CLA-2 CO:R:C:S 557493 MLR

Mr. Robert A. Allen
Ear Sense
106 Finnell Drive
Weymouth, MA 02188

RE: Applicability of partial duty exemption under HTSUS subheading 9802.00.80 to imitation costume earrings; pushing; slipping; snapping; gluing; welding

Dear Mr. Allen:

This is in reference to your letter of July 22, 1993, requesting a ruling regarding the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to imitation costume earrings. Samples of all components as they are sent abroad for assembly and after assembly are submitted with your request.

FACTS:

Ear Sense plans to ship U.S.-origin earring components to Mexico where they will be made into imitation costume earrings. The processes will consist of snapping a glass stone into a steel plated setting, pushing a plastic ball into a metal pin, welding or gluing a metal ornament onto a metal post, and pushing a rubber sleeve onto an earring post. You also request the classification of the earring components exported from the U.S. to Mexico.

ISSUES:

I. Whether the imitation costume earrings will qualify for the partial duty exemption under HTSUS subheading 9802.00.80, when imported into the United States.

II. What is the proper classification of the imitation costume earrings under the HTSUS?

LAW AND ANALYSIS:

I. Subheading 9802.00.80, HTSUS

Subheading 9802.00.80, HTSUS, 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, 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 components.

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, lamination, 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 CFR 10.16(a). 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).

The operations of snapping a glass stone into a steel plated setting, pushing a plastic ball into a metal pin, welding or gluing a metal ornament onto a metal post, and pushing a rubber sleeve onto an earring post are considered acceptable assembly operations pursuant to 19 CFR 10.16(a) for purposes of subheading 9802.00.80, HTSUS.

II. Classification

The classification of merchandise under the HTSUS is governed by the General Rules of Interpretation (GRI's). GRI 1, HTSUS, states in part that "for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes...."

GRI 2(a), HTSUS, states:

Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article....

Heading 7117, HTSUS, provides for "Imitation jewelry...." The Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System (HCDCS) (pg. 964-965) state that this "...heading covers unfinished or incomplete articles of imitation jewellery (ear-rings, bracelets, necklaces, etc.), such as:

(a) Semi-finished split rings, consisting of anodised aluminum wire, usually twisted or surface worked, whether or not fitted with a crude clasp, sometimes used as ear-rings without further working;

(b) Ornamental motifs of base metal, whether or not polished, assembled by small links into strips or indefinite length."

Upon completion of the operations in Mexico, finished earrings of base metal and earring settings with attached rubber sleeves will be imported into the U.S. We are of the opinion that the earring settings with attached rubber sleeves have the essential character of the completed earring and, therefore, pursuant to GRI 2(a), HTSUS, are classified as the completed article. Based on the information presented, the finished earrings of base metal and earring settings with attached rubber sleeves are classified under subheading 7117.19.50, HTSUS, which provides for "Imitation Jewelry...Of base metal, whether or not plated with precious metal...Other...Other...."

The U.S. Customs Service only issues binding rulings for the eight digit tariff classification of articles imported into the U.S. Customs normally does not provide the Harmonized Tariff Schedule provisions for exported articles. However, in our opinion the following represents the international six digit Harmonized Tariff Schedule provisions for those articles exported to Mexico for assembly.

1. Pursuant to GRI 2(a), HTS, the plastic balls have the essential character of imitation jewelry and, therefore, are classified under subheading 7117.90, HTS, which provides for other imitation jewelry. See, Headquarters Ruling Letter (HRL) 952104 dated July 13, 1993.

2. Pursuant to GRI 2(a), HTS, the earring settings of base metal and metal earring ornamentations have the essential character of finished earrings and, therefore, are classified under subheading 7117.19, HTS, which provides for other imitation jewelry of base metal, whether or not plated with precious metal.

3. The glass gemstones are classified under subheading 7018.10, HTS, which provides for "...Glass beads, imitation pearls, imitation precious or semiprecious stones and similar glass smallwares...."

4. The rubber sleeves are classified under subheading 4016.99, HTS, which provides for other articles of vulcanized rubber other than hard rubber.

5. The metal steel posts are classified under subheading 7326.90, HTS, which provides for other articles of iron or steel.

HOLDING:

On the basis of the information and samples submitted, we conclude that the imitation costume earrings do not lose their physical identity in the assembly operation, and are not advanced in value or improved in condition except by assembly operations and operations incidental thereto. Therefore, allowances in duty may be made under subheading 9802.00.80, HTSUS, for the cost or value of the U.S. fabricated components upon return of the imitation costume earrings to the U.S., provided the documentary requirements of 19 CFR 10.24 are satisfied.

Furthermore, upon importation into the U.S., the finished earrings and earring settings with attached plastic sleeves are classified under subheading 7117.19.50, HTSUS, which provides for other imitation jewelry of base metal, whether or not plated with precious metal. This tariff provision is dutiable at the Column 1 rate of 11 percent ad valorem.

Sincerely,

John Durant, Director