CLA- 2 CO:R:C:S 556177 DSN
Mr. Ernesto Bustamante
William F. Joffroy Inc.
P.O. 698
Nogales, Arizona 85628-0698
RE: Textile tarpaulins; assembly; cutting; sewing; L'Eggs; 19
CFR 10.14(a); 19 CFR 10.16(a)(b); 555671
Dear Mr. Bustamante:
This is in response to your letter of August 7, 1991, to the
Area Director, New York Seaport, on behalf of M & M
Manufacturing, requesting a ruling on the applicability of
subheading 9802.00.80, Harmonized Tariff Schedule of the United
States (HTSUS), to textile tarpaulins imported from Mexico. Your
request was forwarded to this office for a reply.
FACTS:
According to your submissions, tarpaulins are constructed
from woven polyethylene monofilament fabric. Your client intends
to send rolls of polyethylene fabric, textile reinforcement
straps, nylon thread, grommets and packing materials all of U.S.
origin to Mexico for assembly. In Mexico, the fabric and
reinforcement straps are cut to length. The tarpaulins are
hemmed with the textile strap sewn on for reinforcement. The
grommets are attached with the use of a hammer or press machine
two feet apart along the hem before the tarpaulins are packed for
shipment to the U.S.
ISSUE:
Whether the tarpaulins qualify for the partial duty
exemption available under subheading 9802.00.80, HTSUS, when
imported into the U.S.
LAW AND ANALYSIS:
Subheading 9802.00.80, HTSUS, 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, 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 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 919 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 whether
performed before, during, or after assembly, do not constitute
further fabrication, and shall not preclude the application of
the exemption. An example of an operation which is considered
incidental to the assembly process is the cutting to length of
wire, thread, tape, foil, and similar products exported in
continuous length. See, section 10.16(b)(6), Customs Regulations
(19 CFR 10.16(b)(6)).
In the instant case, the cutting to length of the fabric and
strapping constitute an operation incidental to the assembly
process pursuant to the above-cited regulation. Hemming the
tarpaulins and sewing the textile strap for reinforcement are
considered acceptable assembly operations. See, 19 CFR 10.16(a)
and L'Eggs Products v. United States, Slip Op. 89-5, 13 CIT ___
704 F.Supp. 1127 (CIT 1989), which held that sewing together the
end of a pantyhose tube is considered an acceptable assembly
operation as the thread serves as a joining agent by joining the
tube to itself. Moreover, the operation whereby the grommets are
attached to the tarpaulins is also considered an acceptable
assembly operation pursuant to 19 CFR 10.16(a) and Headquarters
Ruling Letter (HRL) 555671 of March 15, 1991.
HOLDING:
On the basis of the information presented, it is our opinion
that the operations performed abroad to create textile tarpaulins
are considered proper assembly operations or operations
incidental to the assembly process. Therefore, the tarpaulins
may enter under subheading 9802.00.80, HTSUS, with allowances in
duty for the cost or value of the U.S. components incorporated
therein, upon compliance with the documentary requirements of 19
CFR 10.24.
Sincerely,
John Durant, Director
Commercial Rulings Division