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NY K84539




April 1, 2004

CLA-2-56:RR:NC:N3:351 K84539

CATEGORY: CLASSIFICATION

TARIFF NO.: 5606.00.0010, 9802.00.80

Mr. Thomas J. Kovarcik
Counselor at Law
590 Madison Ave., 21st Fl.
New York, NY 10022

RE: The tariff classification of gimped spandex yarn from Honduras.

Dear Mr. Kovarcik:

In your letter dated March 23, 2004, you requested a ruling on behalf of Elastic Corporation of America on tariff classification.

You state that polyester yarn and spandex monofilament yarn, both wholly formed in the United States, are shipped to Honduras where they are gimped, that is, the polyester yarn is wrapped spirally around the spandex.

The applicable subheading for the gimped yarn will be 5606.00.0010, Harmonized Tariff Schedule of the United States (HTS), which provides for gimped yarn . . . containing elastomeric filaments. The general rate of duty will be eight percent ad valorem.

You also state your belief that the gimped yarn is entitled to a duty reduction under subheading 9802.00.80, HTS, which 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, HTS, 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 such U.S. components assembled therein, upon compliance with the documentary requirements of Section 10.24, Customs Regulations (19 C.F.R. 10.24).

Section 10.14 (a) Customs Regulations [19 C.F.R. 10.14 (a)] states 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. Section 10.16(a) Customs Regulations (19 C.F.R. 10.16 (a)] provides that the assembly operation performed abroad may consist of any method used to join or fit together solid components. Operations incidental to the assembly process are not considered further fabrication operations if they are of a minor nature.

Gimping is considered an allowable assembly process. Therefore, the gimped spandex yarn may be entered under subheading 9802.00.80, HTS, with allowances in duty for the cost or value of the U.S. components incorporated therein, upon compliance with the documentary requirements of 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.).

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 Mitchel Bayer at 646-733-3102.

Sincerely,

Robert B. Swierupski
Director,

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