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HQ 556265


January 15, 1992

CLA-2 CO:R:C:S 556265 DSN

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80

Mr. Philip Freeman
Cain Customs Brokers, Inc.
421 Texano
P.O. Box 150
Hidalgo, Texas 78557

RE: Reconsideration of HRL 555539 of June 7, 1990; tinning;

Dear Mr. Freeman:

This is in response to your letter of September 13, 1991, on behalf of Deltron, Inc., requesting reconsideration of Headquarters Ruling Letter (HRL) 555539 of June 7, 1990, concerning the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to toroids to be imported from Mexico. You specifically seek reconsideration of our holding that tinning the ends of U.S.-origin magnet wire in Mexico precludes an allowance in duty for the cost or value of wire.

FACTS:

According to your submissions, the tinning operation, which is performed after magnet wire is assembled to a ferrite core by winding, consists of dipping the ends of the wire in flux and then into melted solder. This operation is performed to allow assembly of the completed toroid into a printed circuit in the U.S. without further preparation of the leads for electrical connection.

You state that the time and cost of the tinning operation when compared to the total time and cost of the entire assembly operation ranges from 3.3% to 7.3%. No comparative time and cost information was available when this issue was considered in HRL 555539.

ISSUE:

Whether the tinning operation constitutes an operation incidental to assembly for purposes of subheading 9802.00.80, HTSUS.

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, lubrication, 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 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).

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

Based on the information provided in your submission regarding the cost and time of the tinning operation, we conclude that the operation is minor in comparison to the total assembly of the toroids. The range of 3.3% to 7.3% for the tinning operation reflects the minor nature of this process when compared to the assembly of the toroids.

HOLDING:

On the basis of the information provided, it is our opinion that the tinning operation is considered an operation incidental to assembly. Therefore, allowances in duty may be made under this tariff provision for the cost or value of the U.S. magnet wire.

HRL 555539 is hereby modified in accordance with this ruling.

Sincerely,

John Durant, Director
Commercial Rulings Division

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