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HQ 555626


July 3, 1990

CLA-2 CO:R:C:V 555626 LS

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80, 9801.00.10

Kenneth H. Keefe, Esq.
Sandler, Travis & Rosenberg, P.A.
The Waterford
5200 Blue Lagoon Drive
Miami, Florida 33126-2022

RE: Applicability of partial duty exemption under subheading 9802.00.80, HTSUS, to spring block assemblies

Dear Mr. Keefe:

This is in response to your letter of March 30, 1990, on behalf of Suttle Caribe, Inc., requesting a ruling on the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to spring block assemblies, which are subassemblies used in the manufacture of telephone modular connectors. Samples of three spring block assemblies were submitted.

FACTS:

The components comprising the spring block assemblies are all of U.S. origin and are supplied by Suttle Caribe, Inc. to Variety Assembling Co. which performs the assembly operations in Haiti. The components are exported to Haiti in kits, consisting of (1) plastic parts, known as spring blocks, which are molded in Suttle Caribe Inc.'s sister plant, Suttle Apparatus, in Minnesota, and (2) lead assemblies, which are also assembled by Suttle Apparatus, and are comprised of colored insulated wires, gold pins, splices, and spade terminals. Two of the subassemblies have small, beige colored spring blocks, and the third has a larger, clear plastic spring block. The latter subassembly has a comb inserted into it which is also a component of U.S. origin.

The assembly process in Haiti consists of the following steps. The spring blocks, which contain several holes on the top and bottom, are placed onto fixtures which hold them upwards. The lead assemblies are inserted into the spring blocks by introducing the ends with the gold pins into the holes until the splices attached to the pins are inside the blocks. Two of the subassemblies have four pins, while the third has six pins. An
operator then manually activates a lever in the fixture that bends all the pins in the same direction. The bending serves the purpose of holding the pins in place and positioning them so that they are ready to be incorporated into the telephone modular connector. The one sample with the larger, clear plastic spring block undergoes an additional operation wherein a comb is inserted into the spring block to separate the pins after they are bent. When the comb is in place, the tips of the pins fit into the grooves of the comb. The subassemblies are then extracted from the fixture, checked, and grouped into quantities of 25 or 50, depending upon the particular subassembly. The grouped subassemblies are tied with a rubber band and placed into cartons. Both the rubber bands and cartons are of U.S. origin. The packaged subassemblies are then exported to Puerto Rico or the United States where Suttle Caribe, Inc. incorporates them into final products.

ISSUE:

Whether the spring block subassemblies will qualify for the duty exemption available under subheading 9802.00.80, HTSUS, when returned to the U.S.

LAW AND ANALYSIS:

Subheading 9802.00.80, HTSUS, 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 subheading 9802.00.80, HTSUS, must be satisfied before a component may receive a duty allowance. An article entered under subheading 9802.00.80, HTSUS, is subject to duty upon the full value of the imported assembled article less the cost or value of the U.S. components, upon compliance with the documentary requirements of section 10.24 of the Customs Regulations (19 CFR 10.24).

According to section 10.16(a), Customs Regulations (19 CFR 10.16(a)), assembly operations may consist of any method used to join or fit together solid components, such as welding, soldering, riveting, force fitting, gluing, or the use of
fasteners. The combined processes of placing the spring blocks in a fixture, inserting the lead assemblies into the spring blocks by introducing the gold pins into the holes, and bending the pins in the same direction by activating a lever in the fixture are analogous to the operations enumerated in 19 CFR 10.16(a) and, therefore, constitute an assembly operation within the meaning of subheading 9802.00.80, HTSUS. See Headquarters Ruling Letters (HRL's) 555444 dated March 15, 1990 (foreign operations of placing various parts of a solenoid inside a housing and making an indentation on the outside of the housing to hold the parts inside constitute acceptable assembly operations), and 554962 dated May 15, 1989 (force fitting of "y"- shaped bracket to spiral-shaped metal tube, and crimping of bracket so that "y"-shaped frame and metal tube are permanently held together constitute an acceptable assembly operation). The additional operation of inserting a comb into one of the subassemblies to separate the pins after they are bent is also an assembly operation because it is analogous to force fitting.

We find that the U.S. fabricated components consisting of the spring blocks, the lead assemblies, and the combs are exported in condition ready for assembly without further fabrication, do not lose their physical identities in the assembly operations, and are not otherwise advanced in value or improved in condition except by assembly operations. Therefore, the spring block assemblies imported into the U.S. are eligible for the partial duty exemption under subheading 9802.00.80, HTSUS.

Subheading 9801.00.10, HTSUS, provides for the free entry of products of the U.S. that are exported and returned without having been advanced in value or improved in condition by any process of manufacture or other means while abroad, provided the documentary requirements of section 10.1, Customs Regulations (19 CFR 10.1) are met. The packaging materials used in grouping and shipping the subassemblies are entitled to free entry under subheading 9801.00.10, HTSUS, since they are U.S. products which are returned without having been advanced in value or improved in condition while abroad. See HRL 731806 dated November 18, 1988 (duty-free treatment provided by subheading 9801.00.10, HTSUS, extends to an American-made container which is exported and then reimported with its contents, provided that it meets all of the criteria for classification within that subheading).

HOLDING:

The combined processes of placing the spring blocks in a fixture, inserting the lead assemblies into the spring blocks, and bending the pins of the lead assemblies constitute an assembly operation within the meaning of subheading 9802.00.80, HTSUS. The additional step of inserting a comb into one of the
subassemblies is also an acceptable assembly operation. The spring block assemblies may be entered under subheading 9802.00.80, HTSUS, when returned to the U.S., with allowances in duty for the cost or value of the spring blocks, lead assemblies, and combs, which are all of U.S. origin, upon compliance with the documentation requirements of 19 CFR 10.24. The packaging material of U.S. origin is entitled to free entry under subheading 9801.00.10, HTSUS, provided the documentation requirements of 19 CFR 10.1 are met.

Sincerely,

John Durant, Director
Commercial Rulings Division

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