OT:RR:CTF:VS H308579 CMR
Mr. Bruno Vaes
Cognegy
3348 Peachtree Road, NE
Tower Place Two, Suite 700
Atlanta, GA 30326
RE: Request for Reconsideration of New York Ruling Letter (NY) N308105, dated December 31, 2019; Applicability of partial duty exemption under subheading 9802.00.80
Dear Mr. Vaes:
This is in response to your request for reconsideration of New York Ruling Letter (NY) N308105, dated December 31, 2019, regarding the applicability of the partial duty exemption available under subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to electric power transmission overhead conductors produced in Belgium incorporating a core component produced in the United States. We have reviewed the information you submitted and agree that NY N308105 is incorrect. We are revoking NY N308105, effective the date of this letter. As NY N308105 has not been in effect for 60 days or more, the publication requirements of 19 U.S.C. § 1625 do not apply.
FACTS:
NY N308105 described the imported product and its production as follows:
The products to be imported are described as overhead electric power transmission cables. The overhead conductors are made of soft aluminum wires that are stranded around a composite component in one, two, three, or more layers. The core component is manufactured from a high-strength composite consisting of carbon and glass fibers embedded in a toughened thermoset epoxy resin matrix. The central carbon fiber core consists of tens of thousands of high-strength, high-modulus unidirectional carbon fibers that are surrounded by a protective layer of glass fibers. The central core is manufactured in the United States (U.S.), then exported to Belgium where Belgium origin aluminum wires are stranded around the U.S. origin core.
ISSUE:
Whether the imported overhead electric power transmissions cables, assembled in Belgium with U.S.-produced central core components, qualify for a partial duty exemption under subheading 9802.00.80, HTSUS.
LAW AND ANALYSIS:
Subheading 9802.00.80, HTSUS, 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, HTSUS, must be satisfied before an article may receive a duty allowance. An article entered under this tariff provision is subject to duty upon the full appraised value of the imported assembled article, less the cost or value of the U.S. components assembled therein, upon compliance with the documentation requirements of 19 C.F.R. § 10.24.
Section 10.14(a), Customs and Border Protection (CBP) Regulations (19 C.F.R. § 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 subject to operations incidental to the assembly either before, during, or after their assembly with other components. Materials undefined in final dimensions and shapes, which are cut into specific shapes or patterns abroad are not considered fabricated components.
Section 10.16(a), CBP 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, 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. See 19 C.F.R. § 10.16(a). 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 C.F.R. § 10.16(c).
In this case, the central core component, manufactured in the United States, is assembled with aluminum wires. The wires are stranded around a composite core in one, two, three or more layers. This is an acceptable assembly process. See Headquarters Ruling Letter (HQ) 561248, dated March 26, 1999, which found that the winding of wire around a broom core to further secure the broom fibers is an acceptable assembly operation for purposes of subheading 9802.00.80, HTSUS. HQ 561248 cited General Instruments Corporation v. United States, 61 CCPA 86, 499 F.2d 1318 (1974), rev’d, 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.
As the U.S.-produced central core component is exported in condition ready for assembly without further fabrication; does not lose its physical identity in such articles by change in form, shape or otherwise, and has not been advanced in value or improved in condition abroad except by being assembled with the aluminum wires to create the finished overhead electric power transmissions cables, the imported overhead electric power transmissions cables qualify for a partial duty exemption under subheading 9802.00.80, HTSUS, provided that the documentary requirements of 19 C.F.R. § 10.24 are met.
HOLDING:
Provided that all documentary requirements are met, the overhead electric power transmissions cables will be eligible for the partial duty exemption provided for in subheading 9802.00.80, HTSUS, upon importation. NY N308105 is revoked.
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Monika R. Brenner, Chief
Valuation & Special Programs Branch