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HQ 954260


May 4, 1994

CLA-2 CO:R:C:F 954260 ALS

CATEGORY: CLASSIFICATION

TARIFF NO.: 9507.90.8000; 9801.00.1098; 9802.00.8060

Mr. Gordon C. Anderson
Meyer Customs Brokers
8100 Mitchell Road, Suite 200
Eden Prairie, MN 55344

RE: Child's Fishing Kit

Dear Mr. Anderson:

This is in response to your request of April 30, 1993, to our New York Seaport Area Office, for a binding ruling on the Berkley Cub Fishing Kit, a child's fishing kit. Your request and the sample included therewith were referred to this office for further consideration.

FACTS:

The article under consideration is a child's fishing kit. It is made primarily of plastic and consists of a fishing reel permanently connected to an eleven inch long fishing rod, and a tackle box which is designed to be attached to the rod for storage and transport convenience. The tackle box measures approximately 6 x 3 1/4 x 1 1/2 inches and contains a packet of five metal hooks, a packet of 3 sinkers, a line bobber, and a packet of artificial bait. The reel contains a spool holding about 10 feet of fishing line with a plastic casting plug. The bait and line are stated to be of U.S. origin and are shipped to China where the line is cut to size and put on the reel and the bait packed in a plastic bag. All of the other components are manufactured in China. The complete kit will be imported from China in one retail package.

ISSUE:

1. What is the classification of the fishing kit? 2. Are the U.S. manufactured components which are incorporated in the kit eligible for duty free treatment under subheading 9801.00.10 or 9802.00.80, Harmonized Tariff Schedule of the United States Annotated (HTSUSA)? 3. How should the kit be marked for country of origin purposes?

LAW AND ANALYSIS:

Classification of merchandise under the HTSUSA is governed by the General Rules of Interpretation (GRI's) taken in order. GRI 1 provides that the classification is determined first in accordance with the terms of the headings and any relative section and chapter notes. If GRI 1 fails to classify the goods and if the heading and legal notes do not otherwise require, the remaining GRI's are applied, taken in order.

In considering the classification of the child's fishing kit we note that no one subheading fully describes the article. Therefore, the article cannot be classified in accordance with GRI 1. Since the article is made up of various components which if imported separately would be classifiable under different subheadings, we must refer to GRI 3 to classify the kit. In this regard we note that the individual components are classifiable as follows: the fishing rod in subheading 9507.10, HTSUSA, the reel in subheading 9507.30, HTSUSA, and the tackle box and tackle contents in subheadings 9507.20 and 9507.90, HTSUSA.

GRI 3(a) provides that a composite article such as the instant kit is to be classified in the heading which provides the most specific description. Since the description of the various components is equally specific the kit cannot be classified under GRI 3(a). Accordingly, we must next consider the classification of the kit under GRI 3(b) which covers, among other things, composite goods consisting of different components and goods put up in sets for retail sale.

Explanatory Note X to GRI 3(b), which represents the opinion of the international classification experts, provides that merchandise is a set put up for retail sale if it is composed of: (a) at least 2 different items classifiable in different headings (or subheadings); (b) it consists of items put up together to meet a particular need, (here, specifically, to serve as a introductory sport fishing device); and (c) it is put up in a - 3 -
manner suitable for sale directly to users without repacking, in a retail package. Goods classifiable under GRI 3(b) are classified as if they consisted of the material or component which gives them their essential character, which may be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the article.

In this regard the inquiry suggests that the reel component plays the principal role in the use of the article and that it, therefore, imparts the essential character of the article. The cost comparison of that component to the other components is listed as the basis of such suggested classification. While relative cost is a persuasive factor it is not conclusive. It is necessary to consider the relationship and significance of the various components. In this regard we note the role the rod plays in relation to the use of the article and bulk and quantity of the fishing tackle box and contents.

In considering all these factors we have concluded that the various components are equally essential to the kit's performance of the function for which it was designed. Accordingly, we must refer to GRI 3(c) which provides that when goods cannot be classified by reference to GRI 3(a) or (b), they are to be classified in the heading which occurs last in numerical order among those which equally merit consideration in determining their classification.

Accordingly, by virtue of GRI 3(c) the kit would be classified in the heading which occurs last in numerical order among those which equally merit consideration, leading us to subheading 9507.90.8000, HTSUSA.

We next considered whether any of the components are eligible for duty- free entry under the provisions of chapter 98, HTSUSA. The U.S. origin artificial bait is eligible for duty-free entry under subheading 9801.00.10, HTSUSA. The bait is manufactured in the United States, exported and returned without having been advanced in value or improved in condition by any means while abroad. Neither its inclusion in the kit with the China origin fishing tackle and rod, nor its tariff status as components of a set precludes its eligibility for duty-free entry under subheading 9801.00.10, HTSUSA. See T.D. 91-7 ("[C]laims for Subheading 9801.00.10, HTSUS, treatment for components or items comprising a portion of imported unassembled articles, sets, composite goods, and other such combination, shall be - 4 -
granted for those components or items satisfying the conditions and requirements of this tariff provision.").

Regarding the U.S. origin fishing line exported to China where the line is cut to size and wound on the reel, subheading 9802.00.80, HTSUSA, provides a partial duty exemption for articles:

...assembled aboard 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.

Section 10.14(a), Customs Regulations (19 CFR 10.14(a)), provides, 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(b)(6), Customs Regulations (19 CFR 10.16(b)(6)), states that the cutting to length of wire, thread, tape, foil, and similar products exported in continuous length is an example of an operation incidental to the assembly process.

In this case, it appears from the information submitted that the U.S. line to be sent to China will be entitled to the duty exemption available under subheading 9802.00.80, HTSUSA, upon return of the assembled product. The cutting to length of the fishing line comprising the reel spool is considered an operation incidental to the assembly process pursuant to section 10.16(b)(6), Customs Regulations. Moreover, fitting the line component onto the reel spool is an acceptable means of assembly. See General Instrument corp. v. United States, C.A.D. 1128, 61 CCPA 86, 499 F. 2d 1318(1974) (despooling and winding operations to form coils constitute assembly steps rather than "further - 5 -
fabrication" within the meaning of the tariff provision), and Headquarters Ruling Letter (HRL) 555505, dated December 28, 1989, (abstracted as C.S.D. 90- 32(1)) (winding foil and Mylar to form cylinders for automobile condensers is an acceptable assembly operation). Thus, duties will be assessed against the full value of the imported set (excluding the U.S. artificial bait material discussed above) less the value of the U.S. fabricated line component, upon compliance with the documentary requirements of section 10.24, Customs Regulations (19 CFR 10.24).

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides, subject to specified exceptions, that every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or container) will permit, in such manner as to indicate to the ultimate purchase in the U.S. the English name of the country of origin of the article. Neither the statute nor the Customs Regulations contains any provisions regarding the marking of sets and that in the absence of any special requirements, the general country of origin marking requirements apply, i.e., every article that is imported into the U.S. must be marked to indicate its country of origin as determined by where the article underwent its last substantial transformation. See T.D. 91-7. As discussed in T.D. 91-7, the relevant inquiry regarding the marking of the materials or components in a set is whether the items have been substantially transformed as a result of their inclusion in the set. Absent a substantial transformation, each item (or its container) must be marked to indicate its own country of origin.

In this case, the components of the set include the fishing reel, the rod and a tackle box. None of these components is substantially transformed as a result of its inclusion in the set. As such, we must determine the country of origin of these various components. Pursuant to 19 CFR 10.22, the country of origin of the reel is China. (Under this provision, assembled articles entitled to an exemption under subheading 9802.00.80, HTSUSA, are considered products of the country of assembly. As indicated above, the reel, which consists in part of a U.S. line assembled in China, is so eligible.) Since all the remaining components (except for the bait which is stated to be of U.S. origin and thus not subject to the requirements of 19 U.S.C. 1304) are manufactured in China, the country of origin of the rod and the tackle box would also be China. These items must be marked to indicate that the country of origin is China. Alternatively, one origin marking may appear in a central - 6 -
location so long as it is clear that such marking applies to the whole kit. If the fishing kit is imported and sold in a retail container and Customs is satisfied that such retail container will reach the retail purchaser, the retail container may be marked in lieu of the items in the set.

HOLDING:

A child's fishing kit composed of a rod, a permanently attached reel, fishing line, tackle and a tackle box, designed to be attached to the rod for storage and transport convenience, which contains a packet of hooks, a packet of sinkers, a line bobber and artificial bait, all primarily of plastic, is classifiable in subheading 9507.90.8000, HTSUSA, the provision for fishing rods, fish hooks and other line fishing tackle;...other: other, including parts and accessories: other. Articles so classifiable are subject to a general rate of duty of 9 percent ad valorem.

The instant article is subject to duties on the full value of the imported set (excluding the U.S. artificial bait material) less the value of the U.S. fabricated line component, upon compliance with the documentary requirements of section 10.24, Customs Regulations, in accordance with subheadings 9801.00.1098 and 9802.00.8060, HTSUSA.

The fishing kit must be conspicuously marked "China" as set forth above.

Sincerely,

John Durant, Director

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