CLA-2 CO:R:C:S W557492 RA
Mr. Rudy A. Pina
R.A. Pina & Associates
P.O. Box 2496
Nogales, Arizona 85628
RE: Applicability of partial duty exemption to wooden crates assembled abroad and imported filled with asparagus
Dear Sir:
This is in response to your letter of July 19, 1993, requesting a ruling on behalf of your client, Dole Fresh Fruits Company of Fresno, California, regarding the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to wooden crates assembled in Mexico from components of U.S. origin and imported containing asparagus.
FACTS:
U.S.-made precut wooden components, nails and labels will be exported to Mexico, where the wooden pieces will be assembled into a wooden crate by means of nails, and the labels will then be glued onto the precut end pieces. After assembly, the crates will be filled with asparagus, presumably of Mexican origin, and shipped to the U.S. You maintain that the U.S.-origin components comprising the crates should be afforded a duty allowance under subheading 9802.00.80, HTSUS. You advised by telephone that it is your understanding that the wooden crates are reused after they are imported and the asparagus is removed in the U.S.
ISSUE:
May a duty allowance be granted under subheading 9802.00.80, HTSUS, for the components of U.S. origin assembled in Mexico into wooden crates and used to ship asparagus to the U.S.?
LAW AND ANALYSIS:
HTSUS subheading 9802.00.80 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 HTSUS subheading 9802.00.80 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 value of the imported assembled article, less the cost or value of such 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 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. According to 19 CFR 10.16(f):
The packing abroad of merchandise into containers does not in itself qualify either the containers or their contents for the exemption. However, assembled articles which otherwise qualify for the exemption and which are packaged abroad following their assembly will not be disqualified from the exemption by reason of their having been so packaged, whether for retail sale or for bulk shipment. The tariff status of the packing materials or containers will be determined in accordance with General Rule of Interpretation [GRI] 5, HTSUS.
GRI 5(a) states that containers specially shaped or fitted to contain a specific article or set of articles, suitable for long term use and presented with the article for which they are intended, shall be classified with such articles when of a kind normally sold therewith. GRI 5(b) provides that packing materials and containers entered with the goods shall be classified with the goods if of a kind normally used for packing such goods and if clearly not suitable for repetitive use.
Because the wooden crates involved in this case are not specially shaped or fitted to contain an article, and are suitable for repetitive use, neither GRI 5(a) nor (b) applies and the crates are separately classifiable from their contents (the asparagus). As a result, it is our opinion that the crates may be separately entered under subheading 9802.00.80, HTSUS, assuming they meet the conditions and requirements of that provision. Based on the information presented, we find that the operations performed in Mexico to assemble the wooden crates are acceptable assembly operations under 19 CFR 10.16(a). Therefore, allowances in duty may be made under subheading 9802.00.80, HTSUS, for the cost or value of the U.S.-origin components comprising the crates, upon compliance with the documentation requirements of 19 CFR 10.24.
HOLDING:
Wooden crates, which are assembled in Mexico from U.S. origin components and then filled with foreign asparagus for shipment to the U.S., are separately classifiable from their contents pursuant to GRI 5, HTSUS. Therefore, when the crates and asparagus are imported into the U.S., the crates may be separately entered under subheading 9802.00,80, HTSUS, and allowances in duty may be granted for the cost or value of the
U.S. components comprising the crates, upon compliance with the documentation requirements of 19 CFR 10.24.
Sincerely,
John Durant, Director
Commercial Facilitation Division
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