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HQ 559630




May 14, 1996

CLA-2 RR:TC:SM 559630 DEC

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80

Mr. Michael E. Roll
Katten Muchin & Zavis
525 Monroe Street - Suite 1600
Chicago, Illinois 60661-3693

RE: Applicability of partial duty exemption under subheading 9802.00.80, HTSUS, to leukocyte reduction administration sets; HRL 556800; HRL 557044; HRL
554885,

Dear Mr. Roll:

This is in response to your letter dated January 5, 1996, on behalf of your client, Baxter Healthcare Corporation of Puerto Rico, Incorporated (Baxter), concerning the eligibility of certain leukocyte reduction administration sets assembled in the Dominican Republic for a partial duty exemption under subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The product at issue in this ruling is a leukocyte reduction administration set (Model 4C-2442). You state that the article is designed to perform leukocyte-poor blood transfusions. Removing leukocytes from whole blood or red blood cell products is essential in helping to reduce the risk of posttransfusion complications such as non-hemolytic febrile reactions, HLA allimmunization, and possibly, CMV transmission. The SEPACELL filter used in the leukocyte reduction administration set provides both high leukocyte removal and excellent red blood cell recovery, particularly with post-use saline rinsing. There are various configurations of leukocyte reduction administration sets. The configurations vary based on factors such as tubing length and number of fittings or couplers. This request addresses a representative code, the 4C-2442. You have enclosed marketing literature and a production sample of the model 4C-2442.

You state that the following components used to produce the model 4C-2442 are of U.S. origin. The list of components is as follows:

Component Quantity

4" tubing 1
30" tubing 1
6" tubing 2
12" tubing 1
1.5" tubing 1 bushing 2 housing assembly 1 drip chamber 1 adapter cap 1 roller clamp 1 mini clamp 3 male luer lock 1
"Y" junction 2 molded "Y" site 1 tip protector 3 coupler 3

In addition, Baxter uses a SEPACELL leukocyte removal filter that is of Japanese origin.

You state that the assembly of the 4C-2442 leukocyte removal filter in the Dominican Republic involves a production line with 17 work stations and that the components are manually fitted together and solvent bonded. The processing performed at each work station is as follows:

Station(s) Work Performed
(1) Attach bushings to the SEPACELL filter and 4" tubing to the bushing.
(2) Attach the drip chamber to the adapter cap, the free end of the 4" tubing to the adapter cap, and a 30" tubing to the other end of the drip chamber.
(3) Insert roller clamp on 30" tubing and attach molded "Y" site to the free end of the 30" tubing.
(4) Attach male luer lock to 6" tubing and attach the free end of the 6" tubing to the molded "Y" site.

(5) Attach 12" tubing to the SEPACELL filter housing assembly and attach the housing assembly to bushing.
(6) Attach 1.5" tubing to a "Y" junction, attach free end of the 1.5" tubing to another "Y" junction, and attach free end of 12" tubing to first "Y" junction.
(7) Attach 6" tubing to "Y" junction, insert a mini-clamp on the 6" tubing, and attach the free end of the 6" tubing to the free end of the "Y" junction.
(8-9) Attach 4" tubing to "Y" junction, insert mini-clamp on 4" tubing, and attach free end of 4" tubing to "Y" junction. (10-11) Check for leaks using Keslab leak testing machine. (12) Attach tip protectors to each coupler. (13-16) Package product in paperboard, place insert in plastic pouch, insert product in pouch.
(17) Place package in Doboy sealing machine.

The leukocyte reduction administration sets are then exported to the United States for sterilization.

ISSUE:

Whether the processing described above with respect to the production of the leukocyte reduction administration sets constitutes acceptable assembly operations or operations incidental thereto, thereby qualifying the leukocyte reduction administration sets for a partial duty exemption pursuant to subheading 9802.00.80, HTSUS.

LAW AND ANALYSIS:

Subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), provides for 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 United States components assembled abroad, provided the section 10.24, Customs Regulations (19 CFR 10.24), documentary requirements are satisfied.

Section 10.14(a), Customs Regulations (19 CFR 10.14(a)), states, in part, that

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

Section 10.16(a), Customs Regulations (19 CFR 10.16(a)), provides that assembly operations for purposes of subheading 9802.00.80 encompass any method used to join together solid components such as sewing, welding, soldering, riveting, force fitting, gluing, or the use of fasteners and may be accompanied by operations that are incidental to the assembly as provided in section 10.16(b). In this case, the operations that are under consideration for the subheading 9802.00.80, HTSUS, partial duty exemption include the various operations detailed above that involve the attachment of the tubings, bushing, housing assembly, drip chamber, clamps, coupler, etc.

You cite Headquarters Ruling Letter (HRL) 556800, dated March 15, 1994, in which Customs addressed the eligibility of an anesthesia breathing circuit for a partial duty exemption under subheading 9802.00.80, HTSUS. In HRL 556800, we concluded that a bushing placed around the opening of a breathing bag and secured with a rubber band was a qualifying assembly operation. The bushing was of Mexican origin and the rubber band was of U.S. origin. The hoses and breathing bags were packaged together in Mexico and resold in the U.S. In addition, you cite HRL 557044, dated March 31, 1993, and HRL 554885, dated February 23, 1990, in which Customs held that the joining of numerous solid components to assemble disposable plastic medical equipment qualified as acceptable operations under subheading 9802.00.80, HTSUS. Customs also has held in HRL 554885, dated February 23, 1990, that joining components together by sonic welding, using holding fixtures, and solvent sealing was deemed to constitute acceptable methods of assembly. Similarly, the components in this case are assembled by manually force fitting them together and solvent bonding them. Therefore, the components undergo acceptable assembly operations for purposes of subheading 9802.00.80, HTSUS.

HOLDING:

On the basis of the information and samples submitted, we conclude that the U.S. components in the leukocyte reduction administration sets are exported in condition ready for assembly without further fabrication, do not lose their physical identity in the assembly operation, and are not advanced in value or improved in condition abroad except by assembly operations and 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. fabricated components incorporated into the leukocyte reduction administration sets upon their return to the United States, provided the documentary requirements of 19 CFR 10.24 are satisfied.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. 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,

John Durant

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