CLA-2 RR:CR:SM 561248 RSD
Mr. Patrick McIntosh
F.W. Myers & Co., Inc.
34 Spur Drive
El Paso, Texas 79906
RE: Applicability of Subheading 9802.00.80, HTSUS, to corn or straw broom heads imported from Mexico; winding of wire; 19 CFR 10.16
Dear Mr. McIntosh:
This is in reference to your letter dated December 16, 1998, on behalf of Quickie Manufacturing Corporation (Quickie), requesting a ruling that broom heads made of straw or corn fibers are entitled to the partial duty exemption under subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), upon return from Mexico. You have submitted a sample broom head for our consideration.
FACTS:
You state that Quickie imports brooms made wholly or in part of broom corn or grass through the ports of Laredo, Texas, and El Paso, Texas. A Mexican company affiliated with Quickie, Quickie de Mexico, S.A. de C.V., makes the finished broom heads. According to your letter, the broom heads will be classified under subheading 9603.10, HTSUS.
You describe the process to assemble the broom heads in Mexico as follows:
1) The center fibers of the broom head (broom corn or grass) are nailed to a plastic connector using 6-8 nails and a metal band.
2) The outside fibers are then watered to make them flexible enough to be wound to the broom.
3) The outside fibers (broom corn) are then wound to the previously nailed broom
using a given amount of wire.
4) The broom is then cleaned in order to remove seeds from the broom corn.
5) Next the broom is placed on the ground and dried by exposure to the sun.
6) Fibers are stitched to the broom using 3-6 rows of poly-twine to form the broom shape.
7) Excess poly-twine is trimmed.
8) The broom is trimmed to length. It is then bagged and packed according to customer specifications.
The U.S. components in the broom heads are the nails and the wire. U.S. packing in the form of polybags and cardboard are also used. The nails are used in their existing condition for the assembly. The wire of continuous length is then cut to length and wound around the previously nailed broom. The remaining components of the finished broom heads are products of Mexico.
ISSUE:
Whether the U.S. materials exported to Mexico for processing into the finished broom heads are eligible for the duty exemption provided for in HTSUS subheading 9802.00.80.
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 value of the assembled article, less the cost or value of such U.S. components, 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)), provides, 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 subheading 9802.00.80, HTSUS, to that component. See, 19 CFR §10.16(c) .
In this case, there are two U.S. components which are used to make the broom heads in Mexico, the nails and wire. The nails are used to attach the center fibers of the broom head to a plastic connector. Nailing the corn or straw fibers to a plastic piece, is analogous to the types of operations described in 19 CFR 10.16(a), because its results in a joinder of two or more separate components as required by HTSUS subheading 9802.00.80. Therefore, the nailing is an acceptable assembly operation within the meaning of subheading 9802.00.80, HTSUS. Likewise, an operation involving the other U.S. component, the winding of wire around the broom core to further secure the broom fibers, is also an acceptable assembly operation. See General Instrument Corporation v. United States, 61 CCPA 86, 499 F.2d 1318 (1974) rev’g, 70 Cust Ct. 151, C.D. 4421, 359 F.Supp. 1390 (1973), which held that winding a wire around a core is considered an acceptable assembly operation.
An additional operation performed in producing the broom heads, is the cutting to length of the U.S. component wire. 19 CFR §10.16(b)(6), specifically provides the following example of an operation which is incidental to the assembly process:
(6) cutting to length of wire, thread, tape, foil, and similar products exported in continuous length;...
Accordingly, we find that the cutting of the wire to length is an acceptable operation incidental to the assembly process. Therefore, a duty allowance under subheading 9802.00.80, HTSUS, may be allowed for the cost or value of the U.S. origin materials, (the nails and wire) used in the assembly of the finished broom heads when the articles are returned to the U.S., upon compliance with the documentation requirements of 19 CFR §10.24.
The U.S. origin packing materials would be entitled to duty free treatment pursuant to subheading 9801.00.10, HTSUS, assuming compliance with the requirements of that provision and of 19 CFR 10.1.
HOLDING:
On the basis of the information and the sample submitted, we conclude that the cost or value of the U.S. origin materials used to make broom heads abroad will be eligible for a duty allowance under HTSUS subheading 9802.00.80, when they are returned to the United States as part of the broom heads, upon compliance with the documentary requirements set forth in 19 CFR §10.24.
A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.
Sincerely,
John Durant, Director
Commercial Rulings Division