CLA-2-95:RR:NC:FC:224 A82897
Peter N. Lombardi
Hextek
302-A Raleigh St
Wilmington NC 28412
RE: The tariff classification of fishing rods from China or Taiwan.
Dear Mr. Lombardi:
This is in response to your letter of April 16, 1996, concerning the eligibility for a duty exemption under subheading 9802.00.80, Harmonized Tariff Schedules of the United States Annotated (HTSUSA), of U.S.-origin materials sent to China or Taiwan to be assembled with other components to create fishing rods.
The finished articles under consideration are fishing rods to be used for fresh and salt-water sport fishing. It is stated that unfinished rod components called blanks are manufactured and painted in the United States and then exported to China or Taiwan. The blanks are then subjected to a processing operation whereby guides, handles, reel seats, and thread wrapping are applied to the rod blanks. The finished fishing rods are then returned to the United States for normal distribution. You state that the components to be bound on the rods, including the cork handles and reel seats, "will accompany our unfinished product into the Orient. Therefore, we will not be purchasing these components from any Asian manufacturers." It remains unclear to us, however, what the country of origin of these components is.
The applicable tariff subheading for fishing rods will be 9507.10.0040, HTSUSA, which provides for "Fishing rods, fish hooks and other line fishing tackle...: Fishing rods and parts and accessories thereof." The rate of duty will be 7 percent ad valorem.
Partial Duty Exemption
For your information, subheading 9802.00.80, HTSUSA, 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, HTSUSA, 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 the U.S. components assembled therein, 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 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.
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.
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 HTSUSA subheading 9802.00.80 to that component. See, 19 CFR 10.16(c).
Your letter does not make clear what specific components (or materials) are used in the manufacturing or assembly process and specifically which components are U.S. made and which are of foreign origin. Nor does it give enough information on the physical condition of the blanks or any other U.S. originated components at the time they are exported for eventual processing in the Orient. And it does not provide detailed documentary information relating to the nature of the processing and assembly operations performed in the Orient on the U.S. components. This information is needed before Customs can determine the eligibility of one or more fishing rod components for duty exemption under subheading 9802.00.80, HTS, and should be submitted to the appropriate Customs officers at the port of entry for their review.
Assuming, however, that the U.S.-origin rod blanks and the guide, handle and reel seat components (if also manufactured in the U.S.) are exported in a condition ready for assembly without further fabrication, and have not been advanced in value or improved in condition abroad except by being assembled to each other by acceptable joining methods such as fastening, gluing or the like, the imported completed fishing rods may qualify for treatment under subheading 9802.00.80, HTS, with allowances in duty for the cost or value of those U.S. components incorporated therein. The imported fishing rods may then be subject to duties on their full value less the value of the U.S. fabricated blanks (and any other U.S. fabricated components) upon compliance with the documentary requirements of section 10.24, Customs Regulations, in accordance with subheadings 9802.00.80, HTS.
This ruling is being issued under the provisions of Section 177 of the Customs Regulations (19 C.F.R. 177).
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is imported. 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,
Roger J. Silvestri
Director
National Commodity
Specialist Division