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HQ 086128


January 19, 1990

CLA-2 CO:R:C:G 086128 JS

CATEGORY: CLASSIFICATION

TARIFF NO.: 3005.90.5000

Mr. Lewis Stein
Johnson & Johnson
One Johnson & Johnson Plaza
New Brunswick, New Jersey
08933-7002

RE: Elastic Bandage

Dear Mr. Stein:

This is in reference to your letter of October 25, 1989, on behalf of Johnson & Johnson, requesting classification of elastic bandages imported from Mexico. Two packaged samples were submitted for inspection.

FACTS:

The samples at issue are identical strips of 4" wide elastic bandage constructed of woven cotton webbing, reinforced with rubber, with non-ravelling edges and over-stitched ends which prevent fraying. Two aluminum clips of U.S. origin are attached at one end. The bandages are used for muscular and tendon support, and are reportedly heat resistant. They will be imported in 2", 3", 4" and 6" widths.

You state that the fabric is woven in the United States, and will be shipped to Mexico in 400 to 600 unstretched yard lengths. It will be cut into five yard lengths, rolled with the metal clips in the center, labelled, and shrink wrapped for retail sale.

ISSUE:

1. Is the merchandise at issue classifiable as a bandage under heading 3005, HTSUSA?

2. Whether the rubber elastic bandage is entitled to a partial duty exemption under subheading 9802.00.80, HTSUSA, when returned to the United States?

LAW AND ANALYSIS:

Issue 1:

Classification of merchandise under the HTSUSA is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that the classification shall be determined according to the terms of the headings and any relevant section or chapter notes.

Heading 3005, HTSUSA, provides for wadding, gauze, bandages and similar articles. The Explanatory Notes, which constitute the official interpretation of the tariff at the international level, state that heading 3005 covers wadding and gauze for dressings (usually of absorbent cotton) and bandages, etc., not impregnated or coated with pharmaceutical substances, ...provided they are exclusively intended (e.g. because of labels affixed or special folding) for sale directly without re-packing, to users (private persons, hospitals, etc.) for use for medical, surgical, dental or veterinary purposes. Since the bandages at issue are similar to the above exemplars, and are rolled and shrink wrapped with a label affixed for sale directly to users, it is classified under this heading.

Issue 2:

HTSUSA subheading 9802.00.80 provides a partial duty exemption for:

[a]rticles assembled abroad in whole or in part of fabricated components, the product of the United States, which (a) were exported in condition ready for assembly without further fabrication, (b) have not lost their physical identity in such articles by change in form, shape, or otherwise, and (c) have not been advanced in value or improved in condition abroad except by being assembled and except by operations incidental to the assembly process such as cleaning, lubricating, and painting.

All three requirements of HTSUSA subheading 9802.00.80 must be satisfied before a component may receive a duty allowance. An article entered under this tariff provision is subject to a duty upon the full value of the imported assembled article, less the cost or value of the U.S. components assembled therein, provided there has been compliance with the documentation requirements of section 10.24, Customs Regulation (19 CFR 10.24).

Fabricated components subject to the exemption are provided for at section 10.14(a), Customs Regulations (19 CFR 10.14(a)), which provides, in part, that:

[t]he components must be in condition ready for assembly without further fabrication at the time of their exportation from the United States to qualify for the exemption. Components will not lose their entitlement to the exemption by being subjected to operations incidental to the assembly either before, during, or after their assembly with other components.

Section 10.16(a), Customs Regulation (19 CFR 10.16(a), provides that the assembly operation performed abroad may consists of any method used to join or fit together solid components, such as welding, soldering, riveting, force fitting, gluing, laminating, sewing, or the use of fasteners.

In the instant case, the samples and description of the foreign operations show that only the metal clips will qualify for the duty exemption of subheading 9802.00.80, HTSUSA. The rubber elastic bandage and thread will not qualify for HTSUSA subheading 9802.00.80 consideration because these components fail to meet the requirement of clause (a) of the tariff provision, as they are not exported in a condition ready for assembly without further fabrication. Once the coiled bandage is cut to length, overlocking stitches are sewn onto the cut ends of the bandage to prevent the unraveling of the fabric. In our opinion, sewing the overlocking stitches is not an acceptable assembly operation or an operation incidental to assembly, but is a further fabrication of the bandage.

In L'Eggs Products, Inc. v. United States, Slip Op. 89-5, 13 CIT , 704 F.Supp. 1127 (CIT 1989), the court considered whether sewing together the end of a panty hose tube was an assembly or a further fabrication under item 807.00, Tariff Schedules of the United States (TSUS) (the precursor provision of HTSUSA subheading 9802.00.80). The court determined that the tubes were exported in condition ready for assembly without further fabrication for the reason that the tubes, as exported, "required no further fabrication since they were fully constructed, and were secure from unraveling by the tuck stitches." As noted above, such is not the case here. See also, Zwicker Knitting Mills v. United States, Cust.Ct. 34, C.D. 4786, 469 F.Supp. 727 (1979), aff'd, 67 CCPA 37, C.A.D. 1240, 613 F.2d 295 (1980).

Moreover, the court in L'Eggs concluded that the tube closing operation constituted an acceptable assembly as the thread served as a joining agent by joining the tube to itself. In the present case, the thread used in sewing the overlocking stitches onto the ends of the bandage does not serve as a binding agent, but is merely used to prevent the unraveling of the fabric.

The operation of crimping the metal clips to the end of the elastic bandage constitutes an acceptable assembly operation pursuant to 19 CFR 10.16(a). See also, Headquarters Ruling Letter 555205 dated August 25, 1989, which held that crimping a terminal onto a wire was an acceptable assembly operation.

With regard to the country of origin marking of the bandages, Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), requires, subject to certain specified exceptions, that all articles of foreign origin imported into the U.S. shall be marked to indicate the country of origin to the ultimate purchaser in the U.S. Although the country of origin of a product is generally determined on the basis of where the last substantial transformation occurs, there is an exception to the general rule set forth in section 10.22, for articles which are entitled to an exemption from duty under subheading 9802.00.80, HTSUSA. Section 10.22 provides that assembled articles entitled to the exemption are considered products of the country of assembly for purposes of 19 U.S.C. 1304, whether or not the assembly operation constitutes a substantial transformation. Therefore, since the bandages are eligible for entry under subheading 9802.00.80, 19 CFR 10.22 applies.

In addition, it should be noted that Customs has previously determined that the words "Assembled in" constitute sufficient country of origin marking for articles subject to section 10.22, Customs Regulations (19 CFR 10.22). See HQ 731507, issued October 17, 1989. Thus, the country of origin marking should state that the bandages are "Assembled in Mexico" in part from material of U.S. origin.

HOLDING:

The merchandise at issue is classified under subheading 3005.90.5000, HTSUSA, which provides for wadding, gauze, bandages and similar articles (for example, dressings, adhesive plasters, poultices), impregnated or coated with pharmaceutical substances or put up in forms or packings for retail sale for medical, surgical, dental or veterinary purposes: other: other, dutiable at the rate of 7 percent ad valorem.

On the basis of the information and the samples submitted, we conclude for the reasons stated above that no deduction from the full value of the imported rubber elastic bandage may be made under HTSUSA subheading 9802.00.80 for the cost or value of the bandage and thread. However, allowances may be made under this tariff provision for the cost or value of the metal clips, provided there is compliance with the documentary requirement of 19 CFR 10.24.

The designated textile and apparel category may be subdivided into parts. If so, the visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest you check, close to the time of shipment, the Status Report on Current Import Quotas (Restraint Levels), an issuance of the U.S. Customs Service which is updated weekly and is available for inspection at your local Customs office.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification and the restraint (quota/visa) categories, you should contact your local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.

Sincerely,

John Durant, Director
Commercial Operations Division

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