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HQ 555411


August 11, 1989

CLA-2-CO:R:C 555411 RA

CATEGORY: CLASSIFICATION

TARIFF NOS.: 9802.00.50 and 9802.00.80, HTSUS

Mr. John W. Cain
P.O. Box 150
Hildago, Texas 78557

RE: Tariff treatment of primary wire exported in bulk and either cut and wound on spools in 100-foot lengths or cut to various lengths, coiled, and secured with a twist tie.

Dear Mr. Cain:

This is in response to your letter of June 2, 1989, requesting a ruling on the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to certain wire which is exported in bulk and processed in Mexico by being cut and wound on spools holding 100 feet or cut and wound into various length coils which are tied with a twist tie.

FACTS:

Primary wire is exported to Mexico where it is cut and either placed on spools in 100-foot lengths or cut and wound into coils which are of various lengths and tied with a twist tie. The wire on return to the U.S. is used for repairing automobile wiring, primarily for signal lights. It is assumed that the wire is manufactured in the U.S.

ISSUE:

Are the Mexican operations considered sufficient to entitle the processed wire to a duty allowance under the provisions of subheadings 9802.00.80 or 9802.00.50, HTSUS?

LAW AND ANALYSIS:

Subheading 9802.00.80, HTSUS, provides for a partial exemption from duty for articles assembled abroad in whole or in part of fabricated components of U.S. origin which have been exported ready to be assembled without loss of identity or improved in condition or advanced in value except by assembly or operations incidental thereto.

The process of cutting the exported U.S.-made wire to various lengths and placing it on spools or in coils does not involve the joining of two or more fabricated components so as to constitute an assembly as defined in section 10.12(b), Customs Regulations (19 CFR 10.12(b)). Accordingly, the provisions of subheading 9802.00.80, HTSUS, would not be applicable to the returned wire.

Subheading 9802.00.50, HTSUS, provides for a partial duty exemption for articles returned to the U.S. after having been exported for alterations. The articles must be completely finished when exported from the U.S. and not undergo any intermediate processing operations while abroad. The rolls of wire are complete and finished at the time of exportation and the cutting to length is not considered to be a finishing step in the manufacture of the imported product. In a ruling published as C.I.E. 1113/65 on August 3, 1965, and abstracted as T.D. 56448, we held that American yarn wound on large spools and sent abroad to be rewound on small wooden rolls was entitled to a partial exemption from duty as the operation was considered to be an alteration. This conclusion was followed by our ruling dated September 9, 1986 (file 078034), which held that fabric sent abroad in rolls and rewound into smaller rolls of the same width after being cut into shorter lengths had merely been altered and was eligible for a partial duty exemption.

Accordingly, the cutting of the wire in the subject case into shorter lengths and placing it on spools or tying it into coils would not constitute an assembly but would qualify as an alteration under the provisions of subheading 9802.00.50, HTSUS, upon compliance with section 10.8, Customs Regulations (19 CFR 10.8).

HOLDING:

The cutting of exported wire into shorter lengths and winding it on spools or tying it into coils does not amount to an assembly under subheading 9802.00.80, HTSUS, but does qualify as an alteration under subheading 9802.00.50, HTSUS, with duty assessed upon the cost of the foreign processing, upon compliance with 19 CFR 10.8.

Sincerely,

John Durant, Director
Commercial Rulings Division

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