CLA-2 CO:R:C:S 556160 DSN
Mr. Philip Freeman
Cain Customs Brokers, Inc.
P.O. Box 150
Hidalgo, Texas 78557
RE: Inductance coils from Mexico; assembly; 19 CFR 10.14;
10.16; Mast; General Instrument; 555539; 555533
Dear Mr. Freeman:
This is in response to your letter of July 25, 1991, on
behalf of Furnas Electric Company, requesting a ruling concerning
the applicability of subheading 9802.00.80, Harmonized Tariff
Schedule of the United States (HTSUS), to inductance coils
imported from Mexico. A sample was submitted with your request.
According to your submission, Furnas Electric intends to
assemble inductance coils in Mexico from U.S.-origin components.
Inductance coils are designed to be used in relays, starters,
contactors, and other electrical applications.
Step one of the assembly process consists of placing a
plastic bobbin on a pedal controlled, wire-winding machine where
a magnet wire is attached and wound onto the bobbin. The magnet
wire is then run off the bobbin and twisted to the length
specified for its particular application. After the wire is
twisted, it is placed back on the bobbin. The wire is wound
again before it is cut to length and secured with tape.
You state that, depending on the application of the coils,
some of the wire is tinned by dipping the wire in liquid solder.
Tinning is performed to keep the ends of the wires from fraying
and to improve the solderability of the wires. After tinning,
the coils are tested for inductance and resistance and then
packaged into bags.
Whether the inductance coils will qualify for the partial
duty exemption available under subheading 9802.00.80, HTSUS, when
returned to the U.S.
LAW AND ANALYSIS:
Subheading 9802.00.80, HTSUS, provides a partial duty
(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 this tariff provision is subject to duty
upon the full cost or 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 10.14(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
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.
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 subheading
9802.00.80, HTSUS, to that component. See, 19 CFR 10.16(c).
We have held that winding wire around a spool is considered
an acceptable assembly operation within the meaning of this
tariff provision. See Headquarters Ruling Letter (HRL) 555533 of
June 4, 1990. See also General Instrument Corporation v. United
States, 61 CCPA 86, C.A.D. 1128, 499 F.2d 1318 (1974), rev'g, 70
Cust. Ct. 151, C.D. 4421, 359 F. Supp. 1390 (1973); 19 CFR
10.16(a). Therefore, in the present case, winding the magnet
wire around a bobbin is an acceptable assembly operation.
Twisting the wires together and securing the wire to the bobbin
with tape also are considered acceptable assembly operations.
See HRL 555221 of October 24, 1989. In addition, cutting the
wire to a specified length is considered an acceptable incidental
operation. See, 19 CFR 10.16(b)(6) and HRL 555539 of June 7,
However, the tinning operation is not an acceptable assembly
operation under subheading 9802.00.80, HTSUS, as there is no
joinder of two solid components. In order to determine if the
tinning operation in this case is incidental to the assembly
process, certain criteria must be examined.
In United States v. Mast Industries, Inc., 515 F.Supp. 43, 1
CIT 188, aff'd, 69 CCPA 47, 668 F.2d 501 (1988), the court, in
examining the legislative history of the meaning of "incidental
to the assembly process," stated that:
[t]he apparent legislative intent was to not preclude
operations that provide an "independent utility" or that
are not essential to the assembly process; rather, Congress
intended a balancing of all relevant factors to ascertain
whether an operation of a "minor nature" is incidental to
the assembly process.
The court then indicated that relevant factors included:
(1) whether the relative cost and time of the operation
are such that the operation may be considered minor;
(2) whether the operation is necessary to the assembly
(3) whether the operation is so related to the assembly
that it is logically performed during assembly; and
(4) whether economic or other practical considerations
dictate that the operations be performed concurrently
Based on the information provided in your submission, we
conclude that the cost and time of the tinning operation is
insignificant in comparison to the total value of the lead coils.
You state that tinning one end of a lead wire takes approximately
7.7 seconds at a cost of $.005, while tinning both ends takes
about 12.1 seconds at a cost of less then 1 percent of the total
value of the coils. We further believe that the tinning
operation is sufficiently related to the assembly that it is
logically performed concurrently with the assembly. Thus,
applying the Mast criteria to this case, it is our opinion that
the tinning operation is incidental to the assembly process.
Please note that no allowance may be made for the solder under
subheading 9802.00.80, HTSUS, as it is not a fabricated component
exported in condition ready for assembly.
On the basis of the information provided, it is our opinion
that the operations performed abroad are considered proper
assembly operations or operations incidental to assembly.
Therefore, allowances in duty may be made under this tariff
provision for the cost or value of the U.S. fabricated components
upon compliance with the documentary requirements of 19 CFR
John Durant, Director
Commercial Rulings Division