CLA 02 RR:TC:SM 559961 KKV
Mr. Jack Alsup
Alsup & Alsup, Inc.
P.O. Box 1251
Del Rio, TX 78841
RE: Applicability of subheading 9802.00.90, HTSUS, to
motor vehicle safety seat belts; Special Regime
Program; findings; sewing; cutting to length;
removing excess material; printing perforated
labels; Article 509
Dear Mr. Alsup:
This is in response to your letter dated June 17, 1996
(and subsequent submissions dated July 12, 1996, July 23,
1996, February 7, 1997 and February 17, 1997) on behalf of
Takata Seat Belts, Inc, which requests a ruling concerning
the applicability of subheading 9802.00.90, Harmonized
Tariff Schedule of the United States (HTSUS), to certain
motor vehicle safety seat belts imported from Mexico.
Although your letter indicates that two samples (part #
10277258 and part # 22659015) are enclosed for our
examination, no samples were received..
FACTS:
We are informed that Takata Seat Belts, Inc.
(hereinafter, "Takata") imports motor vehicle safety seat
belts, manufactured by their Mexican subsidiary, into the
U.S. under subheading 8708.21.0000, HTSUS. Takata uses
various components comprised of different materials in
assembling the seat belts in Mexico. These components
include the following:
1) Fabric components or "webbing" of nylon used for
the strap. The webbing, wholly formed (woven)
and cut in the U.S. (but not to length), measures
47 millimeters wide and 274 meters in length and
is exported to Mexico on
rolls or spools. In the assembly process, this
material will be unspooled and cut to length.
2) Other fabric and non-fabric components of U.S.
origin used in the assembly process, asserted to
be "findings and trimmings," such as an
identification label, child warning label, thread
and a plastic stop button. The identification
labels are shipped to Mexico in perforated sheets
and printed in Mexico, then separated and sewn to
the belt webbing. We are informed that the total
cost of these items does not exceed 25% of the
total cost of the components and findings.
3) Other non-textile components such as plastic and
metal. These non-fabric components include
frames, supports, arms, weights, latches,
bearings, screws, rings, cams, springs, pin-latches, bearing shafts, ratchets, ratchet guards,
cylinders, shafts, web guide covers, escutcheons,
tip inserts, tip covers, buttons, anchor plates,
layer covers, bases, tie bars, straps, guides,
shafts, lock gears, flywheels, pawls, retainers,
weights, actuators, sensors, housings, pads,
carton bottoms and pallets. These components may
be both of U.S. and foreign manufacture.
We are informed that the sequential assembly operation
in Mexico for part # 10277258 (F-Body Front Seat Retractor)
is as follows:
Assemble ring to latch and bearings.
Screw cam to latch. Assemble latch and
pin to frame and place Julian date label
on frame. Assemble support, arm and
weight. Spin, stake support and bushing.
Assemble ratchet. Press pad to ratchet.
Cut webbing to length. Sew triple zig-zag pattern in webbing to form a loop for
the shaft. Print I.D. label. Sew I.D.
label. Sew warning label to webbing.
Check webbing 100%. Ratchet, webbing,
shaft and bushing. Press shaft. Grease
spring. Wind spring. Screw spring
housing. Check air gap. Checker.
Assemble webbing guide to cover. Lace
and place cover. Press cover, check and
mark. 0.6 G-Tester. 45 degree test and
assemble upper cover. Assemble free fall
tip. Lace escutcheon and free fall tip.
Assemble protector to anchor. Lace
anchor and sew X box pattern. Place stop
button. Pull sleeve and label. Sew bar
tack on sleeve. 100% final check. Make
box. Pack.
We are informed that the sequential assembly operation
in Mexico for part # 22659015 (J-Body Front Seat Retractor)
is as follows:
Press tie bar to frame. Press metal
strap to frame. Check strap. Assemble
sensor (weight to case, actuator and
cap). Wind spring to frame and sensor.
Assemble pawl A/spring, lock gear and
pin. Assemble pawl B and screw.
Assemble hook spring and flywheel to
shaft. Assemble shaft subassembly, guide
and cover. Press pins on cover to secure
sensor and shaft. Cut webbing to length.
Place heat label on webbing. Thread
webbing through shaft, place pin and sew
pin pattern in webbing. 0.6 G and 45
degree test. Assemble free fall tip.
Thread webbing through tip, guide and
anchor. Sew X box pattern in webbing.
Press stop button in webbing. Pull boot
over anchor. Tack stitch boot to
webbing. Final inspection. Ink jet
identification. Pack.
ISSUE:
Whether the motor vehicle safety seat belts will be
eligible for duty-free treatment under subheading
9802.00.90, HTSUS, upon importation into the U.S.
LAW AND ANALYSIS:
Annex 300-B of the North American Free Trade Agreement
("NAFTA") is applicable to textile and apparel goods.
Appendix 2.4 of Annex 300-B provides that:
On January 1, 1994, the U.S. shall
eliminate customs duties on textiles and
apparel goods that are assembled in
Mexico from fabrics wholly formed and cut
in the United States and exported from
and reimported into the United States
under:
(a) U.S. tariff item 9802.00.80.10; or
(b) Chapter 61, 62, or 63 if, after such
assembly, those goods that would have
qualified for treatment under
9802.00.80.10 have been subject to
bleaching, garment dyeing, stone-washing,
acid-washing or perma-pressing.
Thereafter, the U.S. shall not adopt or
maintain any customs duty on textile or
apparel goods of Mexico that satisfy the
requirements of subparagraph (a) or (b)
or the requirements of any successor
provision to U.S. tariff item
9802.00.80.10.
Consequently, subheading 9802.00.90, HTSUS, was created
to provide for the duty-free entry of:
Textile and apparel goods, assembled in
Mexico in which all fabric components
were wholly formed and cut in the United
States, provided that such fabric
components, in whole or in part, (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; provided the goods classifiable
in chapters 61, 62, or 63 may have been
subject to bleaching, garment dyeing,
stone-washing, acid-washing or
perma-pressing after assembly as provided
for herein.
The initial question we must address is whether the
subject motor vehicle safety seat belt is considered a
"textile and apparel good" under subheading 9802.00.90,
HTSUS. Your letter indicates that the article at issue is
classified under subheading 8708.21.00, HTSUS, which
provides for "Parts and accessories of the motor vehicles of
headings 8701 to 8705: other parts and accessories of bodies
(including cabs): safety seat belts.
Effective July 1, 1996, the country of origin for
textile articles is determined according to the origin rules
set forth in 19 CFR 102.2. Section 102.21(b)(5) provides
that a "textile or apparel product" is any good classified
in Chapters 50 through 63, HTSUS, and any good classifiable
under certain enumerated HTSUS headings or subheadings,
including subheading 8708.21. Thus, under the facts
presented, the subject safety belt, which is classifiable
under subheading 8708.21.0000 qualifies as a "textile and
apparel good" for purposes of subheading 9802.00.90, HTSUS.
The enactment of subheading 9802.00.90, HTSUS, was
intended to extend duty-free and quota-free status to all
goods assembled in Mexico, which previously were eligible
for entry under the Special Regime Program administered
under subheading
9802.00.8010, HTSUS. As a result, it is Customs view that
all of the policy directives
implementing this program should be considered applicable
for the administration of subheading 9802.00.90, HTSUS.
One such policy under the Special Regime Program included
the allowance of "findings, trimmings, and certain elastic
strips of foreign origin" to be incorporated into the
assembled good "provided they do not exceed 25 percent of
the cost of the components of the assembled product."
Examples of findings and trimmings are sewing thread, hooks
and eyes, snaps, buttons, "bow buds," lace trim, zippers,
including zipper tapes, and labels. See 53 Fed. Reg.
15726 (May 3, 1988).
With regard to the subject safety belts, you assert
that the identification label, the child warning label,
thread and a plastic stop button qualify as "findings" whose
cost does not exceed 25% of the cost of the components and
findings. However, inasmuch as you indicate that these
articles are of U.S. origin, it is unnecessary to determine
whether they qualify as findings because the allowance for
findings and trimmings relates only to foreign items.
Because subheading 9802.00.90, HTSUS, was intended as a
successor provision to subheading 9802.00.80, HTSUS, with
respect to certain textile and apparel goods assembled in
Mexico, the regulations under subheading 9802.00.80, HTSUS,
may be instructive in determining whether an assembly
process would render an article eligible for the beneficial
duty treatment accorded by subheading 9802.00.90, HTSUS.
(In this regard, however, as distinguished from subheading
9802.00.80, HTSUS, it is noted that
subheading 9802.00.90 requires only that all fabric
components be formed and cut in the U.S., and that only such
components, in whole or in part, need be exported from the
U.S. in condition ready for assembly without further
fabrication.)
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 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 HTSUS subheading 9802.00.80 to that
component. See, 19 CFR 10.16(c). Examples of operations
incidental to the assembly process include trimming, filing,
or cutting off of small amounts of excess materials, and
cutting to length of wire, thread, tape, foil and similar
products exported in similar length (19 CFR 10.16(b)(4) and
(b)(6).)
In the instant case, the sewing and gluing operations
used to join the fabric components, or to join fabric
components to other items, are acceptable assembly
operations. Cutting various fabric components to length
and cutting off excess thread are operations incidental to
the assembly process, and therefore will not disqualify the
article from eligibility under subheading 9802.00.90, HTSUS.
See Headquarters Letter Ruling (HRL) 557875, dated May 4,
1995
Moreover, with regard to the perforated identification
labels exported to Mexico, Custom has previously held that
the printing and affixing of labels will not disqualify an
article for duty-free treatment under subheading 9802.00.80.
In C.S.D. 79-314, 13 Cust. Bull. 1468 (1979), Customs
determined that printing which serves the purpose of "origin
markings, trademark, polarity, color coding, part number
identification, or instruction for use," would not preclude
tariff treatment under item 807.00, TSUS (the predecessor of
subheading 9802.00.80, HTSUS). See also, HRL 557685, dated
March 28, 1995.
Accordingly, the motor vehicle safety seat belts
assembled in Mexico may be entered free of duty, provided
all fabric components are woven or milled in the U.S., the
fabric is cut in the U.S. (except for cutting to length),
and any foreign findings, trimmings, and elastic strips do
not exceed 25 percent of the cost of all components.
HOLDING:
1) Based on the information provided, a motor vehicle
safety seat belt classifiable under subheading 8708.21.0000,
HTSUS, qualifies as a "textile and apparel good" pursuant to
19 CFR 102.21(b)(5) for purposes of determining its
eligibility under subheading 9802.00.90, HTSUS.
2) Because the operations performed in Mexico in
connection with the fabric components are acceptable
assembly operations or operations incidental to such
assembly, the imported motor vehicle safety belts qualify
for duty-free treatment under subheading 9802.00.90, HTSUS,
provided all such components are cut and formed in the U.S.,
and the cost of all foreign findings and trimmings do not
exceed 25 percent of the cost of the components of the
assembled article.
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
Tariff Classification
Appeals Division