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HQ 555214


December 26, 1989

CLA-2 CO:R:C:V 555214 GRV

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80

Leslie Alan Glick, Esq.
Porter, Wright, Morris & Arthur
1233 20th Street, N.W., 4th Floor
Washington, D.C. 20036-2395

RE: Applicability of partial duty exemption under HTSUS subhead- ing 9802.00.80 to certain picture frames imported from Mexico

Dear Mr. Glick:

This is in response to your three letters of December 9, 1988, on behalf of Tyrone Art, Inc., requesting a ruling on the applicability of subheading 9802.00.80, Harmonized Tariff Sched- ule of the United States (HTSUS) (formerly item 807.00, Tariff Schedules of the United States (TSUS)), to certain picture frames to be imported from Mexico. Samples of the various components to be assembled were submitted for examination. You also inquired as to the proper tariff classification of picture frames made of plastic, particle board and aluminum. This issue will be the subject of a separate response. We regret the delay in responding to your request.

FACTS:

You state that various fabricated components, all products of the U.S., will be sent to Mexico for assembly into picture frames of plastic, wood, or aluminum containing picture prints. Product-specific components include the following:

1) for plastic picture frames - straight, pre-notched extruded plastic border material and metal hangers; 2) for wood picture frames - pre-shaped particle board molding, shipped in 16 foot continuous lengths, and v- staples and metal hangers; and,
3) for aluminum picture frames - pre-finished (painted or plated) extruded aluminum molding, shipped in 16 foot continuous lengths, and 16 by 20 inch chipboard, L- angles, screws, wire and clips.

U.S. components common to the three types of picture frames include the following:
4) 16 by 20 inch picture prints;
5) 16 by 20 inch flat glass; and,
6) 16 by 20 inch corrugated cardboard backing;

Although the assembly operations performed in Mexico vary somewhat, depending on whether the frames are plastic, wood, or aluminum, they generally include the following steps:

1) the common components--the 16 by 20 inch cardboard backing, print and flat glass--are combined to create a 3-part picture print sandwich, whereby the picture print is placed between the glass and cardboard backing (in the case of aluminum picture frames, the picture print is glued to the 16 by 20 inch chipboard before it is placed between the glass and cardboard backing, making it a 4-part picture print sandwich); 2) the continuous-length wood and aluminum materials are miter cut to length and hand-assembled into picture frames that are respectively stapled or screwed together, enclosing the picture print sandwich within; the straight extruded plastic border material is hand- wrapped around the common component sandwich and taped to secure the ends of the "one piece wrap."

The completed frames are then individually packed and imported into the U.S.

ISSUE:

Whether the picture frames will be eligible for the partial duty exemption available under HTSUS subheading 9802.00.80 when imported into the U.S.

LAW & ANALYSIS:

As you know, the HTSUS superseded and replaced the TSUS, effective January 1, 1989. TSUS item 807.00 was carried over into the HTSUS without change as subheading 9802.00.80. This tariff provision provides a partial duty exemption for:

[a]rticles assembled abroad in whole or in part of fab- ricated 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 HTSUS subheading 9802.00.80 must be satisfied before a component may receive a duty allowance. An article entered under HTSUS subheading 9802.00.80 is subject to duty upon the full value of the imported assembled article less the cost or value of such U.S. components, upon compliance with the documentary requirements of 19 CFR 10.24.

Fabricated components subject to the exemption are provided for at 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 exporta- tion 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.

Operations incidental to the assembly process are not con- sidered further fabrication operations, as they are of a minor nature and cannot always be provided for in advance of the assem- bly operation, although they may precede, accompany or follow the actual assembly operation. 19 CFR 10.16(a). Examples of opera- tions considered incidental to the assembly process are deline- ated at 19 CFR 10.16(b). However, any significant process, operation, or treatment whose primary purpose is the fabrication, completion, physical or chemical improvement of a component precludes the application of the exemption under HTSUS subheading 9802.00.80. See, 19 CFR 10.16(c).

You reference a prior Headquarters Ruling Letter (815445, dated November 5, 1986) which allowed the TSUS item 807.00 duty exemption for a straight brass strip that was notched along its length to permit its being folded into photo frames. However, on December 2, 1988, the U.S. Court of International Trade decided the case of Samsonite Corporation v. United States, Slip Op. 88-166, 12 CIT ___, 702 F.Supp. 908 (1988), appeal docketed, No. 89-1346 (Fed.Cir., March 17, 1989), and reached a different conclusion in regard to a similar set of facts. In Samsonite, straight strips of U.S. steel were exported to be assembled into luggage bags. Once abroad, the strips were bent by machine into a form analogous to a square-sided letter C and subjected to other operations prior to being assembled into the luggage bags. As the straight strips of steel could not be placed immediately into the assembly of the luggage bags without the bending operation, the court found that the strips were not exported in condition ready for assembly. In considering whether the bending of the strips was an incidental operation, the court found that the bending process did more than "adjust" (19 CFR 10.16(b)(5)) the article, but rather created the component to be assembled, the essence of which was its configuration. Accordingly, the court upheld Customs denial of the duty allowance under TSUS item 807.00.

Regarding the plastic frames in this case, the pre- notched, extruded plastic border material is similarly exported in a straight condition and the "one piece wrap" is hand-wrapped, i.e., bent, around the 3-part sandwich of common components. As in the Samsonite case, this bending operation creates the compo- nent to be assembled--the plastic frame--and compels a finding that the plastic border material will not be exported in condition ready for assembly without further fabrication.

Although the particle board and aluminum moldings also cannot enter immediately into the assembly process as exported, the operations performed on these components are considered inci- dental to the assembly process rather then further fabrication, as the moldings, exported in continuous lengths, are merely miter cut to length. 19 CFR 10.16(b)(6). Headquarters Ruling Letters 554790 (October 30, 1987)(extruded aluminum strips cut to specific lengths abroad), 063809 (June 19, 1980) (foreign operations consisting of merely cutting exported wood to mitered lengths and fitting the mitered joints together to form picture frames), and 058547 (September 20, 1978, 12 Cust.Bull. 1235).

The assembly operations in this case involve the use of tape to secure the plastic frame together (and the 3-part picture print sandwich within--the backing, picture print and glass); v-staples to secure the wooden frame parts together (and the 3-part picture print within); and screws and L-angles to secure the aluminum frame parts together (and the 4-part picture print sandwich within--the backing, chipboard, picture print and glass). As the samples submitted show that the wooden and aluminum frame parts are securely joined together by staples and screws, respectively, and that the picture print sandwiches are secured within the plastic, wooden and aluminum frames, we find that these methods used to fit together the U.S. components constitute acceptable assembly operations within the meaning of HTSUS subheading 9802.00.80. Further, an examination of the samples submitted shows that the U.S. components do not lose their respective physical identities in the assembly opertions, and that, with the exception of the plastic frames, they are not otherwise advanced in value or improved in condition except by assembly or operations incidental to the assembly operations.

HOLDING:

On the basis of the information submitted and after examin- ing the samples submitted, the wood and aluminum picture frames and the 3- or 4-part picture print sandwiches contained therein (consisting of flat glass, a picture print--glued to chipboard in metal frames only--and cardboard backing) will be eligible for the duty allowance available under HTSUS subheading 9802.00.80 when imported into the U.S., upon compliance with the documentary requirements of 19 CFR 10.24. The plastic border material used to make the plastic frames will not be eligible for the duty exemption, as it is subjected to a further fabrication when it is hand-wrapped to form the frame configuration. However, the 3-part picture print sandwich contained therein will be eligible for the duty exemption.

Sincerely,


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