Interpretation ID: K.Dziczek Part 583

 

 

 

 

 

 

 

 

Ms. Kristin Dziczek

Director, Labor and Industry Group

Center for Automotive Research

3005 Boardwalk, Suite 200

Ann Arbor, MI  48108

 

Dear Ms. Dziczek,

 

This letter is in response to your April 10, 2012 email to Thomas Healy of this office.  In your email you ask several questions about the requirements of 49 C.F.R. Part 583, Automobile Parts Content Labeling.  The responses to your questions are provided below.

 

By way of background, pursuant to the American Automobile Labeling Act, Part 583 requires passenger motor vehicles to be labeled with five items of information related to the countries of origin of those vehicles.  The items of required information are:

 

            On a carline basis:

 

                        U.S./Canadian parts content

 

                        Major sources of foreign parts content

 

            For the vehicle:

 

                        Final assembly point

 

                        Country of origin for the engine

 

                        Country of origin for the transmission.

 

An explanatory note concerning the meaning of parts content is also required on the label.  See 583.5(a) and (b). 

 

You first asked whether the parts percentage on the label includes the content of the engine and transmission.  The answer is yes.

 

As indicated above, the first item of information required on the label is U.S./Canadian parts content.  As indicated by 583.5(a)(1), this term refers to (t)he overall percentage, by value, of the passenger motor vehicle equipment that was installed on vehicles within the carline of which the vehicle is part, and that originated in the United States and/or Canada.  Passenger motor vehicle equipment is defined at 583.4(b)(7) as any system, subassembly, or component received at the final assembly point for installation on, or attachment to, such vehicle at the time of its initial shipment by the manufacturer to a dealer for sale to an ultimate purchaser. Passenger motor vehicle equipment also includes any system, subassembly, or component received by an allied supplier from an outside supplier for incorporation into equipment supplied by the allied supplier to the manufacturer with which it is allied.  The engine and transmission of a passenger motor vehicle would be considered a system, subassembly, or component of a passenger motor vehicle.  They therefore come within the definition of passenger motor vehicle equipment and are included when calculating U.S./Canadian parts content.[1]

 

You next ask that if the engine and transmission content are included in the overall percentage of parts of the vehicle, whether the component content of the engine and transmission is used in calculating the contribution of these components to the overall parts content of the vehicle, or whether the entire engine and transmission is considered as a whole from the country of origin of these components.  You also ask whether the country of origin for the engine and transmission is determined by the point of final assembly of these components or based on their parts content percentage.

 

The procedure for determining U.S./Canadian parts content (the first item of information on the label) is set forth at 583.6.[2]  As part of that procedure, the procedure for determining the U.S./Canadian percentage of the value of an item of equipment, such as an engine or transmission, is set forth in

583.6(c).  The procedure varies depending on whether the equipment is supplied by an outside supplier or an allied supplier.[3]  Equipment supplied by an outside supplier is considered 100 percent U.S./Canadian if 70 percent or more of its value is added in the U.S. and/or Canada, and to otherwise have the actual percent of its value added in the U.S. and/or Canada rounded to the nearest five percent.  See 583.6(c)(1).  Equipment supplied by an allied supplier is considered to have the actual percent of its value added in the U.S. and/or Canada.  See 583.6(c)(2).   

 

The procedures for determining the countries of origin for the engine and transmission, i.e., the last two items of information on the label, are set forth in

583.8.  The procedures are significantly different from those used in connection with determining U.S./Canadian parts content.  Moreover, as indicated earlier, while U.S./Canadian parts content is calculated on a carline basis, the determinations of country of origin of the engine and transmission are not.  Section 583.8(e) specifies that the country of origin of the engine and the country of origin of the transmission is the country that contributes the greatest amount of value added to that item of equipment, with the U.S. and Canada being treated separately.  The country of origin of the engine/transmission is determined based on the country of origin and value of each component and the assembly and labor costs incurred during final assembly of the engine/transmission, not simply the point of final assembly. See 583.8(b)-(d). 

 

You also point out that 49 C.F.R 583.6 contains a procedure under which manufacturers may submit a petition to the agency to calculate the U.S./Canadian parts content and major sources of foreign parts of a vehicle carline using alternative methods.  You inquire whether any manufacturers have submitted petitions to calculate the U.S./Canadian parts content and major sources of foreign parts of a vehicle carline using an alternative method.  The agency is not aware of any petitions that manufacturers have submitted to calculate the U.S./Canadian parts content and major sources of foreign parts of a vehicle carline using alternative methods.

 

If you have further questions, you may refer them to Thomas Healy of this Office (202-366-2992).

 

Sincerely,

 

 

 

                                                                                    O. Kevin Vincent

                                                                                    Chief Counsel

 

Ref: Part 593

Dated: 5/31/12