UNITED STATES INTERNATIONAL TRADE COMMEFSION
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`WASHINGTON, DC 20436
`December 17,1997
`
`The Honorable Dan Burton
`U.S. House of Representatives
`Washington, DC 205 15
`
`Dear Congressman Burton:
`
`Thank you for your letter of November 14, 1997, concerning the first
`draft of the international rules of origin for bearings that was published by the
`Commission.
`
`The Commission shares your concerns about the principles to be applied in
`determining the origin of bearings made fiom blanks or fiom unfinished,
`unassembled components. As negotiations in the World Customs Organization
`(WCO) continue, the United States seeks to achieve a rule that is both
`economically and technically feasible, as well as politically acceptable, to all
`countries involved.
`
`The Commission has drafted a residual rule to be applied to various products of
`Chapter 84, including bearings, when the change-of-classification rules do not
`recognize certain substantial transformations. This draR has been presented
`with other proposals to the Technical Committee on Rules of Origin of the
`WCO at its 10th session. We will also recommend that such a residual
`provision be taken up in the context of the ongoing discussions under the
`Committee on Rules of Origin of the World Trade Organization in Geneva. We
`have enclosed for your reference a copy of the proposed residual rule, as well as
`the currently proposed product specific rules for bearings.
`
`We will continue to apprise your stafFof our progress. If we can provide
`firther assistance, please do not hesitate to contact us.
`
`Sincerely,
`
`Marcia E. Miller
`
`Enclosure
`
`

`

`I. Residual rules. --
`
`a.
`
`Goods produced from an incomplete or unfinished article classifiable in
`the same headina or subheadina bv application of GIR 2(a).--Where
`goods are produced from an incomplete or unfinished (other than
`unassembled or disassembled) article which had the essential character
`of the complete or finished goods and was classifiable, by application of
`GIR 2(a), in the same heading or subheading as the complete or finished
`goods, origin of the presented goods shall be determined as follows:
`
`I.
`
`Goods produced from blanks--Where the goods were produced
`from a blank:
`
`(1)
`
`Provided all the following criteria are met, the country of
`origin of the goods shall be the country in which the blank
`was finished:
`
`(a)
`
`In its imported prefinished condition, the blank was
`not capable of functioning for its ultimate use and was
`not advanced beyond cleaning or working to remove
`flash, sprues, burrs or similar excess material, and
`
`(b)
`
`In the country in which the goods were finished:
`
`(i)
`
`The blank was configured to final shape by the
`removal of material (other than by honing or
`polishing ), or by bending, hammering,
`pressing, stamping or similar forming process;
`and
`
`(ii)
`
`The blank underwent one or more of the
`following processes:
`
`1)
`
`2)
`
`Hardening to a minimum hardness of 38
`degrees Rockwell C or equivalent
`standard of hardness; or
`
`Assembly with five or more parts (other
`than parts of general use as defined in
`Note 1(g) to Section XVI).
`
`(2)
`
`If the criteria of subparagraph (a) above are not satisfied,
`the country of origin of the goods shall be the country of
`origin of the blank.
`
`

`

`II.
`
`Goods produced from incomplete or unfinished articles. other than
`blanks.-Where the goods are produced from an incomplete or
`unfinished article, other than a blank, the origin of presented goods
`shall be the country of origin of the incomplete or unfinished article
`from which it was produced.
`
`b.
`
`Other rules for assembled aoods.-Where neither the product specific
`rules in the matrix nor the preceding legal notes are determinant of origin,
`the following shall apply:
`
`I.
`
`Oriain in the country of assembly.-Provided the follawing criteria
`are met, the goods shall originate in the country of assembly:
`
`(1)
`
`The assembly resulted in a device or apparatus capable of
`performing one or more new mechanical or electrical
`function(s), and either:
`
`(a)
`
`(b)
`
`The assembly involved 5 or more parts (other than
`parts of general use, as defined in Note l(g) to
`Section WI), or
`
`The assembly involved less than 5 parts (other than
`parts of general use, as defined in Note l(g) to
`Section XVI), and one or more of the parts (other than
`parts of general use, as defined in Note 1(g) to
`Section XVI), satisfies the product specific rules
`provided in the matrix as having origin in the country
`of assembly.
`
`(2)
`
`For purposes of the subparagraph (a) above, the following
`shall not be considered assembly operations:
`
`the attachment of machinery to a base,
`
`the installation of machinery or apparatus into
`cabinets or similar encasements,
`
`the attachment of dials, knobs, hand cranks, and
`other consumer-operated controls,
`
`the attachment of a power cord, or
`
`installation of batteries, accumulators or other articles
`not designed to become a permanent part of the
`
`

`

`good.
`
`ii.
`
`Other.-If the requirements of subparagraph (I) above are not met,
`the following shall apply:
`
`If the principal rule applicable to the goods in the product
`specific matrix includes an exception to a change of
`classification from a particular heading or subheading and a
`non-originating part classifiable in such heading or
`subheading was used in the assembly of the good, the
`country of origin of the good shall be the country of origin of
`such excepted part.
`
`In all other cases, the country of origin shall be the country
`in which the majority of the parts originated. If there is no
`majority, the country of origin shall be the country of origin of
`the part which appears last in the Nomenclature.
`
`

`

`~
`
`Description of goods
`
`~
`
`~
`
`Principal Rule
`
`Subsidiary Rule
`
`HS Code
`Number
`84.82
`
`8482. 'lo
`
`BALL OR ROLLER
`BEAR1 NGS.
`-Ball bearings
`
`CTSH, except from inner or
`outer races or rings of
`subheading ex 8482.99.b
`
`8482.20
`
`-Tapered roller bearings,
`including cone and
`tapered roller assemblies
`
`CTSH, except from inner or
`outer races or rings of
`subheading ex 8482.99.b
`
`8482.30
`
`-Spherical roller bearings
`
`CTSH, except from inner or
`outer races or rings of
`subheading ex 8482.99.b
`
`The country of origin
`shall be the country of
`origin of the inner and
`outer rings or races of
`subheading ex
`8482.99.b.
`The country of origin
`shall be the country of
`origin of the inner and
`outer rings or races of
`subheading ex
`8482.99.b.
`The country of origin
`shall be the country of
`origin of the inner and
`outer rings or races of
`subheading ex
`8482.99.b.
`
`

`

`Description of goods
`
`Principal Rule
`
`Subsidiary Rule
`
`HS Code
`Number
`8482.40
`
`-Needle roller bearings
`
`CTSH, except from inner or
`outer races or rings of
`subheading ex 8482.99.b
`
`The country of origin
`shall be the country of
`origin of the inner and
`outer rings or races of
`subheading ex
`8482.99. b.
`The country of origin
`shall be the country of
`origin of the inner and
`outer rings or races of
`subheading ex
`8482.99. b.
`The country of origin
`shall be the country of
`origin of the inner and
`outer rings or races of
`subheading ex
`8482.99. b.
`
`8482.50
`
`-0t her cy1 i ndrical rol I er
`bearings
`
`CTSH, except from inner or
`outer races or rings of
`subheading ex 8482.99.b
`
`8482.80
`
`-Other, including
`combined bal Ilrol ler
`bearings
`
`CTSH, except from inner or
`outer races or rings of
`subheading ex 8482.99.b
`
`8482.91
`
`8482.99
`ex 8482.99.a
`
`-Parts:
`-- Balls, needles and
`i
`rollers
`I -- Other
`i ---
`Rings or races, not
`ex 8482.99.b ' --- Other
`heat treated
`
`I
`
`I
`
`CTH
`
`See split subheadings
`CTH
`
`CTH
`
`

`

`P
`
`m asrnlcr. INDIANA
`’ DANBURToN
`
`INTERNATIONAL RELATIONS
`
`SUBCOMMITTEES
`INTERNATCNAL OPERATIONS
`AND HUMAN RIGHTS
`WESTERN HEMISPHERE
`
`CZongrus of the Unittd Butts
`Rouac of Reprcscntatitlm
`Washington, BE rorir-ifo6
`November 14,1997
`
`2185 RAVEURN BUILDING
`WASHINGTON. DC 205151406
`TELEPHONE:
`(2021 225-2278
`
`DISTRICT OFFICES
`;1900 KEYSTONE AT THE CROSSING
`S u m 1050
`
`INDIANAPOLIS, IN 46240
`rELEPHONE (317) 848-0201
`TOLL.FREE (8001 382-6020
`- _ _
`435 EAST MAIN STREET
`SUITE J 3
`GREENWOOD. IN 48142
`TELEPHONE (317) 882-3840
`-_
`TOLL-FREE (800) 678-3642
`WORLDWIDE WEB PAGE
`linp //www houss govlburtonl
`
`The Honorable Marcia E. Miller
`Chairman
`U.S. International Trade Commission
`500 E Street, SW
`Washington, D.C. 20436
`
`Dear Chairman Miller:
`I am writing to express my concerns about the Commission’s recezt draft rdes of origin
`for bearings, Chapkr 84 or the Harmonized System of classification, which are to form the basis
`for the U.S. proposal tb the Technical Committee on Rules of Origin of the World Customs
`Organization.
`
`NUV i 8 rrr-
`c6S
`
`The most critical components of a completed bearing are the inner and outer rings,
`because the rings impart to a bearing its anti-fiction qualities. The manufacturing processes of
`heat treatment grinding and honing, in turn impart to the rings their anti-friction character. The
`Commission’s proposed tariff shift rule for bearing parts, classified in HS 8482.91-99, fails to
`recognize this fact and should be changed.
`I find the Commission’s draft somewhat surprising, since it clearly conflicts with well-
`established principles of substantial transformation. Perhaps the Commission was guided by
`interim NAFTA country-of-origin rules on this issue, but those rules, based on a court decision
`that has nothing to do with bearings, or anti-fiction attributes, should not displace common-
`sense. A’bearing ring, absent heat treatment, grinding, and honing, is worthless as an anti-
`friction device. Therefore, I would ask that the final U.S. proposal on the rules of origin for
`bearings fully recognize that heat treatment, followed by grinding and honing in the same
`country, confer origin on inner and outer rings, and hence on the finished bearings that contain
`those rings.
`
`It would be greatly appreciated if your staff could keep my Washington office abreast on
`the status of this inquiry. Any questions you may have can be referred to Jason Love11 of my
`staff, who can be contacted by phone at (202) 225-2276. Thank you in advance for your
`assistance with this matter.
`
`Member of Congress
`
`