CLA-2 CO:R:C:S 557493 MLR
Mr. Robert A. Allen
Ear Sense
106 Finnell Drive
Weymouth, MA 02188
RE: Applicability of partial duty exemption under HTSUS
subheading 9802.00.80 to imitation costume earrings;
pushing; slipping; snapping; gluing; welding
Dear Mr. Allen:
This is in reference to your letter of July 22, 1993,
requesting a ruling regarding the applicability of subheading
9802.00.80, Harmonized Tariff Schedule of the United States
(HTSUS), to imitation costume earrings. Samples of all
components as they are sent abroad for assembly and after
assembly are submitted with your request.
FACTS:
Ear Sense plans to ship U.S.-origin earring components to
Mexico where they will be made into imitation costume earrings.
The processes will consist of snapping a glass stone into a steel
plated setting, pushing a plastic ball into a metal pin, welding
or gluing a metal ornament onto a metal post, and pushing a
rubber sleeve onto an earring post. You also request the
classification of the earring components exported from the U.S.
to Mexico.
ISSUES:
I. Whether the imitation costume earrings will qualify for the
partial duty exemption under HTSUS subheading 9802.00.80,
when imported into the United States.
II. What is the proper classification of the imitation costume
earrings under the HTSUS?
LAW AND ANALYSIS:
I. Subheading 9802.00.80, HTSUS
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 (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,
lamination, 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 CFR 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 CFR
10.16(c).
The operations of snapping a glass stone into a steel plated
setting, pushing a plastic ball into a metal pin, welding or
gluing a metal ornament onto a metal post, and pushing a rubber
sleeve onto an earring post are considered acceptable assembly
operations pursuant to 19 CFR 10.16(a) for purposes of subheading
9802.00.80, HTSUS.
II. Classification
The classification of merchandise under the HTSUS is
governed by the General Rules of Interpretation (GRI's). GRI 1,
HTSUS, states in part that "for legal purposes, classification
shall be determined according to the terms of the headings and
any relative section or chapter notes...."
GRI 2(a), HTSUS, states:
Any reference in a heading to an article shall be taken to
include a reference to that article incomplete or
unfinished, provided that, as entered, the incomplete or
unfinished article has the essential character of the
complete or finished article....
Heading 7117, HTSUS, provides for "Imitation jewelry...."
The Explanatory Notes (ENs) to the Harmonized Commodity
Description and Coding System (HCDCS) (pg. 964-965) state that
this "...heading covers unfinished or incomplete articles of
imitation jewellery (ear-rings, bracelets, necklaces, etc.), such
as:
(a) Semi-finished split rings, consisting of anodised
aluminum wire, usually twisted or surface worked,
whether or not fitted with a crude clasp, sometimes
used as ear-rings without further working;
(b) Ornamental motifs of base metal, whether or not
polished, assembled by small links into strips or
indefinite length."
Upon completion of the operations in Mexico, finished
earrings of base metal and earring settings with attached rubber
sleeves will be imported into the U.S. We are of the opinion
that the earring settings with attached rubber sleeves have the
essential character of the completed earring and, therefore,
pursuant to GRI 2(a), HTSUS, are classified as the completed
article. Based on the information presented, the finished
earrings of base metal and earring settings with attached rubber
sleeves are classified under subheading 7117.19.50, HTSUS, which
provides for "Imitation Jewelry...Of base metal, whether or not
plated with precious metal...Other...Other...."
The U.S. Customs Service only issues binding rulings for the
eight digit tariff classification of articles imported into the
U.S. Customs normally does not provide the Harmonized Tariff
Schedule provisions for exported articles. However, in our
opinion the following represents the international six digit
Harmonized Tariff Schedule provisions for those articles exported
to Mexico for assembly.
1. Pursuant to GRI 2(a), HTS, the plastic balls have the
essential character of imitation jewelry and,
therefore, are classified under subheading 7117.90,
HTS, which provides for other imitation jewelry. See,
Headquarters Ruling Letter (HRL) 952104 dated July 13,
1993.
2. Pursuant to GRI 2(a), HTS, the earring settings of base
metal and metal earring ornamentations have the
essential character of finished earrings and,
therefore, are classified under subheading 7117.19,
HTS, which provides for other imitation jewelry of base
metal, whether or not plated with precious metal.
3. The glass gemstones are classified under subheading
7018.10, HTS, which provides for "...Glass beads,
imitation pearls, imitation precious or semiprecious
stones and similar glass smallwares...."
4. The rubber sleeves are classified under subheading
4016.99, HTS, which provides for other articles of
vulcanized rubber other than hard rubber.
5. The metal steel posts are classified under subheading
7326.90, HTS, which provides for other articles of iron
or steel.
HOLDING:
On the basis of the information and samples submitted, we
conclude that the imitation costume earrings do not lose their
physical identity in the assembly operation, and are not advanced
in value or improved in condition except by assembly operations
and operations incidental thereto. Therefore, allowances in duty
may be made under subheading 9802.00.80, HTSUS, for the cost or
value of the U.S. fabricated components upon return of the
imitation costume earrings to the U.S., provided the documentary
requirements of 19 CFR 10.24 are satisfied.
Furthermore, upon importation into the U.S., the finished
earrings and earring settings with attached plastic sleeves are
classified under subheading 7117.19.50, HTSUS, which provides for
other imitation jewelry of base metal, whether or not plated with
precious metal. This tariff provision is dutiable at the Column
1 rate of 11 percent ad valorem.
Sincerely,
John Durant, Director