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HQ 555357


February 16, 1990

CLA-2 CO:R:C:V 555357 KAC

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80

Mr. William D. Outman, II
Baker & McKenzie
815 Connecticut Avenue, N.W.
Suite 1100
Washington, D.C. 20006

RE: Applicability of partial duty exemption under HTSUS sub- heading 9802.00.80 to bows formed in Mexico and attached to footwear

Dear Mr. Outman:

This is in response to your letter of March 30, 1989, on behalf of R.G. Barry Corporation, requesting a ruling on the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS) (formerly item 807.00, Tariff Schedules of the United States (TSUS)), to U.S. ribbon formed into bows in Mexico and attached to footwear. We regret the delay in responding to your request.

FACTS:

You state that the ribbon used in the formation of the bows will be of U.S. origin. The U.S. ribbon, in varying widths, from 1/4 inch to 7/8 inch, will be exported to Mexico on spools. The ribbon will be unspooled and cut to length using the "Ace Hot Knife Strip Cutter." The cut ribbon is then placed on a bow maker machine, threaded around hooks and, with a press of the footswitch, it is formed into a bow which is tied to itself. Later, the bow will be tacked to footwear which is imported into the U.S.

ISSUE:

Whether the formation of the bow constitutes an acceptable assembly operation or operation incidental to assembly for purposes of HTSUS subheading 9802.00.80.

LAW AND ANALYSIS:

HTSUS 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 HTSUS 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 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 section 10.24, Customs Regulations (19 CFR 10.24).

The assembly operation performed abroad may consist 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. See, section 10.16(a), Customs Regulations (19 CFR 10.16(a)).

Operations incidental to the assembly process are not considered further fabrication operations, as they are of a minor nature and cannot always be provided for in advance of the assembly operation, although they may precede, accompany or follow the actual assembly operation. 19 CFR 10.16(a). Examples of operations considered incidental to the assembly process are delineated at 19 CFR 10.16(b). However, any significant process, operation, physical or chemical improvement of a component precludes the application of the exemption under HTSUS subheading 9802.00.80.

We have previously held that cutting U.S. ribbon to appropriate lengths abroad, forming one or more pieces of ribbon into the shape of a bow, and then tying the center of the bow with coated or tinsel wire to secure the bow shape constitutes an acceptable assembly or operation incidental to assembly under subheading 9802.00.80, HTSUS, or item 807.00, TSUS. See, Headquarters Ruling Letters 071450 dated September 8, 1983, 553674 dated June 14, 1985, 554956 dated April 6, 1988, and 554943 dated April 18, 1988. We have also held in Headquarters Ruling Letter 555475 dated November 3, 1989, that ribbon cut to length, wrapped twice around the middle of a coat hanger bar and base of a hanger hook, and knotted into a bow qualified as an
assembly operation or operations incidental to assembly. In each of these cases, the bow formation process involved the joinder of two or more components. The ribbon's bow shape was secured either by tying wire around its center or by wrapping and knotting the ribbon to the hanger.

In the present case, it is clear that the formation of the ribbon into a bow by knotting the ribbon is not, in itself, an assembly operation. This case is distinguishable from the above- cited rulings as the single length of ribbon is the sole component which is knotted to form a bow. There is no joinder of two or more separate components as required by HTSUS subheading 9802.00.80.

Moreover, concerning the subsequent tacking of the completed bow to the footwear, we are of the opinion that the ribbon is not exported in condition ready for assembly without further fabrication. The ribbon after being cut to its designated length is placed on the bow maker machine which shapes the ribbon into a bow and secures the bow by knotting the ribbon to itself. We find that the decision rendered in Samsonite Corporation v. United States, Slip Op. 88-166, 12 CIT , 702 F.Supp. 908 (CIT 1988), aff'd, Appeal No. 89-1346 (CAFC November 16, 1989), 24 Cust.Bull. 23 (January 31, 1990), is controlling. In ruling that straight steel strips, which were sent abroad for bending into a squared "C" shape and then assembled into luggage, were not exported in condition ready for assembly without further fabrication, the court

[f]ound that the "bending process" to which the strips were subjected "did more that 'adjust' the article. The process created the component to be assembled, the essence of which is its configuration."

The operation of forming the ribbon into the bow on the bow maker machine, in effect, does more than adjust the ribbon. The formation operation creates the bow which later will be tacked on to the footwear. The assembly of the bow with the footwear cannot take place until the ribbon has been formed into the shape of a bow, the configuration of which is the essence of the component to be assembled. Thus, the complete change in shape from ribbon to bow is a significant process and cannot be considered an operation incidental to assembly. As the ribbon does not meet the requirement of clause (a) of HTSUS subheading 9802.00.80, no allowance in duty can be made for the cost or value of the U.S. ribbon.

HOLDING:

From the information presented, we conclude that the formation of a single length of U.S. ribbon into a bow which is knotted to secure its shape is not an acceptable assembly operation, but rather is further fabrication of the exported ribbon. Therefore, the U.S. ribbon will not qualify for the partial duty exemption of HTSUS subheading 9802.00.80.

Sincerely,

John Durant, Director
Commercial Rulings Division

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