CLA-2 CO:R:C:S W555799 LS
Mr. Enoch Fillinger, Area Manager Magnetek Hesgon
3525 International Blvd.
Brownsville, Texas 78521
RE: Applicability of subheading 9802.00.80, HTSUS, to plied fiberglass yarn and plied fiberglass/polyester yarn formed by plying or twisting two uptwisted yarns together; respooling; assembly; 555594; 555128; 554531
Dear Mr. Fillinger:
This is in response to a letter dated August 21, 1991, from Mr. Richard Nagel of your company, which amended your letter of September 10, 1990, requesting a ruling concerning the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to plied fiberglass yarns and plied polyester/fiberglass yarns. Samples of both finished products and the component yarns were submitted for our examination.
FACTS:
In your original ruling request of September 10, 1990, you stated that you planned to export two types of U.S. manufactured continuous yarn to Mexico where two types of twisting operations would occur, resulting in plied fiberglass yarn and plied fiberglass/polyester yarn. The yarns would be exported from the
U.S. on beams or bobbins. The first operation, known as "uptwisting," involved twisting each continuous yarn onto itself in one direction to form what is referred to as 4.0 "Z" turns per inch. You stated that the uptwisting operation is a prerequisite to the subsequent plying operation to prevent the two twisted yarns from kinking up when they are plied together in the opposite direction in an "S" turn.
Following a meeting held at Headquarters on August 16, 1991, between Mr. Richard Nagel and members of my staff, you amended the facts of your original ruling request as follows. The
individual fiberglass yarns used in making both types of plied yarns will be purchased in the U.S. from the manufacturer pre uptwisted. The individual polyester yarns used in making the plied fiberglass/polyester yarn are not available from the manufacturer already uptwisted, but will be uptwisted by machine at your plant in Brownsville, Texas. Thus, both components used in the finished yarn products will be exported to Mexico in an "uptwisted" condition, ready for assembly. This amendment was confirmed by the letter dated August 21, 1991.
Based upon this amendment, the only operations performed in Mexico consist of plying and respooling. Eighty-six packages of uptwisted yarn are fed onto a machine which joins two yarns together by plying or twisting. The plying, which results in 3.5 "S'' turns per inch, also serves to strengthen and increase the thickness of the completed yarn. The plied yarns will be used primarily to make banding tape. The plied fiberglass yarn is formed from two uptwisted fiberglass yarns, whereas the plied fiberglass/polyester yarn is formed from one uptwisted fiberglass yarn and one uptwisted polyester yarn.
The resulting 86 packages of plied fiberglass yarn are wound back onto their original spools, with 2 plied yarns per spool.
Tape is applied to the end of the finished spool to prevent unraveling. The plied fiberglass/polyester yarn undergoes a separate "end winding'' or spooling operation whereby 18 bobbins or packages are taken at one time and respooled onto a single, larger spool. Thus, each of these spools imported into the U.S. contains 18 strands of plied yarn.
You contend that the plying operation constitutes an acceptable assembly within the meaning of subheading 9802.00.80,
HTSUS. Since you now plan to export the yarns to Mexico already uptwisted, we need not address your original argument that the uptwisting process constitutes an operation merely incidental to the assembly.
ISSUE:
Whether the plied fiberglass yarn and plied fiberglass/ polyester yarn will qualify for the partial duty exemption under subheading 9802.00.80, HTSUS, when imported into the U.S.
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 subheading 9802.00.80, HTSUS, is subject to duty upon the full value of the imported assembled article less the cost or value of the U.S. components, upon compliance with the documentary requirements of section 10.24, Customs Regulations (19 CFR 10.24).
Section 10.16(a), customs Regulations (19 CFR 10.16(a)) provides, in part, that:
The assembly operations 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, and may be preceded, accompanied, or followed by operations incidental to the assembly as illustrated in paragraph (b) of this section.
We have held that twisting of yarns on a machine to form twines is an acceptable assembly operation because it is a method used to combine or join yarns, which are solid components. See Headquarters Ruling Letters (HRL) 555594 dated May 16, 1990;
555128 dated January 9, 1989; 554531 dated May 29, 1987. Thus, we find that the planned operation of plying or twisting two uptwisted yarns to form one stronger and thicker fiberglass yarn or fiberglass/polyester yarn is an acceptable assembly operation for purposes of subheading 9802.00.80, HTSUS.
The last step performed in Mexico on the plied fiberglass/polyester yarn, i.e., end winding or spooling, is a type of packaging operation which readies the yarn for sale to customers. See HRL 555594 dated May 16, 1990. An assembled article which otherwise qualifies for the exemption under subheading 9802.00.80, HTSUS, will not be disqualified by reason of having been packaged abroad. See 19 CFR 10.16(f).
HOLDING:
Based upon the facts in your amended ruling request, the plied fiberglass yarn and plied polyester/fiberglass yarn will be eligible for the partial duty exemption under subheading 9802.00.80, HTSUS, upon compliance with the documentary requirements of 19 CFR 10.24. The uptwisted yarns are exported to Mexico in a condition ready for assembly without further
fabrication, and the plying of these yarns constitutes an acceptable assembly operation within the meaning of 9802.00.80, HTSUS. Therefore, an allowance in duty is permitted for the cost or value of the U.S. components, the uptwisted individual yarns. The respooling of the plied fiberglass/polyester yarn is a type of packaging operation which does not preclude application of the exemption under subheading 9802.00.80, HTSUS.
Sincerely,
John Durant, Director
Commercial Rulings Division