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HQ 559961




March 3, 1997

CLA 02 RR:TC:SM 559961 KKV

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.90

Mr. Jack Alsup
Alsup & Alsup, Inc.
P.O. Box 1251
Del Rio, TX 78841

RE: Applicability of subheading 9802.00.90, HTSUS, to motor vehicle safety seat belts; Special Regime Program; findings; sewing; cutting to length; removing excess material; printing perforated labels; Article 509

Dear Mr. Alsup:

This is in response to your letter dated June 17, 1996 (and subsequent submissions dated July 12, 1996, July 23, 1996, February 7, 1997 and February 17, 1997) on behalf of Takata Seat Belts, Inc, which requests a ruling concerning the applicability of subheading 9802.00.90, Harmonized Tariff Schedule of the United States (HTSUS), to certain motor vehicle safety seat belts imported from Mexico. Although your letter indicates that two samples (part # 10277258 and part # 22659015) are enclosed for our examination, no samples were received..

FACTS:

We are informed that Takata Seat Belts, Inc. (hereinafter, "Takata") imports motor vehicle safety seat belts, manufactured by their Mexican subsidiary, into the U.S. under subheading 8708.21.0000, HTSUS. Takata uses various components comprised of different materials in assembling the seat belts in Mexico. These components include the following:

1) Fabric components or "webbing" of nylon used for the strap. The webbing, wholly formed (woven) and cut in the U.S. (but not to length), measures 47 millimeters wide and 274 meters in length and is exported to Mexico on
rolls or spools. In the assembly process, this material will be unspooled and cut to length.

2) Other fabric and non-fabric components of U.S. origin used in the assembly process, asserted to be "findings and trimmings," such as an identification label, child warning label, thread and a plastic stop button. The identification labels are shipped to Mexico in perforated sheets and printed in Mexico, then separated and sewn to the belt webbing. We are informed that the total cost of these items does not exceed 25% of the total cost of the components and findings.

3) Other non-textile components such as plastic and metal. These non-fabric components include frames, supports, arms, weights, latches, bearings, screws, rings, cams, springs, pin-latches, bearing shafts, ratchets, ratchet guards, cylinders, shafts, web guide covers, escutcheons, tip inserts, tip covers, buttons, anchor plates, layer covers, bases, tie bars, straps, guides, shafts, lock gears, flywheels, pawls, retainers, weights, actuators, sensors, housings, pads, carton bottoms and pallets. These components may be both of U.S. and foreign manufacture.

We are informed that the sequential assembly operation in Mexico for part # 10277258 (F-Body Front Seat Retractor) is as follows:

Assemble ring to latch and bearings.
Screw cam to latch. Assemble latch and pin to frame and place Julian date label on frame. Assemble support, arm and weight. Spin, stake support and bushing.
Assemble ratchet. Press pad to ratchet.
Cut webbing to length. Sew triple zig-zag pattern in webbing to form a loop for the shaft. Print I.D. label. Sew I.D. label. Sew warning label to webbing.
Check webbing 100%. Ratchet, webbing, shaft and bushing. Press shaft. Grease spring. Wind spring. Screw spring housing. Check air gap. Checker.
Assemble webbing guide to cover. Lace and place cover. Press cover, check and mark. 0.6 G-Tester. 45 degree test and assemble upper cover. Assemble free fall tip. Lace escutcheon and free fall tip.
Assemble protector to anchor. Lace anchor and sew X box pattern. Place stop button. Pull sleeve and label. Sew bar tack on sleeve. 100% final check. Make box. Pack.

We are informed that the sequential assembly operation in Mexico for part # 22659015 (J-Body Front Seat Retractor) is as follows:

Press tie bar to frame. Press metal strap to frame. Check strap. Assemble sensor (weight to case, actuator and cap). Wind spring to frame and sensor.
Assemble pawl A/spring, lock gear and pin. Assemble pawl B and screw.
Assemble hook spring and flywheel to shaft. Assemble shaft subassembly, guide and cover. Press pins on cover to secure sensor and shaft. Cut webbing to length.
Place heat label on webbing. Thread webbing through shaft, place pin and sew pin pattern in webbing. 0.6 G and 45 degree test. Assemble free fall tip.
Thread webbing through tip, guide and anchor. Sew X box pattern in webbing.
Press stop button in webbing. Pull boot over anchor. Tack stitch boot to webbing. Final inspection. Ink jet identification. Pack.

ISSUE:

Whether the motor vehicle safety seat belts will be eligible for duty-free treatment under subheading 9802.00.90, HTSUS, upon importation into the U.S.

LAW AND ANALYSIS:

Annex 300-B of the North American Free Trade Agreement ("NAFTA") is applicable to textile and apparel goods. Appendix 2.4 of Annex 300-B provides that:

On January 1, 1994, the U.S. shall eliminate customs duties on textiles and apparel goods that are assembled in
Mexico from fabrics wholly formed and cut in the United States and exported from and reimported into the United States under:

(a) U.S. tariff item 9802.00.80.10; or

(b) Chapter 61, 62, or 63 if, after such assembly, those goods that would have qualified for treatment under
9802.00.80.10 have been subject to bleaching, garment dyeing, stone-washing, acid-washing or perma-pressing.

Thereafter, the U.S. shall not adopt or maintain any customs duty on textile or apparel goods of Mexico that satisfy the
requirements of subparagraph (a) or (b) or the requirements of any successor provision to U.S. tariff item
9802.00.80.10.

Consequently, subheading 9802.00.90, HTSUS, was created to provide for the duty-free entry of:

Textile and apparel goods, assembled in
Mexico in which all fabric components were wholly formed and cut in the United
States, provided that such fabric components, in whole or in part, (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; provided the goods classifiable in chapters 61, 62, or 63 may have been subject to bleaching, garment dyeing, stone-washing, acid-washing or perma-pressing after assembly as provided for herein.

The initial question we must address is whether the subject motor vehicle safety seat belt is considered a "textile and apparel good" under subheading 9802.00.90, HTSUS. Your letter indicates that the article at issue is classified under subheading 8708.21.00, HTSUS, which provides for "Parts and accessories of the motor vehicles of headings 8701 to 8705: other parts and accessories of bodies (including cabs): safety seat belts.

Effective July 1, 1996, the country of origin for textile articles is determined according to the origin rules set forth in 19 CFR 102.2. Section 102.21(b)(5) provides that a "textile or apparel product" is any good classified in Chapters 50 through 63, HTSUS, and any good classifiable under certain enumerated HTSUS headings or subheadings, including subheading 8708.21. Thus, under the facts presented, the subject safety belt, which is classifiable under subheading 8708.21.0000 qualifies as a "textile and apparel good" for purposes of subheading 9802.00.90, HTSUS.

The enactment of subheading 9802.00.90, HTSUS, was intended to extend duty-free and quota-free status to all goods assembled in Mexico, which previously were eligible for entry under the Special Regime Program administered under subheading
9802.00.8010, HTSUS. As a result, it is Customs view that all of the policy directives implementing this program should be considered applicable for the administration of subheading 9802.00.90, HTSUS. One such policy under the Special Regime Program included the allowance of "findings, trimmings, and certain elastic strips of foreign origin" to be incorporated into the assembled good "provided they do not exceed 25 percent of the cost of the components of the assembled product." Examples of findings and trimmings are sewing thread, hooks and eyes, snaps, buttons, "bow buds," lace trim, zippers, including zipper tapes, and labels. See 53 Fed. Reg. 15726 (May 3, 1988).

With regard to the subject safety belts, you assert that the identification label, the child warning label, thread and a plastic stop button qualify as "findings" whose cost does not exceed 25% of the cost of the components and findings. However, inasmuch as you indicate that these articles are of U.S. origin, it is unnecessary to determine whether they qualify as findings because the allowance for findings and trimmings relates only to foreign items.

Because subheading 9802.00.90, HTSUS, was intended as a successor provision to subheading 9802.00.80, HTSUS, with respect to certain textile and apparel goods assembled in Mexico, the regulations under subheading 9802.00.80, HTSUS, may be instructive in determining whether an assembly process would render an article eligible for the beneficial duty treatment accorded by subheading 9802.00.90, HTSUS. (In this regard, however, as distinguished from subheading 9802.00.80, HTSUS, it is noted that subheading 9802.00.90 requires only that all fabric components be formed and cut in the U.S., and that only such components, in whole or in part, need be exported from the U.S. in condition ready for assembly without further fabrication.)

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.

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 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 HTSUS subheading 9802.00.80 to that component. See, 19 CFR 10.16(c). Examples of operations incidental to the assembly process include trimming, filing, or cutting off of small amounts of excess materials, and cutting to length of wire, thread, tape, foil and similar products exported in similar length (19 CFR 10.16(b)(4) and

In the instant case, the sewing and gluing operations used to join the fabric components, or to join fabric components to other items, are acceptable assembly operations. Cutting various fabric components to length and cutting off excess thread are operations incidental to the assembly process, and therefore will not disqualify the article from eligibility under subheading 9802.00.90, HTSUS. See Headquarters Letter Ruling (HRL) 557875, dated May 4, 1995

Moreover, with regard to the perforated identification labels exported to Mexico, Custom has previously held that the printing and affixing of labels will not disqualify an article for duty-free treatment under subheading 9802.00.80. In C.S.D. 79-314, 13 Cust. Bull. 1468 (1979), Customs determined that printing which serves the purpose of "origin markings, trademark, polarity, color coding, part number identification, or instruction for use," would not preclude tariff treatment under item 807.00, TSUS (the predecessor of subheading 9802.00.80, HTSUS). See also, HRL 557685, dated March 28, 1995.

Accordingly, the motor vehicle safety seat belts assembled in Mexico may be entered free of duty, provided all fabric components are woven or milled in the U.S., the fabric is cut in the U.S. (except for cutting to length), and any foreign findings, trimmings, and elastic strips do not exceed 25 percent of the cost of all components.

HOLDING:

1) Based on the information provided, a motor vehicle safety seat belt classifiable under subheading 8708.21.0000, HTSUS, qualifies as a "textile and apparel good" pursuant to 19 CFR 102.21(b)(5) for purposes of determining its eligibility under subheading 9802.00.90, HTSUS.

2) Because the operations performed in Mexico in connection with the fabric components are acceptable assembly operations or operations incidental to such assembly, the imported motor vehicle safety belts qualify for duty-free treatment under subheading 9802.00.90, HTSUS, provided all such components are cut and formed in the U.S., and the cost of all foreign findings and trimmings do not exceed 25 percent of the cost of the components of the assembled article.

A copy of this ruling letter should be attached to the entry documents filed at the time the goods are 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, Director

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