CLA-2 CO:R:C:V 555533 KAC
Mr. John W. Cain
Cain Customs Brokers Incorporated
421 Texano
P.O. Box 150
Hidalgo, Texas 78557
RE: Applicability of duty exemption under HTSUS subheading
9802.00.80 to starter solenoid switches created by securely
joining components together, completely enclosing
components, winding wire, and bending.Assembly;incidental
operations;19 CFR 10.16(a),10.16(b)(7);General
Instrument;554920.
Dear Mr. Cain:
This is in response to your letters dated November 24, 1989,
February 12, and 16, and May 11, 1990, on behalf of Wells
Manufacturing Company, requesting a ruling on the applicability
of subheading 9802.00.80, Harmonized Tariff Schedule of the
United States (HTSUS), to starter solenoid switches imported from
Mexico.
FACTS:
Various U.S.-made parts will be shipped to Mexico for
assembly with certain foreign parts to create starter solenoid
switches. The switches provide electrical energy to starters on
internal combustion engines of automobiles. Of the 27 parts that
comprise the switch, 4 will be of foreign origin. They consist
of nuts and two different types of bolts of Taiwanese origin and
a magnet wire of Mexican origin. The foreign operations consist
of:
(1) force fitting, punching, screwing, riveting, pressing,
and snapping components together;
(2) enclosing certain components within other components;
(3) winding wire around a spool;
(4) stacking components together;
(5) cutting wire to length;
(6) testing of the switch for electrical charge; and
(7) stripping wire by machine; or
dipping wire in electrically conductive liquid solder
to melt the insulation and cover the wire with the
solder.
Upon completion of the assembly process the switches will be
imported into the U.S.
ISSUE:
Whether the starter solenoid switches will be eligible for
the partial duty exemption under HTSUS subheading 9802.00.80
when imported into the U.S.
LAW AND ANALYSIS:
HTSUS subheading 9802.00.80 provides a partial duty
exemption for:
[a]rticles 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, lubrication, and painting.
All three requirements of HTSUS subheading 9802.00.80 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 article,
less the cost or value of the U.S. components assembled therein,
upon compliance with the documentary requirements of section
10.24, Customs Regulations (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 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 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 operations which result in securely joining components
together by force fitting, punching, screwing, riveting,
pressing, and snapping are considered acceptable assembly
operations pursuant to 19 CFR 10.16(a). Completely and securely
enclosing certain components within other components is also
considered an acceptable assembly operation. See Headquarters
Ruling Letter 554920 dated January 3, 1989 (completely enclosing
a metal weight in the bottom hem of vertical blinds is an
acceptable assembly process). Moreover, winding wire around a
spool is considered an acceptable assembly operation within the
meaning of this tariff provision. See, General Instrument
Corporation v. United States, 61 CCPA 86, C.A.D. 1128, 499 F.2d
1318 (1974), rev'g, 70 Cust.Ct. 151, C.D. 4421, 359 F.Supp. 1390
(1973) and 19 CFR 10.16(a). The staking operation involves
bending or deforming a portion of a bracket, by means of a press,
over a sub-assembled housing unit for the sole purpose of
attaching the bracket to the unit. We believe that this is an
acceptable assembly operation as it is analagous to a force
fitting operation. The testing operation is also considered an
operation incidental to the assembly process pursuant to 19 CFR
10.16(b)(7).
However, no allowance may be made for the U.S.-origin solder
into which the wire of Mexican origin is dipped. The solder is
exported from the U.S. to Mexico in the form of a solid bar which
is subsequently heated in Mexico to a molten state for
application to the wire leads. Therefore, the solder clearly is
not exported from the U.S. in condition ready for assembly as
required by clause (a) of HTSUS subheading 9802.00.80.
HOLDING:
On the basis of the information submitted, it is our opinion
that the starter solenoid switches to be assembled in Mexico will
be entitled to the partial duty exemption under HTSUS subheading
9802.00.80. Therefore, allowances in duty may be made under this
tariff provision for the cost or value of the U.S. components,
excluding the solder, upon compliance with the documentation
requirements of 19 CFR 10.24. No allowance in duty may be made
for the components of foreign origin--nuts and two different
types of bolts of Taiwanese origin and the magnet wire of Mexican
origin.
Sincerely,
John Durant, Director
Commercial Rulings Division