CLA-2 CO:R:C:V 555674 KAC
Mr. Chris R. LeConte
A.N. Deringer, Inc.
15 River Street
Calais, Maine 04619-1894
RE: Applicability of duty exemption under subheading
9802.00.80, HTSUS, to polyester and polypropylene ropes
created abroad by twisting polyester yarn together and by
twisting yarn made out of polypropylene resin pellets
together.Further fabrication;assembly;10.14(a);10.16(a);
555221;555128;847184
Dear Mr. LeConte:
This is in response to your letter of April 20, 1990, on
behalf of Scotia Ropes, requesting a ruling on the applicability
of subheading 9802.00.80, Harmonized Tariff Schedule of the
United States (HTSUS), to polyester and polypropylene ropes
imported from Canada. Samples of the raw materials and finished
ropes were submitted for examination.
FACTS:
Scotia plans on sending polyester yarn and polypropylene
resin pellets to Canada for foreign operations. The polyester
yarn is used in the production of rope which ranges from 1/4
inch to 1 inch in diameter. The polyester rope is formed by
twisting three strands of polyester yarn on a rope laying
machine. The polypropylene rope is made from the polypropylene
resin pellets. In Canada, the pellets are melted and extruded
into strands of yarn. The polypropylene strands are then twisted
on a rope laying machine into rope.
The finished rope is then coiled, weighed and palletized for
importation into the U.S.
ISSUE:
Whether the polyester and polypropylene ropes will be
eligible for the duty exemption available under subheading
9802.00.80, HTSUS, 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 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 loose 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.
The polypropylene rope will not qualify for the duty
exemption available under subheading 9802.00.80, HTSUS. The rope
is made from the polypropylene resin pellets which are not
exported from the U.S. in condition ready for assembly without
further fabrication. The pellets must be extruded to manufacture
the yarn which is then used in producing the rope. Extruding the
polypropylene resin pellets into yarn clearly is a significant
process whose primary purpose is the fabrication of a component.
However, the polyester yarn which is exported to Canada and
twisted to form rope will qualify for the duty exemption under
this tariff provision. We have previously held that twisting
components together to create a rope constitutes an assembly
pursuant to 19 CFR 10.16(a). See, Headquarters Ruling Letter
(HRL) 555221 dated October 24, 1989, (twisting individual strands
and then three skeins of strands into a rope configuration
constitutes an acceptable assembly operation); and HRL 555128
dated January 9, 1989, (twisting of 3-ply nylon rope yarn
constituted an acceptable assembly of the three nylon strands).
The imported twisted polyester rope is classified under
HTSUS subheading 5607.50.2000, which provides for twine, cordage,
ropes and cable, ...., of other synthetic fibers, not braided or
plaited. The imported twisted polypropylene rope is classified
under HTSUS subheading 5607.49.2500, which provides for twine,
cordage, ropes and cables, of polyethylene or polypropylene,
other, other, not braided or plaited, other. The rate of duty
for both polyester and polypropylene rope is 15 percent ad
valorem plus 27.6 cents per kilogram. See, New York Ruling
Letter 847184. Goods classified under subheadings 5607.50.2000
and 5607.49.2500, HTSUS, which originate in the Territory of
Canada or the U.S., will be entitled to a 13.5 percent ad
valorem, plus 24.8 cents per kilogram rate of duty under the
United States-Canada Free Trade Agreement (FTA) upon compliance
with all applicable regulations. See, sections 10.301-10.311,
Customs Regulations (19 CFR 10.301-10.311).
U.S. Note 4(b), subchapter II, Chapter 98, HTSUS, provides
in regard to HTSUS subheading 9802.00.80 that if the imported
assembled article is subject to a specific or compound rate of
duty, the total duties shall be reduced in such proportion as
the cost or value of the U.S. components bears to the full value
of the imported article.
HOLDING:
From the information and samples submitted, it is our
opinion that the polyester rope will qualify for the duty
exemption available under subheading 9802.00.80, HTSUS.
Therefore, allowances in duty may be made for the cost or value
of the U.S. polyester yarn upon importation of the polyester
rope, provided the documentary requirements of 19 CFR 10.24 are
satisfied. However, the polypropylene rope will not qualify for
the duty exemption under this tariff provision, as the
polypropylene resin was not exported in a condition ready for
assembly without further fabrication. Polyester rope is
classified under HTSUS subheading 5607.50.2000 and polypropylene
rope is classified under HTSUS subheading 5607.49.2500.
Sincerely,
John Durant, Director
Commercial Rulings Division
cc: Asst. Area Dir., NIS
087039