CLA-2 RR:TC:SM 559789 DEC

Mr. Scott Weisman
Jolan/Madewell Corporation
945 S.E. 14th Street
Hialeah, Florida 33010

RE: Products of the United States; subheading 9802.00.80, HTSUS; Assembly; Zipper; HRL 556808; 19 CFR 10.12(e); Torrington Co. v. United States, 764 F.2d 1563, 3 CAFC 158 (Fed. Cir. 1985); 19 CFR 10.24

Dear Mr. Weisman:

This is in response to your letter of April 11, 1996, requesting a ruling with respect to whether zippers will qualify as a product of the United States for purposes of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

You question in your submission whether continuous zipper chain and sliders from an unspecified foreign country that are imported into the United States and then made into individual zippers are substantially transformed into a product of the United States. We received your samples of the various stages of production of the zippers. To summarize, zipper chains in 200 yard rolls are gapped and bottom stopped to length. Next a slider is mounted on the gapped material and the zipper is then top stopped. Finally, the zippers are then sheared into individual units. You further question whether the businesses to which you will sell the finished zippers may receive a partial duty allowance under subheading 9802.00.80, HTSUS, if the zippers are used in the assembly of an article abroad.

ISSUE:

Whether foreign-made zipper components made into completed zippers in the United States are substantially transformed into "products of the United States" for purposes of subheading 9802.00.80, HTSUS.

LAW AND ANALYSIS:

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).

For purposes of subheading 9802.00.80, HTSUS, 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. Section 10.12(e), Customs Regulations (19 CFR 10.12(e)). A substantial transformation occurs "when an article emerges from a manufacturing process with a new name, character, or use which differs from that of the original material subjected to the process." Torrington Co. v. United States, 764 F.2d 1563, 1568, 3 CAFC 158 (Fed. Cir. 1985).

In Headquarters Ruling Letter (HRL) 556808, dated December 12, 1992, Customs addressed the issue of whether foreign-made zipper components processed into completed zippers in the U.S. were substantially transformed into products of the U.S. for purposes of subheading 9802.00.80, HTSUS. In that case, Customs concluded that the assembly of zipper components into a finished zipper was a

relatively minor operation which left the identity of the components intact. The essential character of the zipper (i.e., chain and slider) was not substantially changed, nor did it lose its separate identity as a result of the assembly operation in the U.S. In addition, the foreign components were already dedicated to use as a zipper before being assembled.

In the instant case, we find that the conclusions in HRL 556808 are applicable to the facts at issue. The assembly of the zipper components into a finished zipper is a relatively minor operation or combining process which leaves the identity of the components intact. Moreover, the essential character of the zipper (i.e., chain and slider) is not substantially changed, nor does it lose its separate identity as a result of the assembly operation in the U.S. Furthermore, we find that the foreign components are already dedicated to use as a zipper prior to their being assembled together. Accordingly, the zipper will not be considered a "product of the United States" and therefore will not be entitled to a duty allowance under subheading 9802.00.80, HTSUS, when returned to the U.S. as part of an article assembled abroad.

HOLDING:

Foreign-made zipper components assembled into completed zippers in the U.S. are not considered "products of the United States" for purposes of subheading 9802.00.80, HTSUS, as the components are not substantially transformed into a new and different article of commerce as a result of that processing.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. 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,

John Durant, Director
Tariff Classification Appeals
Division