702, 8703, 8704

or be an automobile truck tractor principally designed for the

transport of persons or goods. Finally, there must be a rate of

duty \"Free (B)\" in the \"Special\" subcolumn that corresponds to

the classification.

The trucks in question, which consist of a cab, a hoist, and

a tarp roller, are classified in subheading 8704.23.00. This

classification is under heading 8704. A \"B\" is present in the

\"Special\" subcolumn which corresponds to the classification.

Therefore, providing that the trucks are Canadian articles within

the meaning of General Note 3(c)(vii)(B), the trucks are motor

vehicles under APTA. If the trucks are Canadian articles, the

trucks are eligible for duty free status under APTA. As stated

above, the information required to determine whether the trucks

are Canadian articles has not been presented.

HOLDING:

The tarp roller, when imported by itself, is classified in

subheading 8708.99.50, HTSUSA, as \"\...Other parts and

accessories\...Other\...Other\...\" The tarp rollers are an

originating good under General Note 3(c)(vii), and thus, the

tarp rollers are entitled to duty preferences under the CFTA,

providing the exporter has a valid exporter\'s certificate of

origin. The tarp rollers may be eligible for duty-free entry

under APTA if the tarp rollers are imported by a bona fide motor

vehicle manufacturer pursuant to a written contract or order, and

are used in the manufacture of automobiles in the United States.

When the tarp rollers are imported with a United States

truck the correct classification is subheading 8704.23.00,

HTSUSA, as \"Motor vehicles for the transport of goods\...Other,

with compression-ignition internal combustion piston engine

(diesel or semi-diesel)..G.V.W. exceeding 20 metric tons\...\"

If the United States truck is an originating good under General

Note 3(c)(vii) then the truck with the tarp roller would also be

an originating good, and the entire truck is eligible for tariff

preferences under the CFTA. The truck may be eligible for duty-

free entry under APTA if the truck is an originating good under

General Note 3(c)(vii). Securely joining the hydraulic tarp

roller components with the U.S.-origin truck is considered an

acceptable assembly operation. Therefore, the returned truck

with the tarp roller attached may be classified under subheading

9802.00.80 with an allowance in duty for the cost or the value of

the U.S.-origin truck. This allowance in duty is dependent upon

compliance with the documentary requirements 19 CFR 10.24. The

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duty should reflect the tarp rollers eligibility for tariff

preferences under the CFTA.

When the tarp rollers are imported on Canadian trucks, once

again the correct classification is subheading 8704.23.00,

HTSUSA, as \"Motor vehicles for the transport of goods\...Other,

with compression-ignition internal combustion piston engine

(diesel or semi-diesel)..G.V.W. exceeding 20 metric tons\...\" The

Canadian trucks with the attached tarp rollers may be eligible

for tariff preferences under the CFTA if the trucks are

originating goods as defined by General Note 3(c)(vii). No

information was submitted upon which this determination may be

made. Additionally, the classification of the trucks has a \"B\"

in the corresponding \"Special\" subcolumn, thus, this

classification is eligible for APTA consideration. If the

Canadian trucks are originating goods under General Note

3(c)(vii), the trucks would be eligible for duty-free entry under

APTA.

Sincerely,

John Durant, Director

Commercial Rulings Division