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NY B86259





June 27, 1997

CLA-2-98:RR:NC:MM:109 B86259

CATEGORY: CLASSIFICATION

Ms. Mary E. Gill
Corporate Counsel, Customs Compliance
P.O. Box 20046
Room GC-C3A23
Greensboro, NC 27420-0046

RE: Eligibility of jumper cable and fiber optic pre-wired shelves from the Dominican Republic for duty-free treatment under U.S. Note 2(b), subchapter II, Chapter 98, HTSUS; de minimis

Dear Ms. Gill:

In your letter dated May 29, 1997, you requested a tariff classification ruling concerning the eligibility of jumper cable and fiber optic pre-wired shelves from the Dominican Republic for duty-free treatment under U.S. Note 2(b), subchapter II, Chapter 98.

The merchandise is described as jumper cable and fiber optic pre-wired shelves for use in telephone switching equipment. Your request includes detailed descriptions of the assembly process complete with pictures of the major processing steps, and bills of material for representative products. The subject merchandise is assembled with U.S. components in the Dominican Republic. The goods are shipped directly from the Dominican Republic into the United States. As per your letter and attached bills of material, there is less than one-tenth of one percent foreign content.

The bill of material for the jumper cable covers part numbers 107306318 and 106908288. The non-U.S. material is .00010% and .00008% of the total value respectively. The foreign material consists of resin and hardener.

The bill of material for the pre-wired shelves covers part numbers 107523706 and 107524035. The non-U.S. material is .00132% and .00263% of the total value respectively. The foreign material consists of resin, hardener, loctite, screws, nuts, and washers.

Section 222 of the Customs and Trade Act of 1990 (Public Law 101-382) amended U.S. Note 2, subchapter II, Chapter 98, HTSUS, to provide for the duty-free treatment of articles (other than textile and apparel articles, and petroleum and petroleum products) which are assembled or processed in a Caribbean Basin Economic Recovery Act (CBERA) beneficiary country (BC) wholly of fabricated components or ingredients (except water) of U.S. origin. This amendment was effective with respect to goods entered on or after October 1, 1990.

Note 2(b) provides as follows:

(b) No article (except a textile article, apparel article, or petroleum, or any product derived from petroleum, provided for in heading 2709 or 2710) may be treated as a foreign article, or as subject to duty, if--

(i) the article is--

(A) assembled or processed in whole of fabricated components that are a product of the United States, or

(B) processed in whole of ingredients (other than water) that are a product of the United States, in a beneficiary country; and

(ii) neither the fabricated components, materials or ingredients, after exportation from the United States, nor the article itself, before importation into the United States, enters the commerce of any foreign country other than a beneficiary country.

As stated in this paragraph, the term "beneficiary country" means a country listed in General Note 3(c)(v)(A).

Pursuant to General Note 3(c)(v)(A), HTSUS, the Dominican Republic has been designated as a BC for CBERA purposes.

The meaning of "assembled or processed in whole of fabricated components that are a product of the United States" was addressed in HRL 556013. We stated in HRL 556013 that:

[b]ased on the information you submitted, the cost of the adhesive represents approximately one percent of the total cost of the completed article. General Note 7(e)(i), HTSUS, states that, for purposes of the tariff schedule, the term "'wholly of' means that the goods are, except for negligible or insignificant quantities of some other material or materials, composed completely of the named material." It is our determination that although the enema tip assemblies are not made of 100% U.S. components and ingredients, the adhesive constitutes merely an insignificant portion of the entire article and, therefore, the presence of the foreign adhesive would not preclude application of duty-free treatment under Note 2(b).

(Note: GN 7(e)(i) is currently GN 19(e)(i), HTSUS)

HRL 557545 and 557735 have also addressed this issue. We have generally held that the presence of foreign-origin materials will not defeat eligibility under this provision where the cost of the foreign materials does not represent more than one percent of the total cost of the completed article and the foreign material is not an integral component of the completed article. We are of the opinion that in the instant case that the foreign material represents an insignificant or de minimis amount in comparison to the value of the completed goods. The foreign material also is not considered to constitute integral components of the completed articles. It functions to joint or fasten parts together during the assembly process.

On the basis of the information submitted, we are of the opinion that the jumper cable and fiber optic pre-wired shelves are made in the Dominican Republic "wholly of" materials of U.S. origin, and are entitled to duty-free treatment under Note 2(b), upon compliance with the imported directly and documentation requirements of this provision.

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

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Eileen S. Kaplan at 212-466-5673.

Sincerely,

Robert B. Swierupski
Chief, Metals & Machinery Branch

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