CLA-2-71:OT:RR:NC:N4:433
C.J. Erickson, Esq.
Cowan, Liebowitz & Latman, P.C.
1133 Avenue of the Americas
New York, NY 10036
RE: 9802.00.80 ELIGIBILITY; AND THE COUNTRY OF ORIGIN AND COUNTRY OF ORIGIN MARKING OF PRECIOUS METAL RINGS OF UNITED STATES ORIGIN SENT TO THAILAND FOR THE SETTING OF PRECIOUS GEMSTONES.
Dear Mr. Erickson:
In your letter dated December 28, 2015, on behalf of Tiffany & Co., you requested a country of origin ruling on precious metal rings (platinum, gold and silver) casted in the United States and sent to Thailand to be set with melee diamonds.
The merchandise concerned involves United States casted rings of platinum, gold and silver sent to Thailand for polishing and setting of melee diamonds of various origin. After assembling the rings in Thailand, the rings are sent back to the United States for final polishing.
I. 9802.00.80 Eligibility:
Subheading 9802.00.80, HTSUS, provides a partial duty exemption for:
Articles . . . 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 an article may receive a duty allowance. An article entered under this tariff provision is subject to duty upon the full appraised value of the imported assembled article, less the cost or value of the U.S. components assembled therein, upon compliance with the documentation requirements of 19 C.F.R. § 10.24.
Section 10.14(a), Customs Regulations (19 C.F.R. § 10.14(a)), states in part that:
The components must be in condition ready for assembly without further fabrication at the time of their exportation from the [U.S.] to qualify for the exemption. Components will not lose their entitlement to the exemption by being subject to operations incidental to the assembly either before, during, or after their assembly with other components.
Section 10.16(a), Customs Regulations (19 C.F.R. § 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. See 19 C.F.R. § 10.16(b). 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 C.F.R. § 10.16(c).
We note 19 C.F.R. § 10.16(c)(4), in which “polishing” that imparts significant new characteristics or qualities to an affected article, will result in operations not being incidental to the assembly process. Nevertheless, and consistent with Headquarters ruling HQ 555801 dated January 2, 1991, the returned rings imported into the United States and subject to further “polishing operations” do not impart any significant new characteristics or qualities to the affected articles, other than merely cleaning and shining the precious metal rings with their melee diamonds, prior to being packaged for sale. Accordingly, the attaching of melee diamonds of various origin to United States ring castings, which are subsequently thereafter polished in the United States, is considered an acceptable assembly operation. Therefore, a duty exemption is available under 9802.00.80, for the cost or value of the United States origin components when the rings are returned to the United States.
II. Country of Origin and Country of Origin Marking:
Section 304 of the Tariff Act of 1930 (19 U.S.C. 1304), provides that unless excepted, every article of foreign origin imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.
Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements of 19 U.S.C. 1304. Pursuant to 19 CFR 134.1(b), “country of origin” means the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the country of origin. A substantial transformation results when a new and different article emerges from the processing having a distinctive name, character or use. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 269 (1940).
In determining whether the combining of parts or materials constitutes a substantial transformation, the issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 573 F. Supp. 1149 (CIT 1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations which are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. See C.S.D. 85-25.
With certain exceptions not applicable here, Customs (CBP) has ruled that products of the United States which are exported for further processing and subsequently returned, are not subject to country of origin marking upon importation to the United States unless the further processing in the foreign country constitutes a substantial transformation of the product. See HQ 732480, (July 31, 1989) and HQ H004448, (May 21, 2007). The simple combining/assembly operation of mounting (setting) melee diamonds of various origin while abroad onto precious metal rings casted in the United State does not substantially transform the precious metal rings of United States origin into goods of Thailand. This is consistent with Headquarters ruling HQ 555801 dated January 2, 1991 and New York ruling N251883 dated April 17, 2014, in which the mounting (setting) of gemstones while abroad onto precious metal rings casted in the United States, was considered a simple combining operation, and therefore not a substantial transformation of the United States casted rings.
As such, the simple assembly operation of the merchandise concerned does not substantially transform the precious metal rings of United States origin into goods of Thailand; consequently, the country of origin is the United States. Goods of United States origin are not subject to the country of origin marking requirements under 19 U.S.C. §1304, and are therefore exempt from country of origin marking upon importation into the United States.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Neil H. Levy at [email protected].
Sincerely,
Deborah C. Marinucci
Acting Director
National Commodity Specialist Division