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HQ 556029


September 10, 1991

CLA-2 CO:R:C:S 556029 DSN

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80

John M. Peterson, Esquire
Neville, Peterson & Williams
39 Broadway
New York, New York 10006

RE: Ribbons; slippers, 10.14; 10.16; 071450; 554956; 554943; 555476; 555357; L'eggs; Baylis

Dear Mr. Peterson:

This is in response to your letters of April 16, 1991 and July 15, 1991, on behalf of Aris Isotoner, Inc., requesting a ruling concerning the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to U.S. ribbons formed into bows in the Philippines and attached to footwear.

FACTS:

According to your submissions, U.S.-origin fabric ribbon is sent to the Philippines on spools where it is cut to length and assembled onto footwear slippers by means of sewing. Two types of ribbons are attached to the footwear slippers in the Philippines.

The first method consists of cutting the U.S.-origin ribbon to length and sewing the midpoint of the ribbon to the slipper upper with thread. The ribbon is then hand-tied into a bow. The bow is then tacked through the center to the footwear upper by a bartacking machine. You state the the hand-tying of the ribbons into bows is such a minor operation that it takes a worker approximately 35 seconds per slipper to complete. The slipper is then packaged and exported to the U.S.

The second method consists of cutting U.S.-origin ribbon to various lengths. A "rosette", which resembles a flower, is formed by twisting a length of ribbon measuring 5/8 inch by 7 3/4 inches, stitching the ribbon to itself, rolling it, and stitching
it again. This process is repeated several times until it resembles a flower, whereupon several additional lengths of ribbon are folded in the shape of a bow and stitched onto the rosette to form a bow with rosette. The rosette/bow is then attached to the slipper upper by two rows of stitching, one on either side of the center of the rosette/bow.

ISSUE:

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

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 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 (10 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 subheading 9802.00.80, HTSUS, to the component. See, 10 CFR 10.16(c).

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, Tariff Schedules of the United States (the precursor provision to subheading 9802.00.80, HTSUS). See, Headquarters Ruling Letters (HRL) 071450 of September 8, 1983, 553674 of June 14, 1985, 554956 of April 6, 1988, and 554943 of April 18, 1988. We have also held in HRL 555475 of 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 addition, we have held in HRL 555357 of February 16, 1990, that the formation of a single ribbon into a bow by knotting the ribbon is not, in itself, an assembly operation. That case involved cut-to-length ribbon which was placed on a bow maker machine to form a bow which was tied to itself. The bow was then tacked to certain footwear prior to importation. HRL 555357 is distinguishable from the above-cited rulings as the single length of ribbon was the sole component which was knotted to form a bow. There was no joinder of two or more separate components as required by HTSUS subheading 9802.00.80.

In the present case, we find that the first method of creating bows, whereby a cut-to-length ribbon is stitched to the upper and the subsequently-formed bow is tacked through its center to the upper, constitutes an acceptable assembly of two or more components pursuant to 19 CFR 10.16(a). Moreover, cutting the ribbon to length and forming the bow qualify as operations incidental to assembly.

With respect to the formation of the rosette/bow, we are of the opinion that the ribbon is exported in condition ready for assembly without further fabrication. Repeatedly stitching the ribbon to itself to form the rosette constitutes an acceptable assembly. See HRL 555476, February 23, 1990 in which we ruled that forming a ribbon into the shape of a rose and sewing the ribbon rose to itself to retain its shape are acceptable assembly operations or operations incidental thereto.

The cases of L'eggs Products Inc. v. United States, 704 F. Supp. 1127 (Ct. Int'l Tr. 1989); and Baylis Bros. Co. v. United States, 64 Cust. Ct. 256, C.D. 3987 (1970, aff'd, 59 CCPA 9, C.A.D. 1026, 451 F.2d 643 (1971), modified, 474 F.2d 1026 (1973), also involved the use of thread as a joining agent. The issue in Baylis was whether certain imported dress fronts, which were shirred or smocked abroad were eligible for item 807.00, TSUS treatment. The court stated that:

...[t]he smocking operation is well within the common meaning of the term 'assembly,' since the operation merely consists in joining the two components together according to the stenciled designs. Id. at 59 CCPA at 11, 451 F. 2d at 645.

The two components involved in the shirring operation were the fabric and the thread. Similarly, in L'eggs, the sewing of knit tubes or leg blank portions of pantyhose closed by thread was held to be an acceptable assembly operation pursuant to item 807.00, TSUS. Thread was used to join the tube to itself by sewing the tube ends closed. The court held that "[s]ince the tube closing operation joined two components together, namely thread and fabric, it is an 'assembly' as the term was applied in Baylis."

Therefore, consistent with the foregoing and our previous decisions, we find that twisting and rolling the ribbon to form the rossette, forming a bow from additional lengths of ribbon, stitching the bow to the rossette, and attaching the rossette/bow to the slipper upper by sewing, constitute acceptable assembly operations or operations incidental thereto.

HOLDING:

On the basis of the information provided, it is our opinion that stitching a U.S.-made ribbon to a slipper upper, forming the ribbon into a bow and then tacking the bow to the upper constitute acceptable assembly operations or operations incidental to assembly. Similarly, creating a rossette/bow by repeatedly twisting and sewing ribbon to itself, forming the ribbons into a bow, stitching the bow to the rossette and then attaching the rossette/bow to the upper by sewing qualify as acceptable assembly operations or operations incidental thereto. Therefore, allowances in duty may be made under subheading 9802.00.80, HTSUS, for the cost or value of the U.S. ribbons, upon compliance with the documentary requirements of 19 CFR 10.24.

Sincerely,

John Durant, Director
Commercial Rulings Division

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