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HQ 561061





July 30, 1998
CLA-2 RR:TC:SM 561061 KSG

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80

Jack Ryan
Customs Administrator
3M Center
P.O. Box 33250
St. Paul, MN 55133-3250

RE: Subheading 9802.00.80, HTSUS; fiber optic patch cords; 19 CFR 10.24

Dear Mr. Ryan:

This is in response to your letter of June 24, 1998, requesting a binding ruling on behalf of 3M regarding the applicability of subheading 9802.00.80 of the Harmonized Tariff Schedule of the United States ("HTSUS"), to imported fiber optic patch cords.

FACTS:

3M will be importing Volition fiber optic patch cords from Titron Technology, a Chinese company. All of the components are produced in the U.S. These components include: plug fiber holder tops, plug fiber holder bottoms, plug shrouds, plug doors, plug boots, plug springs, and two-fiber patch cable that is shipped on spools. You state that all of these components are shipped from the U.S. to China and arrive in China ready to be assembled into patch cords.

The operations performed in China by Titron are as follows: 1)the cable is unrolled from the spool and cut to length; 2) the ends of the cable are then threaded through plastic boots, one on each end; 3) the ends of the cable are placed in clamshell fixtures; 4) two inches of sheathing are removed from the end of the cable; 5) exposed kevlar fibers are removed by cutting with scissors; 6) plastic fiber on the exposed optical fiber is removed, exposing the glass fiber; 7) the fiber is cleaned with an alcohol wipe and checked for the correct length; 8) the exposed fibers are threaded through a connector; 9)hot melt glue is applied, fastening the cable onto the rear of the connector; 10) the glue is cured with a curing light; 11) the clamshell is removed, the boot is slid over the cable end of the connector; 12)the cable is inserted into a cleaver which cuts off excess length; the exposed end of the fiber is beveled; 13) the exposed ends are cleaned and hand polished. The cables are then visually inspected with a microscope and tested with a light source; 14) the springs are inserted into a connector and ultrasonically welded into place; 15) the connectors are ultrasonically cleaned and tested; and 16) a final visual check is done and a protective plastic shroud is snapped onto the connector.

About 25 percent of the patch cords will then be shipped from Titron to Shanghai where 3M Shanghai will cut the patch cords in half and assemble new terminals onto the unfinished ends in the same manner as described above. These cables will have a Voliton terminal on one end and another type of terminal on the other end. The patch cords will then be shipped to Austin, Texas through the port of McAllen, Texas.

ISSUE:

Whether the fiber optic patch cords will qualify for the partial duty exemption available under subheading 9802.00.80, HTSUS, when returned to the U.S.

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 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 value of the imported article, less the cost or value of the U.S. components, upon compliance with the documentary requirements of 19 CFR 10.24.

The applicable regulations for this partial duty exemption are set forth in 19 CFR 10.11 through 19 CFR 10.25. The provisions of 19 CFR 10.14(a) state, 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.

The assembly operations 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, and may be preceded, accompanied, or followed by operations incidental to the assembly. See 19 CFR 10.16(a). 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).

The components of the patch cords are in condition ready for assembly without further fabrication at the time of their exportation from the United States. In the instant case, you have described processing in China which involves assembly operations and operations incidental to the assembly process. The assembly operations involve glueing the connectors to the cable and welding springs to the connectors. Glueing and welding are identified as acceptable assembly operations in 19 CFR 10.16(a).

Cutting the cable to length is an operation incidental to assembly pursuant to 19 CFR 10.16(b)(6), which includes the following example of an operation which is incidental to the assembly process:

(6) cutting to length of wire, thread, tape, foil, and similar products exported in continuous length;...

Removing two inches of sheathing from the end of the cable, removing exposed kevlar fibers; and removing plastic fiber on the exposed optical fiber; inserting the cable into a cleaver which cuts off excess length; and beveling the exposed end of the fiber; are operations incidental to assembly pursuant to 19 CFR 10.16(b)(4), and (b)(5). This regulation states that examples of operations which are incidental to the assembly process include...

(4) trimming, filing, or cutting off of small amounts of excess materials;

(5) adjustments in the shape or form of a component to the extent required by the assembly being performed abroad;

Cleaning the fiber, cleaning and polishing the exposed ends, and cleaning the connectors, are operations incidental to assembly pursuant to 19 CFR 10.16(b)(1), which provides that cleaning is an acceptable operation incidental to the assembly.

Testing the connectors ultrasonically and visually inspecting the cables with a microscope and testing with a light source are operations incidental to assembly pursuant to 19 CFR 10.16(b)(7), which provides that final calibration and testing are acceptable operations incidental to the assembly.

When the above operations are performed a second time in China on 25 percent of the cables to make cables with a Volitrom terminal on one end and another type of terminal on the other end, the same analysis applies and the operations performed are either acceptable assembly operations or acceptable operations performed incidental to the assembly in accordance with 19 CFR 10.16(b), and will not preclude eligibility for a partial duty exemption under subheading 9802.00.80, HTSUS.
Consequently, the fiber optic patch cords may enter the U.S. under subheading 9802.00.80, HTSUS, with allowances in duty for the cost or value of any components which are determined to be of U.S. origin, provided the documentary requirements of 19 CFR 10.24 are satisfied.

You also asked if you would need to submit separate Declarations by the Assemblers as required in 19 CFR 10.24 for the two different Chinese assembly operations performed on 25 percent of the cords. Customs would require separate Declarations for each foreign assembler.

HOLDING:

Based upon the information presented, the fiber optic patch cords may enter the U.S. under subheading 9802.00.80, HTSUS, with allowances in duty for the cost or value of the components which are determined to be of U.S. origin, provided the documentary requirements of 19 CFR 10.24 are satisfied. The second assembly operation performed in China on some of the cords would not preclude eligibility for entry under subheading 9802.00.80, HTSUS, but two separate Declarations by the Assemblers would be required under 19 CFR 10.24.

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
Director
Commercial Rulings Division

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