CSMS Message: 01-000115

TO: ALL ABI BROKERS.

FROM: JOHN LUI

SUBJECT: NON-COMPLIANCE OF IMPORTATIONS OF MACHINE TOOLS UNDER HTS 8466

DATE: 01/19/2001

ABI DAILY MESSAGE

THE PURPOSE OF THIS ABI DAILY MESSAGE IS CALL ATTENTION TO A
PATTERN OF DISCREPANCIES AND NON-COMPLIANCE INVOLVING HTS 8466,
WHICH HAVE LED TO AN UNACCEPTABLE NATIONAL COMPLIANCE RATE OF
75.96% FOR FY 99. HTS HEADING 8466 COVERS PARTS AND
ACCESSORIES SUITABLE FOR USE SOLELY OR PRINCIPALLY WITH THE
MACHINE OF HEADING 8456 TO 8465, INCLUDING WORK OR TOOL HOLDERS,
SELF-OPENING DIEHEADS, DIVIDING HEADS AND OTHER SPECIAL
ATTACHMENTS FOR MACHINES TOOLS; TOOL HOLDERS FOR ANY TYPE OF
TOOL FOR WORKING IN THE HAND.

RESEARCH CONDUCTED BY THE U.S. CUSTOMS STRATEGIC TRADE CENTER IN
SOUTH FLORIDA, WHICH HAS INCLUDED A REVIEW OF ALL NON-COMPLIANT
IMPORTATIONS OF MACHINE TOOLS UNDER HTS 8466, IMPORTED FROM
JANUARY 1, 1999, TO DATE, HAS IDENTIFIED SEVERAL SIGNIFICANT
PATTERNS TO THESE DISCREPANCIES:

1) PARTS AND ACCESSORIES FOR MACHINE TOOLS ARE BEING ENTERED
UNDER HEADING 8466 WHICH ARE CLASSIFIED ELSEWHERE.

IN ACCORDANCE WITH THE GENERAL RULES OF INTERPRETATION (GRI'S)
AND THE RELEVANT LEGAL NOTES (IN THIS CASE, THE NOTES TO SECTION
XVI AND CHAPTER 84), CERTAIN PARTS AND ACCESSORIES ARE EXCLUDED
FROM CLASSIFICATION IN HEADING 8466. FOR EXAMPLE:

SECTION XVI NOTE 1(G) EXCLUDES PARTS OF GENERAL USE (SUCH AS
NUTS, BOLTS, SCREWS AND SPRINGS), NOTE 1(M) EXCLUDES ARTICLES OF
CHAPTER 90 SUCH AS MEASURING DEVICES, LENSES, ETC. AND NOTE 1(O)
EXCLUDES INTERCHANGEABLE TOOLS OF HEADING 8207.

SECTION XVI, NOTE 2(A) INDICATES THAT PARTS INCLUDED IN ANY OF
THE HEADINGS OF CHAPTERS 84 AND 85 ARE IN ALL CASES TO BE
CLASSIFIED IN THEIR RESPECTIVE HEADINGS. THIS APPLIES TO ITEMS
SUCH AS BEARINGS, MOTORS, PUMPS, VALVES, CONTROLS, ETC. THE
EXPLANATORY NOTES TO SECTION XVI ADD THAT THESE ITEMS ARE SO
CLASSIFIED "EVEN IF SPECIALLY DESIGNED TO WORK AS PART OF A
SPECIFIC MACHINE".

(2) FULLY MACHINED CAST IRON PARTS OF MACHINE TOOLS ARE BEING
ENTERED AS PARTS THAT HAVE NOT BEEN ADVANCED BEYOND CLEANING,
AND MACHINED ONLY FOR THE REMOVAL OF FINS, GATES, SPRUES AND
RISERS OR TO PERMIT LOCATION IN FINISHING MACHINERY.

UNDER HTS HEADING 8466, THERE ARE EIGHT DUTY-FREE PROVISIONS FOR
MACHINE TOOL PARTS THAT ARE MADE OF CAST IRON AND NOT ADVANCED
BEYOND CLEANING, AND MACHINED ONLY FOR THE REMOVAL OF FINS,
GATES, SPRUES AND RISERS OR TO PERMIT LOCATION IN FINISHING
MACHINERY. THESE ARE:

8466.91.1000 8466.93.1530 8466.93.6030 8466.94.2000
8466.92.1000 8466.93.1560 8466.93.6060 8466.94.4000

ANY MACHINING BEYOND THAT PERFORMED FOR THE PURPOSE OF REMOVING
FINS, GATES, SPRUES AND RISERS OR TO PERMIT LOCATION IN
FINISHING MACHINERY WOULD EXCLUDE THAT PART FROM THE ABOVE DUTY
FREE PROVISIONS.

THERE ARE ONLY A SMALL NUMBER OF CAST IRON COMPONENTS UTILIZED
IN THE CONSTRUCTION OF MACHINE TOOLS. THE BED, BASE, TABLE,
COLUMN, CRADLE, FRAME, BOLSTER, CROWN, ROD, SLIDE, TAILSTOCK,
HEADSTOCK, AND WELDMENT ARE CITED IN THE TARIFF SCHEDULE AS
COMPONENTS THAT MAY BE MADE OF CAST IRON. TO QUALIFY FOR DUTY
FREE TREATMENT, HOWEVER, CAST IRON PARTS CANNOT BE ADVANCED
BEYOND CLEANING ETC. THERE ARE VERY FEW OTHER MACHINERY
COMPONENTS MADE OF CAST IRON THAT WOULD QUALIFY FOR THESE HTS
NUMBERS. EVERY CONCEIVABLE MACHINE PART, I.E., WIRING,
COMPUTERS, ETC., IS BEING ENTERED IN ERROR UNDER THESE CAST-IRON
CLASSIFICATIONS.

ON JANUARY 11,2000, THE SOUTH FLORIDA STRATEGIC TRADE CENTER
ISSUED INFORMED COMPLIANCE LETTERS TO 75 SIGNIFICANT IMPORTERS
OF MACHINE TOOLS UNDER HTS 8466. THE PURPOSE OF THESE LETTERS
WAS TO INFORM THE IMPORTERS OF OUR CONCERNS AND THE CURRENT
TREND OF DISCREPANCIES. THESE FIRMS WERE ALSO NOTIFIED THAT IF
THEIR COMPANY'S INDIVIDUAL IMPORT TRANSACTIONS ARE NOT FREE FROM
THESE TYPE OF ERRORS OUTLINED IN THE LETTERS, AND THEY DO NOT
TAKE IMMEDIATE CORRECTIVE ACTIONS DESIGNED TO FOSTER COMPLIANCE,
THEIR COMPANY COULD FIND ITSELF SUBJECT TO INCREASED ENTRY
REVIEWS AND/OR CARGO EXAMINATIONS, PENALTIES, OR OTHER REMEDIAL
ACTIONS.

THIS ABI DAILY MESSAGE IS BEING PROVIDED TO HELP MAXIMIZE
COMPLIANCE AND AVOID THE ERRORS WHICH ARE COMMON TO MERCHANDISE
CLASSIFIED UNDER HTS 8466. FOR FURTHER INFORMATION, PLEASE
CONTACT THE IMPORT SPECIALISTS AT YOUR LOCAL PORT OF ENTRY, OR
INTERNATIONAL TRADE SPECIALIST JEFFREY SAUM AT THE SOUTH FLORIDA
STRATEGIC TRADE CENTER AT (954) 327-2814.