CLA-2 RR:CR:SM 561873 BLS
Ms. Ginette Underwood, Customs Manager
Siemens Westinghouse
30 Milton Avenue
Hamilton, Ontario, Canada
L8N 3K2
RE: Eligibility of gas turbine engines for partial duty exemption under
subheading 9802.00.80, HTSUS
Dear Ms. Underwood:
This is in reference to your facsimile message dated February 28, 2000 and subsequent correspondence, concerning the eligibility of gas turbine engines from Germany for the partial duty exemption under subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), upon importation into the United States.
FACTS:
Siemens Westinghouse (Siemens), a division of Siemens Canada, is engaged in the assembly of gas turbine engines. Siemens ships hundreds of components from its facility in Hamilton, Canada, to its plant in Germany, where the parts will be assembled into three primary subassemblies (combustion system, compressor and turbine end) which in turn will be assembled into the completed gas turbine engine. The various components used in the assembly process include parts of U.S. origin. Upon completion of the assembly process, the engines will be imported into the U.S.
A list of the components used in the three subassemblies and the country of origin of each component is included with the submission. There are approximately 250 U.S.-origin parts included in the three subassemblies.
LAW AND ANALYSIS:
Subheading 9802.00.80, HTSUS, provides a partial duty exemption
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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)), provides 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, 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).
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While the specific assembly operations are not detailed, the information you have provided indicates that the components will be assembled into the subassemblies and the subassemblies into the gas turbine engines by processes such as welding, force fitting, soldering and the use of fasteners (screws, bolts, etc.), methods which are considered acceptable assembly operations under 19 CFR 10.16(a). You state that the components will undergo only operations which entail being attached to other components in the exercise of assembling the engine.
Accordingly, we will assume for purposes of this ruling request that the methods of assembly will conform to the requirements of 19 CFR 10.16(a). We will also assume, based on the submitted information, that any operations which are not actual assembly operations are merely incidental to the assembly process (see 19 CFR 10.16(c)).
Therefore, the imported turbine engines will be entitled to the allowance in duty for the cost or value of U.S.-origin components under subheading 9802.00.80, HTSUS, upon compliance with the regulations discussed above and the documentary requirements of section 10.24, Customs Regulations (19 CFR §10.24).
HOLDING:
Based on the information submitted, and assuming that the operations performed in Germany on the U.S.-origin components are assembly operations or operations incidental thereto, the turbine engines imported from Germany will be entitled to the partial duty exemption under subheading 9802.00.80, HTSUS, upon compliance with the documentary requirements of section 10.24, Customs Regulations (19 CFR §10.24).
A copy of this ruling letter should be attached to the entry documents filed at the time the 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
Commercial Rulings Division