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HQ 555533


June 4, 1990

CLA-2 CO:R:C:V 555533 KAC

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80

Mr. John W. Cain
Cain Customs Brokers Incorporated
421 Texano
P.O. Box 150
Hidalgo, Texas 78557

RE: Applicability of duty exemption under HTSUS subheading 9802.00.80 to starter solenoid switches created by securely joining components together, completely enclosing components, winding wire, and bending.Assembly;incidental operations;19 CFR 10.16(a),10.16(b)(7);General Instrument;554920.

Dear Mr. Cain:

This is in response to your letters dated November 24, 1989, February 12, and 16, and May 11, 1990, on behalf of Wells Manufacturing Company, requesting a ruling on the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to starter solenoid switches imported from Mexico.

FACTS:

Various U.S.-made parts will be shipped to Mexico for assembly with certain foreign parts to create starter solenoid switches. The switches provide electrical energy to starters on internal combustion engines of automobiles. Of the 27 parts that comprise the switch, 4 will be of foreign origin. They consist of nuts and two different types of bolts of Taiwanese origin and a magnet wire of Mexican origin. The foreign operations consist of:

(1) force fitting, punching, screwing, riveting, pressing, and snapping components together;
(2) enclosing certain components within other components; (3) winding wire around a spool;
(4) stacking components together;

(5) cutting wire to length;
(6) testing of the switch for electrical charge; and (7) stripping wire by machine; or dipping wire in electrically conductive liquid solder to melt the insulation and cover the wire with the solder.

Upon completion of the assembly process the switches will be imported into the U.S.

ISSUE:

Whether the starter solenoid switches will be eligible for the partial duty exemption under HTSUS subheading 9802.00.80 when imported into the U.S.

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, lubrication, 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 cost or value of the imported assembled article, less the cost or value of the U.S. components assembled therein, upon compliance with the documentary requirements of section 10.24, Customs Regulations (19 CFR 10.24).

Section 10.14(a), Customs Regulations (19 CFR 10.14(a)), states 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 Regulations (19 CFR 10.16(a)), provides that 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.

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 operations. 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 to that component. See, 19 CFR 10.16(c).

The operations which result in securely joining components together by force fitting, punching, screwing, riveting, pressing, and snapping are considered acceptable assembly operations pursuant to 19 CFR 10.16(a). Completely and securely enclosing certain components within other components is also considered an acceptable assembly operation. See Headquarters Ruling Letter 554920 dated January 3, 1989 (completely enclosing a metal weight in the bottom hem of vertical blinds is an acceptable assembly process). Moreover, winding wire around a spool is considered an acceptable assembly operation within the meaning of this tariff provision. See, General Instrument Corporation v. United States, 61 CCPA 86, C.A.D. 1128, 499 F.2d 1318 (1974), rev'g, 70 Cust.Ct. 151, C.D. 4421, 359 F.Supp. 1390 (1973) and 19 CFR 10.16(a). The staking operation involves bending or deforming a portion of a bracket, by means of a press, over a sub-assembled housing unit for the sole purpose of attaching the bracket to the unit. We believe that this is an acceptable assembly operation as it is analagous to a force fitting operation. The testing operation is also considered an operation incidental to the assembly process pursuant to 19 CFR

However, no allowance may be made for the U.S.-origin solder into which the wire of Mexican origin is dipped. The solder is exported from the U.S. to Mexico in the form of a solid bar which is subsequently heated in Mexico to a molten state for application to the wire leads. Therefore, the solder clearly is not exported from the U.S. in condition ready for assembly as required by clause (a) of HTSUS subheading 9802.00.80.

HOLDING:

On the basis of the information submitted, it is our opinion that the starter solenoid switches to be assembled in Mexico will be entitled to the partial duty exemption under HTSUS subheading 9802.00.80. Therefore, allowances in duty may be made under this tariff provision for the cost or value of the U.S. components, excluding the solder, upon compliance with the documentation requirements of 19 CFR 10.24. No allowance in duty may be made for the components of foreign origin--nuts and two different types of bolts of Taiwanese origin and the magnet wire of Mexican origin.
Sincerely,

John Durant, Director
Commercial Rulings Division

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