CLA-2 CO:R:C:S 556160 DSN

Mr. Philip Freeman
Cain Customs Brokers, Inc.
421 Texano
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.


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, 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, 1990.

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 process; (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 with assembly.

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 10.24.


John Durant, Director
Commercial Rulings Division