Muy Frio, SA de CV in Mexico just received an order for 20,000 air conditioning window units (8415.10) from the Iceman. The Iceman needs to save as much money as possible because of his high electricity bill and would like to claim NAFTA on the air conditioning window units. He visits your office and asks for your expertise. The bill of materials reads as follows: The Iceman also tells you that the sale is at an arms length transaction and the transaction value accepted by U.S. Customs is $137.00 per unit. Do the air conditioning units qualify for NAFTA?
A) Yes, under criteria A; all components are “wholly obtained or produced” in a NAFTA country.
B) Yes, under criteria B; each of the non-originating components made the necessary tariff shift as required by GN12(t) of the HTSUS.
C) Yes, under criteria B; some of the non-originating components did not make the necessary tariff shift as required under GN12(t) of the HTSUS, but the good satisfies the De Minimis Rule.
D) Yes, under criteria B; each of the non-originating components made the necessary tariff shift and the good satisfies the applicable regional value- content as required by GN12(t).
E) No. The air conditioning units do not qualify for NAFTA.
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The Answer is: E.
Citation: (19CFR181, App Section 5(1)(a); Section 5(4)(I);HTSUS 8415.10/8415.90.40;GN12(t) /84.32)
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