United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1998 HQ Rulings > HQ 560667 - HQ 560810 > HQ 560731

Previous Ruling Next Ruling
HQ 560731




January 30, 1998

CLA-2 RR:TC:SM 560731 KSG

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80

Port Director
U.S. Customs Service
Anchorage, Alaska

RE: Internal Advice: 9802.00.80; bows; assembly

Dear Director:

This is in reference to your memorandum of November 14, 1997, requesting Internal Advice on the eligibility of fabric bows imported by Lawrence Schiff Silk Mills, Inc. for a partial duty exemption under subheading 9802.00.80, of the Harmonized Tariff Schedule of the United States (HTSUS). Sample bows were submitted with your request.

FACTS:

U.S.-made ribbon is sent to Hong Kong in rolls where it is cut to length and assembled by sewing into bows. The finished bows are then imported into the U.S.

You submitted an assortment of sample bows. The samples can be divided into three types of bows. The first type is made of a single piece of ribbon which is formed into a bow and then sewn with thread to retain its shape. The second type is made of at least two pieces of ribbon. A bow is formed from one piece of ribbon, sewn with thread to retain its shape and then attached to a second piece of ribbon of a different color. The third type of bow is the same as the first type but beads are sewn onto the center of the bow.

ISSUE:

Whether the imported fabric bows are eligible for a partial duty exemption under subheading 9802.00.80, HTSUS?

LAW AND ANALYSIS:

Subheading 9802.00.80, HTSUS, provides a partial duty exemption for articles assembled abroad in whole or in part of fabricated components, the product of the U.S., 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 articles, less the cost or value of the U.S. component assembled therein, upon compliance with the documentary requirements of 19 CFR 10.24.

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 U.S. to qualify for the exemption. Components will not lose their entitlement to the exemption by being subject 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).

The U.S.-made ribbon in this case is sent abroad as a fully fabricated component ready for assembly. Section 10.16(b)(6), Customs Regulations (19 CFR 10.16(b)(6)) specifically allows cutting to length as an operation incidental to the assembly process. Bow formation has been held to be an operation incidental to the assembly process. See HRL 557462, dated September 13, 1994. Therefore, the only question presented is whether the three types of bows undergo acceptable assembly operations.

The first type of bows presents the most difficult question with regard to the assembly operation because it consists of a single piece of ribbon that is sewn with thread to retain its bow shape. The question of whether joining a component to itself with thread is an acceptable assembly operation under item 807.00, Tariff Schedules of the United States (TSUS) (the precursor to subheading 9802.00.80, HTSUS) was raised in L'Eggs Products, Inc., v. United States, 704 F. Supp. 1127 (CIT 1989). This case involved knit tubes of pantyhose with open ends sent to Colombia where the ends of the tubes are sewn with thread to close the ends and form the toes of the pantyhose. The court ruled that the joinder of the thread to the fabric (knit tubes) constituted an assembly operation within the meaning of item 807.00, TSUS, and that the importer was entitled to the duty allowance claimed under item 807.00.

The other case on point is Peg Bandage, Inc., v. United States,
17 CIT 1337 (1993). This case involved ACE bandages sent to Haiti where the ends were sewn with thread to prevent unraveling. The court stated that when the unsewn bandage is joined with thread, the result is a reusable elastic bandage. The court held that the sewing performed in Haiti is an assembly operation within the meaning of item 807.00, TSUS, because it is a process of joining two fully fabricated components.

Based on the above two cases, we find that the joinder of the thread to the ribbon is a permissible form of assembly under subheading 9802.00.80, HTSUS.

With regard to the bow types two and three, the bows are joined to a second piece of ribbon with thread or to beads sewn on with thread. Pursuant to 19 CFR 10.16(a), sewing as a method to join or fit together solid components is a permissible form of assembly under subheading 9802.00.80, HTSUS . Therefore, bow types two and three, which are sewn to join together two pieces of ribbon or to join together a piece of ribbon and beads, constitute permissible forms of assembly under subheading 9802.00.80, HTSUS.

HOLDING:

On the basis of the information provided, the imported bows assembled in Hong Kong are eligible for the partial duty exemption under subheading 9802.00.80, HTSUS, provided the documentary requirements of 19 CFR 10.24 are satisfied.

This decision should be mailed by your office to the internal advice requester no later than 60 days from the date of this letter. On that date the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division

Previous Ruling Next Ruling

See also: