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NY F83842




March 17, 2000

CLA-2-98:RR:NC:2:230 F83842

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.8066

Mr. Bernard D. Arbit
Arbit Trading Corp.
One Warburton Avenue
Hastings-on-Hudson, NY 10706

RE: The applicability of partial duty exemption under subheading 9802.00.80, HTSUS, to birch plywood surface covered with plastic sheets of U.S. origin from Finland

Dear Mr. Arbit:

In your letter dated February 25, 2000 you requested a ruling on the applicability of a duty allowance for components of United States origin used in the manufacture of imported plywood from Finland.

The imported product is birch plywood surface covered with plastic. A ruling was previously issued on the subject plywood in ruling NY F82107 dated February 17, 2000. The surface covered birch plywood is classifiable in subheading 4412.14.5500, Harmonized Tariff Schedule of the United States Annotated (HTSUSA). The rate of duty is 8 percent ad valorem.

You state that your company purchases the plastic material and the bonding material used in the manufacture of the imported plywood. The plastic material and the bonding material are products of the United States. The plastic material is manufactured by the Rayner Company in Chicago and is tradenamed Rayform DuraCore and Rayform Duraply. The plastic is shipped in the form of sheets in the same size as the plywood. Before exportation one side of each plastic sheet is roughly sanded.

The plastic sheets and the bonding material are shipped freight and insurance prepaid to Finland. The manufacturer in Finland supplies the birch plywood and laminates the plastic sheets onto one or both surfaces of the plywood.

The assembly process is described in detail as follows: The bonding material is spread on the roughened side of the plastic sheet. The plastic and plywood are pressed together. The edges of the laminated product are trimmed and evened. The surfaces are lightly sanded for cleaning purposes.

A partial duty exemption is applicable for certain components of United States origin assembled in another country. Subheading 9802.00.80, HTSUS, provides 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 except by being assembled or 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. The component must be in condition ready for assembly without further fabrication at the time of its exportation from the United States to qualify for the exemption. Operations incidental to the assembly and of a minor nature are not considered further fabrication operations.

The plastic sheets meet the requirements of subheading 9802.00.80, HTSUS. They are in sheet form, sanded on one side and in condition ready for assembly prior to being exported from the United States. They do not lose their physical identity after being assembled. They are not advanced in value except by operations incidental to the assembly process such as trimming and lightly sanding. A partial duty exemption will apply for the plastic sheets.

The bonding material, however, does not meet the requirements of subheading 9802.00.80, HTSUS. The bonding material is not a fabricated component. It will be used in the assembly process and will lose its identity in the process. Therefore, a partial duty exemption will not apply for the bonding material.

Subheading 9802.00.80, HTSUS, provides for a duty upon the full value of the imported article, less the cost or value of the fabricated components of the United States that meet the requirements of 9802.00.80.

If the U.S. materials are provided free or at a reduced cost to the foreign assembler, the materials constitute an assist as defined in Part 152 of the Customs Regulations (19 C.F.R. 152.102). Under Part 152 of the Customs Regulations, to the extent that the value of the assist is not otherwise included in the price actually paid or payable for the merchandise, the value of the assist must be added to the price paid or payable for the imported merchandise. The value of the assist includes any transportation costs to the place of production or assembly.

Based on the information submitted, the subject plywood may be classified with a partial duty exemption. An allowance in duty is applicable under subheading 9802.00.8066, HTSUSA, for the fabricated plastic sheets. From the full value of the imported plastic covered birch plywood, a deduction may be made for the cost or value of the plastic sheets. (If not included, the cost or value of the plastic sheets and the bonding material must first be added to the value of the plywood.) The rate of duty applied is the rate applicable for the imported product (classified in subheading 4412.14.5500) which is 8 percent ad valorem.

Certain documents (a Declaration by the Assembler and an Endorsement by the Importer) must be filed at the time of entry when claiming an allowance under subheading 9802.00.80, HTSUS, as required by the Customs Regulations (19 C.F.R. 10.24).

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 Paul Garretto at 212-637-7009.

Sincerely,

Robert B. Swierupski

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