CLA-2 RR:TC:SM 559789 DEC
Mr. Scott Weisman
Jolan/Madewell Corporation
945 S.E. 14th Street
Hialeah, Florida 33010
RE: Products of the United States; subheading 9802.00.80, HTSUS;
Assembly;
Zipper; HRL 556808; 19 CFR 10.12(e); Torrington Co. v.
United States,
764 F.2d 1563, 3 CAFC 158 (Fed. Cir. 1985); 19 CFR 10.24
Dear Mr. Weisman:
This is in response to your letter of April 11, 1996,
requesting a ruling with respect to whether zippers will qualify
as a product of the United States for purposes of subheading
9802.00.80, Harmonized Tariff Schedule of the United States
(HTSUS).
FACTS:
You question in your submission whether continuous zipper
chain and sliders from an unspecified foreign country that are
imported into the United States and then made into individual
zippers are substantially transformed into a product of the
United States. We received your samples of the various stages of
production of the zippers. To summarize, zipper chains in 200
yard rolls are gapped and bottom stopped to length. Next a
slider is mounted on the gapped material and the zipper is then
top stopped. Finally, the zippers are then sheared into
individual units. You further question whether the businesses to
which you will sell the finished zippers may receive a partial
duty allowance under subheading 9802.00.80, HTSUS, if the zippers
are used in the assembly of an article abroad.
ISSUE:
Whether foreign-made zipper components made into completed
zippers in the United States are substantially transformed into
"products of the United States" for purposes of subheading
9802.00.80, HTSUS.
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 (19 CFR 10.24).
For purposes of subheading 9802.00.80, HTSUS, a "product of
the United States" is an article manufactured within the Customs
territory of the U.S. and may consist wholly of U.S. components
or materials, of U.S. and foreign components or materials, or
wholly of foreign components or materials. If the article
consists wholly or partially of foreign components or materials,
the manufacturing process must be such that the foreign
components or materials have been substantially transformed into
a new and different article, or have been merged into a new and
different article. Section 10.12(e), Customs Regulations (19 CFR
10.12(e)). A substantial transformation occurs "when an article
emerges from a manufacturing process with a new name, character,
or use which differs from that of the original material subjected
to the process." Torrington Co. v. United States, 764 F.2d 1563,
1568, 3 CAFC 158 (Fed. Cir. 1985).
In Headquarters Ruling Letter (HRL) 556808, dated December
12, 1992, Customs addressed the issue of whether foreign-made
zipper components processed into completed zippers in the U.S.
were substantially transformed into products of the U.S. for
purposes of subheading 9802.00.80, HTSUS. In that case, Customs
concluded that the assembly of zipper components into a finished
zipper was a
relatively minor operation which left the identity of the
components intact. The essential character of the zipper (i.e.,
chain and slider) was not substantially changed, nor did it lose
its separate identity as a result of the assembly operation in
the U.S. In addition, the foreign components were already
dedicated to use as a zipper before being assembled.
In the instant case, we find that the conclusions in HRL
556808 are applicable to the facts at issue. The assembly of the
zipper components into a finished zipper is a relatively minor
operation or combining process which leaves the identity of the
components intact. Moreover, the essential character of the
zipper (i.e., chain and slider) is not substantially changed, nor
does it lose its separate identity as a result of the assembly
operation in the U.S. Furthermore, we find that the foreign
components are already dedicated to use as a zipper prior to
their being assembled together. Accordingly, the zipper will not
be considered a "product of the United States" and therefore will
not be entitled to a duty allowance under subheading 9802.00.80,
HTSUS, when returned to the U.S. as part of an article assembled
abroad.
HOLDING:
Foreign-made zipper components assembled into completed
zippers in the U.S. are not considered "products of the United
States" for purposes of subheading 9802.00.80, HTSUS, as the
components are not substantially transformed into a new and
different article of commerce as a result of that processing.
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 Customs officer handling the
transaction.
Sincerely,
John Durant, Director
Tariff Classification Appeals
Division