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HQ 557613


June 27, 1994

CLA-2 CO:R:C:S 557613 BLS

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80

Lori A. D'Agostino
Goff & Page Company
P.O. Box 9248
Providence, R.I. 02940

RE: Applicability of the partial duty exemption under subheading 9802.00.80, HTSUS, to flat elastic braid

Dear Ms. D'Agostino:

This is in reference to a letter dated September 30, 1993, from a former representative of Goff & Page, and other correspondence, requesting a ruling concerning the tariff treatment of flat elastic braid to be imported from Mexico. We have received additional information in connection with the process to be performed in Mexico from David L. Lavoie, North East Knitting Inc. (the importer), by letter dated June 16, 1994, and by telephonic communication. Samples of the materials and the finished braid have been submitted.

FACTS:

The elastic braid consists of two different materials, i.e., a polyester fiber of a thread-like consistency, and rubber thread made from natural latex. You state that both materials are of U.S.-origin. The polyester fiber is received from the U.S. manufacturer wound onto large tubes, approximately 11" in length and 7" to 10" in diameter. The rubber thread is manufactured in various gauges ranging from a coarse 22 gauge to a fine 110 gauge, and shipped to Mexico in boxes.

In Mexico, the rubber thread is fed from beneath the braiding machine under tension. As this is being done, the small tubes of polyester yarn travelling on "carriers" are braided around the thread to hold it in place. When tension is released, elastic braid is formed. The finished elastic braid is cut to length, packaged, and returned to the U.S.

ISSUE:

Whether the elastic braid is eligible for the partial duty exemption under subheading 9802.00.80, Harmonized Tariff Schedule
of the United States (HTSUS), upon importation.

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, Customs Regulations (19 CFR 10.24).

Section 10.16(a), Customs Regulations (19 CFR 10.16(a)), provides, in part, that the assembly operations 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 operation. See 19 CFR 10.16(a). However, any significant process, operation, or treatment whose primary purpose is the fabrication, completion, or physical or chemical improvement of a component, or which is not related to the assembly process, precludes the application of the exemption under subheading 9802.00.80, HTSUS.

We have held that the twisting of yarns on a machine to form twines is an acceptable assembly operation because it is a method used to combine or join yarns, which are solid components. See Headquarters Ruling Letter (HRL) 555128 dated January 9, 1989. However, we have also held that passing yarn through braiding machines to produce braided rope and cordage is analagous to weaving fabrics from spun yarn, and is considered a manufacturing rather than an assembly process. See HRL 554531 dated May 29, 1987. See also HRL 555128, supra (braiding 3-ply nylon rope into

8-strand plaited rope does not constitute an acceptable assembly operation); and HRL 556627 dated June 3, 1992 (braiding leather into belts held not to be an acceptable assembly operation).

In the instant case, the braiding of the rubber and polyester to form elastic braid is analagous to the production of braided rope and cordage from yarn, and the braiding of leather into belts. Therefore, the operation performed in Mexico is considered a manufacturing process and not an assembly operation within the contemplation of subheading 9802.00.80, HTSUS.

HOLDING:

Upon return to the U.S., the elastic braid will not be eligible for an allowance in duty under subheading 9802.00.80, HTSUS, since the braiding operation performed abroad does not constitute an acceptable assembly operation under the statute.

Sincerely,

John Durant, Director
Commercial Rulings Division

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