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NY 805589




January 06, 1995

CLA-2-95:S:N:N8:224 805589

CATEGORY: CLASSIFICATION

TARIFF NO.: 9507.90.7000; 9802.00.80

James Greene
Mayfly Enterprises Ltd.
P.O. Box 151028
Chevy Chase, MD 20815

RE: The tariff classification of fishing flies from Kenya.

Dear Mr. Greene:

This is in response to your letter of December 14, 1994, concerning the eligibility for a duty exemption under subheading 9802.00.80, Harmonized Tariff Schedules of the United States Annotated (HTSUSA), for U.S.- origin materials sent to Kenya to be assembled with other components to create fishing flies.

The finished articles under consideration are fishing flies to be used for fresh and salt-water sport fishing. It is stated that the flies are assembled in Kenya from fur (such as rabbit skins and deer hair), hackle (in the form of feather capes and saddles from domestic U.S. chickens and loose feathers) and thread, purchased in the U.S. and sent to Kenya. The hooks making up the fishing flies are of both U.S. and English origin. The flies are assembled into finished form from the above raw materials and then shipped back to the U.S. The raw materials comprise an average of approximately 80 percent of the F.O.B. value of the finished flies; hooks and labor account for around 10 percent each.

The applicable subheading for sport fishing flies will be 9507.90.7000, HTSUSA, which provides for "Fishing rods, fish hooks and other line fishing tackle...: Other: Other, including parts and accessories: Artificial baits and flies." The rate of duty will be 9 percent ad valorem.

Partial Duty Exemption

For your information, subheading 9802.00.80, HTSUSA, 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, HTSUSA, 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 the U.S. components assembled therein, 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.

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.

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 HTSUSA subheading 9802.00.80 to that component. See, 19 CFR 10.16(c).

Your letter does not make clear what specific components and materials are used in the manufacturing or assembly process, specifically which components and raw materials are U.S. made or grown, or the physical condition of the U.S. components at the time they are exported for eventual "assembly" in Kenya. Nor does it provide detailed documentary information relating to the nature of the processing and assembly operations performed in Kenya on the U.S. materials and components. This documentary information should be submitted to the appropriate Customs officers at the port of entry for their review.

Once it is determined that a qualifying assembly operation takes place in Kenya involving materials of U.S. origin, we agree with your suggestion that it would be more reasonable, for purposes of identifying the duty-exempted fly components, to establish an acceptable production average figure for each raw material or component of U.S. origin used in assembling the flies on the basis of prevailing industry standards. Again, these production averaging standards should be submitted to the appropriate Customs officers at your intended port of entry well prior to importation of the finished fishing flies.

This ruling is being issued under the provisions of Section 177 of the Customs Regulations (19 C.F.R. 177).

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is imported. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

Jean F. Maguire
Area Director

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