Customs Tariff and Automotive Parts: How to Classify Them

Questions about vehicle parts or machine parts

If you need to classify auto or machine parts in the customs tariff number, you should know some basic customs classification rules. First, ask yourself the following questions:

• In which machine is the part installed?

• Does it belong to an assembly of this machine?

• What functions does the machine perform? If there are multiple functions: What is the main function?

• Would the part or assembly result from the (theoretical) dismantling of the machine? If not, might it possibly be an accessory?

You may be wondering why I do not ask about the material of the part.

The answer to that can be found later in this article.

Universal provisions of the HS for the customs classification of auto and machine parts

The most important General Rule of Interpretation (GRI) Number 1 provides two main guidelines:

• The legal determination is made by the wording of the heading at the level of the first four digits of a customs tariff number. An example of this is “electricity generating sets and rotary converters” of HS heading 8502.

• At the same time, the notes to the respective sections and chapters of the customs tariff or the nomenclature must always be considered.

• General Provision Number 6 extends these guidelines to the subheadings as well.

Gathering information for the torque converter automatic transmission in the image

• In which machine is the part, i.e., the torque converter automatic transmission, installed?

👉 The transmission is used in a passenger vehicle of HS heading 8703.

HS heading 8703 reads: “Passenger cars and other motor vehicles, principally designed for the transport of persons (excluding those of heading 8702), including station wagons and racing cars”

• Is it a part or an assembly of this machine?

👉 The torque converter automatic transmission is an independent assembly with a specific function.

• What functions does the machine perform? What is the main function, if multiple functions are carried out with the machine?

👉 The transmission automatically shifts gears without driver intervention. The torque converter ensures smooth power transfer between the engine and transmission by hydraulically adjusting engine power. Moreover, the transmission enables smooth acceleration and enhances driving comfort.

• Does the part or assembly result from the (theoretical) dismantling of the machine? If not, might it possibly be an accessory?

👉 Yes, a transmission is an integral part of an automobile.

Which notes govern the customs classification of an auto part?

If we look at the wordings of the headings within Chapter 87, we find in heading 8708 “Parts and accessories for motor vehicles”. It is important to note that other automotive parts are specifically mentioned earlier in the nomenclature, such as “chassis with engine” in heading 8706 or “bodies” in heading 8707.

These examples of “parts for automobiles” demonstrate that careful reading is crucial for correct classification. “Bodies” must not be classified under heading 8708, as they are already explicitly mentioned at heading 8707.

Our transmission would fit under heading 8708. However, according to GP 1, we must also consider, besides the allocation of a suitable heading wording, the notes of the chapters and sections. These notes often define or regulate specific terms in the nomenclature – as with “parts” and “accessories”.

Parts and accessories according to notes 2 and 3 to section XVII (17)

In the introduction of this section note 2 (Chapter 87 belongs to Section XVII), certain parts are explicitly excluded from Chapter 87 and assigned to other chapters of the nomenclature.

"The following goods are not to be classified as "parts" or "accessories", even if they are identifiable as being meant for goods of Section XVII"

This includes, but is not limited to (not exhaustively listed in this article):

• Seals of all materials (e.g., Chapter 39 for plastics or Chapter 40 for rubber)

• Common standardized parts like screws (heading 7318), springs (7320), ropes (7312) or chains (7315) made of steel or other metals (Chapters 74 to 81) and plastics (Chapter 39)

Note 2e is particularly important:

Machinery, apparatus and equipment of headings 8401 to 8479 and parts thereof, except radiators for goods of this section; goods of heading 8481 or 8482 and parts of engines or other machines captured in heading 8483;

This illustrates that when classifying auto parts in the customs tariff, all headings of Chapter 84 must also be considered, such as:

• Gasoline engine (8407)

• Diesel engine (8408)

• Coolant pumps (8413)

• Fans (8414)

• Valves (8481)

• Camshafts (8483)

Section note 3 also defines what is meant by “auto parts” in terms of the customs tariff:

"Parts" and "accessories" within the meaning of Chapters 86 to 88 are only parts and accessories that are identifiable as being meant solely or principally for goods of Chapters 86, 87 or 88. (…)

The “exclusivity” of these parts may be evidenced, for example, by their indispensability for the functioning of the superior machine or their specific shape (e.g., precision-manufactured stamping or injection-molded parts).

👉 Parts with a “regular” geometric shape, like circles or rectangles without special drillings or grooves, that cannot unequivocally be assigned to the automotive industry, are classified in their chapters according to material (e.g., plastic sheets in Chapter 39 or steel sheets in Chapter 72).

Importance of the material for auto parts

After examining the wordings of the individual headings and the associated notes in more detail, we find that materials or raw materials are mentioned only in specific cases. Parts in the mentioned chapters can generally consist of any material. Only at the level of subheadings (6-digits and more) must a specific material sometimes be specified. For choosing headings (4-digits), the material plays no role.

Customs tariff number of the torque converter automatic transmission in the image

Finally, we classify our example according to the described rules.

We have already considered heading 8708 at the beginning and draw the following conclusions:

• Note 3 requires that the auto parts to be classified must be designated solely and mainly for automobiles. The torque converter automatic transmission meets this requirement.

• According to Note 2e, there is no heading with a suitable wording for the depicted transmission. (Author’s note: “Heading 8483 mentions “gears”, but the torque converter transmission itself is not part of engines.”)

Thus, heading 8708 remains for the classification of the torque converter automatic transmission.

Let us now consider the subheadings of heading 8708.

👉 A torque converter automatic transmission for automobiles is therefore classified under the customs tariff number 87084050.

What notes govern the customs classification of a car part?

To determine the correct tariff number for a “torque converter automatic transmission for passenger cars”, we need to match the properties and function of the product with the available categories.

We have already mentioned that this is an automatic transmission for passenger cars. Automatic transmissions fall into the category of transmissions according to the customs tariff nomenclature.

The following tariff heading is the most suitable:

1. It is a transmission (automatic transmission) for passenger cars.

2. Heading 87084050 includes transmissions for passenger cars.

3. There is no indication that it is intended for industrial assembly or other special circumstances.

It is important to note that without additional specific information about the intended use or manufacturing process, this classification is the most plausible. Should additional details be available, pointing to industrial assembly or other specific circumstances, the classification could change.