HQ 957188: Wire Harnesses; automotive good; Article 509; NAFTA; copper rod; 7407.10.50; insulated copper wire; 8544.40.00; non-insulated copper wire; 7408; plastic seals; 4016.93.00; General Note 12(b)(ii); originating good; non-originating good; tariff shift requirement; General Note 12(t)/85.147 (A) and (B); General Note 12(f); de minimis; 7 percent; Section 2, 5 and 9(1) of the NAFTA Rules of Origin Regulation; traced material; light-duty automotive good; light-duty vehicle; Schedule IV of NAFTA Rules of Origin Regulation; non-originating material's value

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 957188

                         February 9, 1995

CLA-2 CO:R:C:M 957188 KCC

CATEGORY:  Classification

TARIFF NO.:  8544.30

Elizabeth J. Vann, Esq.
Kemp, Smith, Duncan & Hammond, P.C.
P.O. Box 2800
El Paso, Texas 79901-1441

RE:  Wire Harnesses; automotive good; Article 509; NAFTA; copper
     rod; 7407.10.50; insulated copper wire; 8544.40.00; non-insulated copper wire; 7408; plastic seals; 4016.93.00;
     General Note 12(b)(ii); originating good; non-originating
     good; tariff shift requirement; General Note 12(t)/85.147
     (A) and (B); General Note 12(f); de minimis; 7 percent;
     Section 2, 5 and 9(1) of the NAFTA Rules of Origin
     Regulation; traced material; light-duty automotive good;
     light-duty vehicle; Schedule IV of NAFTA Rules of Origin
     Regulation; non-originating material's value

Dear Ms. Vann:

     This is in response to your letter dated October 20, 1994,
on behalf of United Technologies Automotive, Inc. (UTA),
concerning the applicability of the North American Free Trade
Agreement (NAFTA) to wire harnesses when imported into the United
States.

FACTS:

     UTA's Mexican subsidiary will be manufacturing wire
harnesses, which are to be imported into the U.S., for use as
original equipment in the production of a good provided for under
subheading 8702.10.60 or 8702.90.60, HTSUS, or subheadings
8703.21 through 8703.90, 8704.21 or 8704.31, HTSUS.  UTA
manufactures hundreds of different models of wire harnesses in
which the exact types and numbers of components can vary from
model to model.  You state that the following six fact situations
represent the situations encountered by UTA in its manufacturing
operations:

1.   Copper rod classifiable under subheading 7407.10.50, HTSUS,
     is imported into the NAFTA territory from outside the NAFTA
     territory, and processed in the NAFTA territory into
     insulated copper wire classifiable under subheading
     8544.49.00, HTSUS.  The insulated copper wire is then
     purchased by UTA and manufactured in Mexico into wire
     harnesses.  The wire harnesses will then be imported into
     the U.S. by UTA under subheading 8544.30.00, HTSUS.

     We are asked to assume that the copper rod imported into the
     NAFTA territory is not an "originating good."  Additionally,
     we are asked to assume that all other components of the wire
     harnesses meet the tariff shift requirements and/or are
     "originating goods".

2.   Insulated copper wire classifiable under subheading
     8544.49.00, HTSUS, is imported into the NAFTA territory from
     outside the NAFTA territory.  The insulated copper wire is
     then purchased by UTA and manufactured in Mexico into wire
     harnesses. The wire harnesses will then be imported into the
     U.S. by UTA under subheading 8544.30.00, HTSUS.

     We are asked to assume that the insulated copper wire,
     imported into the NAFTA territory is not an "originating
     good."  Additionally, we are asked to assume that all other
     components of the wire harnesses, except for certain plastic
     seals classifiable under subheading 4016.93.00, HTSUS, meet
     the tariff shift requirements and/or are "originating
     goods".  

     We are also asked to assume that the value of the insulated
     copper wire which is imported into the NAFTA territory
     constitutes 7% of the total cost of each wire harness and
     that the value of the non-originating plastic seals which
     are incorporated into the wire harness constitutes 2% of the
     total cost of the wire harness, where there is no
     transaction value for the good under section 2(1) of
     Schedule III or the transaction value of the good is
     unacceptable under section 2(2) of Schedule III. 

3.   Insulated copper wire classifiable under subheading
     8544.49.00, HTSUS, is imported into the NAFTA territory from
     outside the NAFTA territory.  The insulated copper wire is
     then purchased by UTA and manufactured in Mexico into wire
     harnesses.  The wire harnesses will then be imported into
     the U.S. by UTA under subheading 8544.30.00, HTSUS.

     We are asked to assume that the insulated copper wire,
     imported into the NAFTA territory is not an "originating
     good."  Additionally, we are asked to assume that all 

     other components of the wire harnesses meet the tariff shift
     requirements and/or are "originating goods".

     We are also asked to assume that the value of the non-originating wire insulated copper wire exceeds the de
     minimis amount found in General Note 12(f), HTSUS.

4.   Insulated copper wire classifiable under subheading
     8544.49.00, HTSUS, is imported into the NAFTA territory from
     outside the NAFTA territory.  Non-insulated copper wire
     classifiable under heading 7408, HTSUS, is imported into the
     NAFTA territory from outside of the NAFTA territory.  The
     non-insulated copper wire is insulated in the NAFTA
     territory to form insulated copper wire classifiable under
     subheading 8544.49.00, HTSUS.  The imported insulated copper
     wire and the NAFTA manufactured insulated copper wire are
     then purchased by UTA and manufactured in Mexico into wire
     harnesses.  The wire harnesses which include both imported
     insulated copper wire and NAFTA manufactured insulated
     copper wire, will then be imported into the U.S. by UTA
     under subheading 8544.30.00, HTSUS.

     We are asked to assume that the insulated copper wire and
     the non-insulated copper wire, imported into the NAFTA
     territory are not "originating goods."  Additionally, we are
     asked to assume that all other components of the wire
     harnesses meet the tariff shift requirements and/or are
     "originating goods".

     We are also asked to assume that the value of the non-originating insulated copper wire and the non-insulated
     copper wire exceeds the de minimis amount found in General
     Note 12(f), HTSUS.

5.   Insulated copper wire classifiable under subheading
     8544.49.00, HTSUS, is imported into the NAFTA territory from
     outside the NAFTA territory.  Copper rod classifiable under
     subheading 7407.10.50, HTSUS, is imported into the NAFTA
     territory from outside of the NAFTA territory.  The copper
     rod is extruded in the NAFTA territory to form copper wire
     and then insulated to form insulated copper wire
     classifiable under subheading 8544.49.00, HTSUS.  The
     imported insulated copper wire and the NAFTA manufactured
     insulated copper wire are then purchased by UTA and
     manufactured in Mexico into wire harnesses.  The wire
     harnesses which include both imported insulated copper wire
     and NAFTA manufactured insulated copper wire, will then be
     imported into the U.S. by UTA under subheading 8544.30.00,
     HTSUS.

     We are asked to assume that the insulated copper wire and
     the copper rod, imported into the NAFTA territory are not
     "originating goods."  Additionally, we are asked to assume
     that all other components of the wire harnesses meet the
     tariff shift requirements and/or are "originating goods".

     We are also asked to assume that the value of the non-originating insulated copper wire exceeds the de minimis
     amount found in General Note 12(f), HTSUS.

6.   Insulated copper wire classifiable under subheading
     8544.49.00, HTSUS, is imported into the NAFTA territory from
     outside the NAFTA territory.  Non-insulated copper wire
     classifiable under heading 7408, HTSUS, is manufactured in
     the NAFTA territory from NAFTA origin ore and/or NAFTA
     origin copper rod.  The imported insulated copper wire and
     the NAFTA manufactured non-insulated copper wire are then
     purchased by UTA and manufactured in Mexico into wire
     harnesses.  The wire harnesses which include both imported
     insulated copper wire and NAFTA manufactured non-insulated
     copper wire, will then be imported into the U.S. by UTA
     under subheading 8544.30.00, HTSUS.

     We are asked to assume that the insulated copper wire 
     imported into the NAFTA territory is are not an "originating
     good."  Additionally, we are asked to assume that all other
     components of the wire harnesses meet the tariff shift
     requirements and/or are "originating goods".

     We are also asked to assume that the value of the non-originating insulated copper wire exceeds the de minimis
     amount found in General Note 12(f), HTSUS.

     With regards to the above fact situations, we are asked to
disregard the regional value content requirement.  You state that
UTA is not requesting guidance regarding the calculation of
regional value content.  UTA is fully aware that it must comply
with any applicable regional value content requirements.  The
above fact situations are representative situations which
illustrate the NAFTA legal issues on which UTA needs guidance. 
UTA is specifically concerned with the application of the NAFTA
tariff shift rules and the application of the de minimis rules to
the wire harnesses.  

ISSUE:

     Are the wire harnesses considered to be "originating goods"
pursuant to the rules of origin in General Note 12(b)(ii), HTSUS?



LAW AND ANALYSIS:

     To be eligible for tariff preferences under the NAFTA, goods
must be "originating goods" within the rules of origin in General
Note 12(b), HTSUS.  In this case, the method by 

which the wire harnesses imported into the United States may be
"goods originating in the territory of a NAFTA party" is General
Note 12(b)(ii), HTSUS.   General Note 12(b)(ii), HTSUS, states
that to be "goods originating in the territory of a NAFTA party":

(ii) they have been transformed in the territory of Canada,
     Mexico and/or the United States so that--

     (A)  except as provided in subdivision (f) of this note,
          each of the non-originating materials used in the
          production of such goods undergoes a change in tariff
          classification described in subdivision (r), (s) and
          (t) of this note or the rules set forth therein, or 

     (B)  the goods otherwise satisfy the applicable requirements
          of subdivision (r), (s) and (t) where no change in
          tariff classification is required, and the goods
          satisfy all other requirements of this note....

     In the above-described fact situations, we must examine
whether the wire harnesses are "transformed in the territory of
Canada, Mexico and/or the United States" pursuant to General Note
12(b)(ii)(A), HTSUS.  As the wire harnesses are classified under
subheading 8544.30.00, HTSUS, a transformation is authorized by
General Note 12(t)/85.147, HTSUS, which states:

(A)  A change to subheadings 8544.11 through 8544.60 from any
     subheading outside that group, except from headings 7408,
     7413, 7605 or 7614; or

(B)  A change to subheadings 8544.11 through 8544.60 from
     headings 7408, 7413, 7605 or 7614, whether or not there is
     also a change from any other subheading, including another
     subheading within subheadings 8544.11 through 8544.60,
     provided there is also a regional value content of not less
     than:

     (1)  60 percent where the transaction value method is used,
          or

     (2)  50 percent where the net cost method is used.

The wire harnesses must meet the requirements of either General
Note 12(t)/85.147(A), HTSUS, or General Note 12(t)/85.147(B),
HTSUS, to qualify as an "originating good"; they do not have to
meet both tests.  

                        Fact Situation #1

     In this situation, the non-originating material, i.e.,
copper rod, is classifiable under subheading 7407.10.50, HTSUS. 
Additionally, we are asked to assume that all other components of
the wire harnesses meet the tariff shift requirements and/or are
"originating goods".  Since the copper rod is not classified
within subheadings 8544.11 through 8544.60,  or headings 7408,
7413, 7605 or 7614, a change in tariff classification occurs. 
The wire harnesses manufactured from non-originating copper rod
meet the tariff shift requirements of General Note
12(t)/85.147(A), HTSUS, and, therefore, are considered to be
"originating goods" pursuant to General Note 12(b)(ii), HTSUS.

                        Fact Situation #2

     In this situation, the non-originating material, i.e.,
insulated copper wire and plastic seals, are classifiable under
subheading 8544.49.00, and 4016.93.00, HTSUS, respectively. 
Additionally, we are asked to assume that all other components of
the wire harnesses meet the tariff shift requirements and/or are
"originating goods".  Since the plastic seals are not classified
within subheading 8544.11 through 8544.60, or headings 7408,
7413, 7605 or 7614, a change in tariff classification occurs for
the plastic seals.  A change in tariff classification does not
occur for the insulated copper wire because it is classified
within subheading 8544.49, HTSUS.  

     However, General Note 12(f), HTSUS, provides a de minimis
rule for non-originating materials that do not undergo a required
tariff change.  General Note 12(f), HTSUS, states:

(i)  ...a good shall be considered to be an originating good if
     the value of all non-originating materials used in the
     production of the good that do not undergo an applicable
     change in tariff classification set out in subdivision (t)
     of this note is not more than 7 percent of the transaction
     value of the good, adjusted to a F.O.B. basis, or, if the
     transaction value is unacceptable under section 402(b) of
     the Tariff Act of 1930, as amended, the value of all such
     non-originating materials is not more than 7 percent of the
     total cost of the good, provided that--



     (A)  if the good is subject to a regional value-content
          requirement, the value of such non-originating
          materials shall be taken into account in calculating
          the regional value content of the good; and

     (B)  the good satisfies all other applicable requirements of
          this note.

     Section 5 of the NAFTA Rules of Origin Regulations, Appendix
to Part 181, Customs Regulations (19 CFR Appendix to Part 181),
further describes the de minimis rule:

(1)  Except as otherwise provided in subsection (4), a good shall
     be considered to originate in the territory of a NAFTA
     country where the value of the non-originating materials
     that are used in the production of the good and that do not
     undergo an applicable change in tariff classification as a
     result of production occurring entirely in the territory of
     one or more of the NAFTA countries is not more than seven
     percent

     (a)  of the transaction value of the good determined in
          accordance with Schedule II with respect to the
          transaction in which the producer of the good sold the
          good, adjusted to an F.O.B. basis, or

     (b)  of the total cost of the good, where there is no
          transaction value for the good under section 2(1) of
          Schedule III or the transaction value of the good is
          unacceptable under section 2(2) of that Schedule,

provided that, 

     c)   if, under the rule in which the applicable change in
          tariff classification is specified, the good is also
          subject to a regional value-content requirement, the
          value of those non-originating materials shall be taken
          into account in calculating the regional value content
          of the good in accordance with the method set out for
          that good, and

     (d)  the good satisfies all other applicable requirements of
          this Appendix...

     In this situation, the non-originating material which does
not satisfy the tariff shift requirement is the insulated copper
wire.  You asked us to assume that the insulated copper wire
which is imported into the NAFTA territory from outside of the
NAFTA territory constitutes 7 percent of the total cost of each
wire harness and that all other components of the wire harnesses
meet the tariff shift requirements and/or are "originating
goods".   Assuming 

these facts, the value of all the non-originating materials that
do not undergo an applicable change in tariff classification is
not more than 7 percent of the total cost of the wire harness.  

     General Note 12(f), HTSUS, states that the value of all non-originating materials which do not undergo a change in tariff
classification must not be more than 7 percent of the transaction
value of the good, adjusted to a F.O.B. basis, or, if the
transaction value is unacceptable under section 402(b) of the
Tariff Act of 1930, as amended, the value of all such non-originating materials is not more than 7 percent of the total
cost of the good....  We note that you have supplied us with
total cost values without any indication of why the transaction
value is unacceptable.  Therefore, we are additionally asked to
assume that the transaction value is unacceptable under section
402(b) of the Tariff Act of 1930, as amended.  We proceed under
this assumption without regard to whether the actual facts
require otherwise.

     We are of the opinion that the wire harnesses in this
situation are "originating goods."  The plastic seals meet the
tariff shift requirement of General Note 12(t)/85.147(A), HTSUS,
and are considered to be "originating goods."   Therefore, the
value of the plastic seals is not taken into account when
calculating the de minimis exception.  The insulated copper wire
does not meet the tariff shift requirement, but it is valued at 7
percent of the total cost of each wire harness.  The value of all
the non-originating materials used in producing the wire
harnesses which do not undergo the change in tariff
classification is not more than 7 percent of the total cost of
the wire harnesses.  Therefore, pursuant to the de minimis
exception, the insulated copper wire is ignored and the wire
harnesses meet the tariff shift requirements of General Note
12(t)/85.147(A), HTSUS, and, therefore are considered
"originating goods" pursuant to General Note 12(b)(ii), HTSUS.  

                        Fact Situation #3

     In this situation, insulated copper wire imported in the
NAFTA territory is valued over 7 percent and is classifiable
under subheading 8544.49.00, HTSUS.  We are asked to assume that
all other components of the wire harnesses meet the tariff shift
requirements and/or are "originating goods".  Since the insulated
copper wire is classified within subheadings 8544.11 through
8544.60, a change in tariff classification does not occur
pursuant to General Note 12(t)/85.147(A), HTSUS.

     We are of the opinion that the wire harnesses do meet the
tariff shift requirement of General Note 12(t)/85.147(B), HTSUS.
The proper interpretation of the tariff shift requirement of
General Note 12(t)/85.147(B), HTSUS, is that the non-originating
materials must change to subheadings 8544.11 through 8544.60,
from any other subheading within that group or headings 7408,
7413, 7605 or 7614, whether or not there is also a change from
any other subheading, provided the regional value content
requirement is met.  The imported insulated copper wire, which is
classifiable under subheading 8544.49.00, HTSUS, meets the tariff
shift requirement.

     However, the wire harnesses must also meet the regional
value content requirement, i.e., "(a) 60 percent where the
transaction value method is used, or (b) 50 percent where the net
cost method is used."

     General Note 12(d), HTSUS, sets forth the following special
rule for calculating the regional value content of automotive
goods:

(i)  For purposes of calculating the regional value content under
     the net cost method set out in subdivision (c)(ii) of this
     note for--

     (A)  a good that is a motor vehicle provided for in tariff
          item 8702.10.60 or 8702.90.60, or subheadings 8703.21
          through 8703.90, inclusive, 8704.21 or 8704.31; or

     (B)  a good provided for in the tariff items listed in Annex
          403.1 where the good is subject to a regional value-content requirement and is for use as original
          equipment in the production of a good provided for in
          tariff items 8702.10.60 or 8702.90.60, or subheadings
          8703.21 through 8703.90, inclusive, 8704.21 or 8704.31,

     the value of non-originating materials used by the producer
     in the production of the good shall be the sum of the values
     of non-originating materials, determined in accordance with
     subdivision (c)(vii) of this note at the time the non-originating materials are received by the first person in
     the territory of Canada, Mexico or the United States who
     takes title to them; that are imported from outside the
     territories of Canada, Mexico and the United States under
     the tariff items listed in Annex 403.1 to the NAFTA and that
     are used in the production of the good or that are used in
     the production of any material used in the production of the
     good.

     Section 9(1) of the NAFTA Rules of Origin Regulations
provides the following guidance regarding the regional value
content of automotive goods:

     For purposes of calculating the regional value content of a
     light-duty automotive good under the net cost method, the
     value of non-originating materials used by the producer 

     in the production of the good shall be the sum of the values
     of the non-originating materials that are traced materials
     and are incorporated into the good.

     Traced material is defined in Section 8 of the NAFTA Rules
of Origin Regulations as:

     a material, produced outside the territories of the NAFTA
     countries, that is imported from outside the territories of
     the NAFTA countries and is, when imported, of a tariff
     provision listed in Schedule IV.

     Light-duty automotive good is defined in Section 2 of the
NAFTA Rules of Origin Regulations as:

     a light-duty vehicle or a good of a tariff provision listed
     in Schedule IV that is subject to a regional value-content
     requirement and is for use as original equipment in the
     production of a light-duty vehicle.

     Light-duty vehicle is defined in Section 2 of the NAFTA
Rules of Origin Regulations as:

     a motor vehicle provided for in any of tariff items
     8702.10.60 and 8702.10.60 (vehicles for the transport of 15
     or fewer persons) and subheadings 8703.21 through 8703.90,
     8704.21 and 8704.31.

     Schedule IV (LIST OF TARIFF PROVISIONS FOR THE PURPOSES OF
SECTION 9 OF THE APPENDIX) of the NAFTA Rules of Origin
Regulations lists subheading 8544.30, HTSUS.  Therefore, the wire
harnesses met the definition of a light duty automotive good
pursuant to Section 2 of the NAFTA Rules of Origin Regulations. 
To calculate the regional value content of the wire harnesses
under the net cost method, we must calculate the value of the
non-originating materials.  Pursuant to section 9(1) of the NAFTA
Rules of Origin Regulations, the value of the non-originating
materials is the sum of the values of the non-originating
materials that are traced materials incorporated into the wire
harnesses.  In this situation the non-originating material is the
insulated copper wire.  We note that under the facts there may
also be other non-originating materials.  We will assume that
these non-originating materials are not "traced materials."   The
insulated copper wire is not listed in schedule IV of the NAFTA
Rules of Origin Regulations and, therefore, is not a traced
material.  Thus, the value of the insulated copper wire is not
included in the value of the non-originating goods when
calculating the regional value content but it is included in the
net cost of the wire harnesses.  

     In this situation, the value of the non-originating
materials is 0 and, therefore, the regional value content is
100%.  The wire harnesses in this situation meet the requirements
of General Note 12(t)/85.147(B), HTSUS, and are considered
"originating goods" pursuant to General Note 12(b)(ii), HTSUS.

                        Fact Situation #4

     In this situation, insulated copper wire imported in the
NAFTA territory is valued over 7 percent and is classifiable
under subheading 8544.49.00, HTSUS.  Non-insulated copper wire
imported into the NAFTA territory is valued over 7 percent and is
classifiable under heading 7408, HTSUS.  We are asked to assume
that all other components of the wire harnesses meet the tariff
shift requirements and/or are "originating goods".  Since the
insulated copper wire and non-insulated copper wire are
classified within subheadings 8544.11 through 8544.60 and heading
7408, a change in tariff classification does not occur pursuant
to General Note 12(t)/85.147(A), HTSUS.
 
     We are of the opinion that the wire harnesses do meet the
tariff shift requirement of General Note 12(t)/85.147(B), HTSUS. 
As stated previously, the proper interpretation of the tariff
shift requirement of General Note 12(t)/85.147(B), HTSUS, is that
the non-originating materials must change to subheadings 8544.11
through 8544.60 from any other subheading within that group or
headings 7408, 7413, 7605 or 7614, whether or not there is also a
change from any other subheading, provided the regional value
content requirement is met.    The insulated copper wire which is
classified under subheading 8544.49.00, HTSUS, meets the tariff
shift requirment and the imported non-insulated copper wire,
which is classifiable under heading 7408, HTSUS, also meets the
tariff shift requirement.  The tariff shift requirement of
General Note 12(t)/85.147(B), HTSUS, has been met.   

     However, the wire harnesses must also meet the regional
value content requirement, i.e., "(a) 60 percent where the
transaction value method is used, or (b) 50 percent where the net
cost method is used."

     Schedule IV (LIST OF TARIFF PROVISIONS FOR THE PURPOSES OF
SECTION 9 OF THE APPENDIX) of the NAFTA Rules of Origin
Regulations lists subheading 8544.30, HTSUS.  Therefore, the wire
harnesses met the definition of a light duty automotive good
pursuant to Section 2 of the NAFTA Rules of Origin Regulations. 
To calculate the regional value content of the wire harnesses
under the net cost method, we must calculate the value of the
non-originating materials.  Pursuant to section 9(1) of the NAFTA
Rules of Origin Regulations, the value of the non-originating
materials is the sum of the values of the non-originating
materials that are traced materials incorporated into the wire
harnesses.  In this situation the non-originating materials are
the insulated copper wire and the non-insulated copper wire.  We
note that under the facts there may also be other non-originating
materials.  We will assume that these non-originating materials
are not "traced materials."  The insulated copper wire and non-insulated copper wire are not listed in schedule IV of the NAFTA
Rules of Origin Regulations and, therefore, are not traced
materials.  Thus, the value of the insulated copper wire and the
non-insualted copper wire are not included in the value of the
non-originating goods when calculating the regional value content
but they are included in the net cost of the wire harnesses.  

     In this situation, the value of the non-originating
materials is 0 and, therefore, the regional value content is
100%.  The wire harnesses in this situation meet the requirements
of General Note 12(t)/85.147(B), HTSUS, and are considered
"originating goods" pursuant to General Note 12(b)(ii), HTSUS.

                        Fact Situation #5

     We note that General Note 12(b)(ii)(A), HTSUS, states for a
good to be considered an originating good "each of the non-originating materials used in the production of such goods
undergoes a change in tariff classification...(emphasis added)." 
In this situation the non-originating materials are the imported
insulated copper wire and the imported copper rod.  Each of these
non-originating components imported into the NAFTA territory must
meet the tariff shift requirement of either General Note
12(t)/85.147(A) or 85.147(B), HTSUS.  The imported copper rod,
which is classifiable under subheading 7407.10.50, HTSUS, meets
the tariff shift requirement of (A) because it is classifiable
outside of subheadings 8544.11 through 8544.60 or headings 7408,
7413, 7605 or 7614.  As stated previously, the imported insulated
copper wire does not meet this tariff shift requirement because
it is classifiable under subheading 8544.49.00, HTSUS.  The wire
harnesses in this situation do not meet the tariff shift
requirement of General Note 12(t)/85.147(A), HTSUS. 

     We are of the opinion that the wire harnesses do meet the
tariff shift requirement of General Note 12(t)/85.147(B), HTSUS. 
As stated previously, the proper interpreation of the tariff
shift requirment of General Note 12(t)/85.147(B), HTSUS, is that
the non-originating materials must change to subheadings 8544.11
through 8544.60 from any other subheading within that group or
headings 7408, 7413, 7605 or 7614, whether dor not there is also
a change from any other subheading, provided the regional value
content requirement is met.    The insulated copper wire which is
classified under subheading 8544.49.00, HTSUS, meets the tariff
shift requirment and the copper rod, which is classifiable under
heading 7407.10.50, HTSUS, also meets the tariff shift
requirement.  The tariff shift requirement of General Note
12(t)/85.147(B), HTSUS, has been met.   

     However, the wire harnesses must also meet the regional
value content requirement, i.e., "(a) 60 percent where the
transaction value method is used, or (b) 50 percent where the net
cost method is used."

     Schedule IV (LIST OF TARIFF PROVISIONS FOR THE PURPOSES OF
SECTION 9 OF THE APPENDIX) of the NAFTA Rules of Origin
Regulations lists subheading 8544.30, HTSUS.  Therefore, the wire
harnesses met the definition of a light duty automotive good
pursuant to Section 2 of the NAFTA Rules of Origin Regulations. 
To calculate the regional vaue content of the wire harnesses
under the net cost method, we must calculate the value of the
non-originating materials.  Pursuant to section 9(1) of the NAFTA
Rules of Orgin Regulations, the value of the non-originating
materials is the sum of the values of the non-originating
materials that are traced materials incorporated into the wire
harnesses.  In this situation the non-originating materials are
the insulated copper wire and the copper rod.  We note that under
the facts there may also be other non-originating materials.  We
will assume that these non-originating materials are not "traced
materials."  The insulated copper wire and copper rod are not
lised in schedule IV of the NAFTA Rules of Origin Regulations
and, therefore, are not traced materials.  Thus, the value of the
insulated copper wire and the copper rod are not included in the
value of the non-originating goods when calculating the regional
value content but they are included in the net cost of the wire
harnesses.  

     In this situation, the value of the non-originating
materials is 0 and, therefore, the regional value content is
100%.  The wire harnesses in this situation meet the requirements
of General Note 12(t)/85.147(B), HTSUS, and are considered
"originating goods" pursuant to General Note 12(b)(ii), HTSUS.

                        Fact Situation #6

     The same legal principles applied in Fact Situation #5,
apply to the wire harnesses in this situation.  In this case, the
facts call for NAFTA origin ore or NAFTA origin copper rod which
is processed into copper wire which is processed into insulated
copper wire which is manufactured into the wire harnesses.  Since
the ore or copper rod are "originating goods", they are not
factored into the tariff shift requirements.  As stated
previously, General Note 12(b)(ii)(A), HTSUS, states that "each
of the non-originating materials used in the production of such
goods undergoes a change in tariff classification...(emphasis
added)."   The only non-originating good is the imported
insulated copper wire which we have consistently stated does not
meet the tariff shift requirements of General Note
12(t)/85.147(A), HTSUS.   However, as stated in Fact Situation
#3, the wire harnesses manufactured from non-originating copper
wire 


do meet the requirments of General Note 12(t)/ 85.147(B), HTSUS. 
Therefore, the wire harnesses, in this case, are considered
"originating goods" pursuant to General Note 12(b)(ii), HTSUS.

HOLDING:

     Based on the presented facts and the "originating" and value
assumptions set forth above, the wire harnesses in each Fact
Situation are found to be "originating goods" pursuant to the
rules of origin in General Note 12(b), HTSUS, provided all other
applicable requirements are met.

                              Sincerely,



                              John Durant, Director
                              Commercial Rulings Division