CLA-2 CO:R:C:V 555774 KCC
Mrs. Orquidea Catalanotto
1981 Marcus Avenue
Lake Success, New York 11042
RE: Substantial transformation of Japanese wire by cutting to
length and crimping operations performed in the U.S.19 CFR
10.12(e); 19 CFR 10.14(b); 055526; 067824; 723135; 731953;
Anheuser-Bush; Timex; Superior Wire; National Juice
Dear Mrs. Catalanotto:
This is in response to your letters dated November 1, and
20, 1990, requesting a ruling concerning whether certain
processing of Japanese-origin wire in the U.S. renders it
eligible for the duty exemption available under subheading
9802.00.80, Harmonized Tariff Schedule of the United States
(HTSUS), when it is later incorporated into an electrical harness
in Mexico. A sample of the wire before and after the U.S.
processing, as well as a sample of the electrical harness into
which the wire will be incorporated were submitted for
Sumitrans manufactures wire for electrical harnesses used in
automobiles and motorcycles. There are different lengths and
diameters of wire used in the manufacture of the harnesses
depending upon the automobile or motorcycle for which the harness
You intend to import Japanese origin wire into the U.S..
In the U.S., the wire will be cut to varying lengths and U.S.-
origin electrical connectors will be crimped onto the ends of the
wire. The wire now called "wire for an unassembled harness" is
dedicated to use with a specific harness. The wire's value is
0.6166 cents and the U.S. terminals are worth 0.1139 cents. The
operations performed in the U.S. increase the value of the wire
by approximately 66 percent (U.S. processing adds 0.4100 cents).
The wire for the unassembled harness and additional U.S.
components will then be shipped to Mexico for incorporation into
an electrical harness.
Whether the Japanese-origin wire is substantially
transformed into a product of the U.S., thereby rendering it
eligible for the duty exemption available under subheading
9802.00.80, HTSUS, when incorporated into an electrical harness
LAW AND ANALYSIS:
For a component to be eligible for subheading 9802.00.80,
HTSUS, treatment it must first be a "product of the United
States." According to section 10.12(e), Customs Regulations (19
CFR 10.12(e)), a "product of the United States" is an article
manufactured within the customs territory of the U.S. and may
consist wholly of U.S. components or materials, of U.S. and
foreign components or materials, or wholly of foreign components
or materials. If the article consists wholly or partially of
foreign components or materials, the manufacturing process must
be such that the foreign components or materials have been
substantially transformed into a new and different article, or
have been merged into a new and different article.
A substantial transformation occurs when, as a result of
manufacturing processes, a new and different article emerges,
having a distinctive name, character, or use, which is different
from that originally possessed by the article or material before
being subjected to the manufacturing process. See, Anheuser-
Busch Association v. United States, 207 U.S. 556, (1908); Timex
Corporation v. United States, Slip Op. 88-90, 12 CIT , 691
F.Supp. 1445 (CIT 1988); and section 10.14(b), Customs
Regulations (19 CFR 10.14(b)).
We have previously held that wire which is cut to length,
stripped and fitted with terminals has not been substantially
transformed into a product of the country where the described
operations have occurred. See, Headquarters Ruling Letter (HRL)
055526 dated June 6, 1978 (a substantial transformation does not
occur when a coil assembly is formed by soldering terminals to
electrical wire which has been machine wound cut, trimmed, and
tinned); HRL 067824 dated November 1, 1982 (assembly of Japanese-
origin wire with terminals does not create a new and different
article of commerce with a different name, character, and use);
HRL 723135 dated September 23, 1983 (wire rope with attached
fittings has not been substantially transformed); and HRL 731953
dated April 27, 1990 (a substantial transformation does not occur
when head assemblies are attached to the ends of a cable).
In this case, we are of the opinion that the Japanese-origin
wire will not be substantially transformed into a product of the
U.S. Although cutting the wire to length and attaching the
terminals to the wire adds value to the wire, these operations do
not create a new article with a new name, character or use.
You state that after the U.S. operations are complete the
wire's name will be changed to "wire for an unassembled harness."
The courts have held that although a name change may support a
finding of substantial transformation, this fact is not
necessarily determinative. Superior Wire, a Division of Superior
Products Company v. United States, 669 F. Supp. 472 (CIT 1987),
aff'd, 867 F.2d 1409 (Fed.Cir. 1989). Moreover, it has been
stated that "a change in the name of the product is the weakest
evidence of a substantial transformation." National Juice
Products Ass'n v. United States, 628 F. Supp. 978 (CIT 1986).
Although the wire may appear to undergo a name change,
according to the HTSUS the "wire" and the "wire for an
unassembled harness" both are classified under the same heading.
From your description and the samples submitted it would appear
that the "wire" and the "wire for an unassembled harness" would
be classified under heading 8544, HTSUS, which provides for
insulated (including enameled or anodized) wire, cable (including
coaxial cable) and other insulated electric conductors, whether
or not fitted with connectors; optical fiber cables, made up of
individually sheathed fibers, whether or not assembled with
electric conductors of fitted with connectors. The Explanatory
Notes for this heading indicate that "wire, cable, etc., remain
classified in this heading if cut to length or fitted with
connectors (e.g., plugs, sockets, lugs, jacks, sleeves or
terminals) at one or both ends." The fact that the "wire" and
"wire for an unassembled harness" are classified under the same
heading is evidence that the Japanese-origin wire has not been
Furthermore, the "wire for an unassembled harness" does
not possess a character and use different from the imported
"wire." The essential character and use of the imported "wire"
is to conduct electrical current. After the "wire" is cut to
length and the terminals are attached, the essential character
and use of the "wire for the unassembled harness" remains the
same--it conducts electrical current.
In addition, the courts have often looked for a transition
from producers' to consumers' goods, as another indication of
substantial transformation. See, Superior Wire, 669 F. Supp.
479. Based on the information you have provided, the wire is
clearly a producer good throughout the operations performed in
the U.S., which reinforces our position that a substantial
transformation does not occur.
On the basis of the information and samples submitted, we
are of the opinion that the Japanese wire is not substantially
transformed into a product of the U.S., but rather remains a
product of Japan. Therefore, the Japanese wire will not be
eligible for the partial duty exemption available under
subheading 9802.00.80, HTSUS, when it is imported into the U.S.
incorporated in the electrical harness.
John Durant, Director
Commercial Rulings Division