CLA-2 CO:R:C 555333 RA
TARIFF NO: 9801.00.10; 9802.00.80
Mr. John W. Cain
Cain Customs Brokers, Inc.
P.O. Box 150
Hildalgo, Texas 78557
RE: Applicability of subheadings 9801.00.10 and 9802.00.80,
HTSUS, and country of origin marking requirements, to
refrigerator parts imported from Mexico
Dear Mr. Cain:
This is in response to your letter of March 10, 1989, on
behalf of the Whirlpool Corporation, requesting a ruling on the
applicability of subheadings 9801.00.10 and 9802.00.80,
Harmonized Tariff Schedule of the United States (HTSUS), to
certain handles and other parts for refrigerators to be imported
from Mexico. You also ask whether the parts are excepted from
country of origin marking requirements.
FACTS:
Handle kit packages for U.S.-made refrigerators are made up
to be placed inside the units for later attachment by the dealers
in the U.S. It is assumed for purposes of this ruling that all
parts are of U.S. origin. Part assembly No. 1121708 is created
by packaging three spacers, one end cap, and nine screws into a
plastic bag which is heat sealed. Part No. 1123310 consists of a
freezer compartment door handle on which end caps have been
attached by pressing or screwing. Part No. 1122970 is formed by
pressing or screwing end caps onto a refrigerator compartment
door handle. A finished handle kit is made up of the above-
mentioned three parts, a handle extension, and an instruction
sheet all wrapped in a sheet of polyethylene film which is either
taped shut or heat sealed.
ISSUES:
1. Will the returned handle kit packages be entitled to an
exemption from duty under either subheading 9801.00.10 or
9802.00.80, HTSUS?
2. What are the country of origin marking requirements
applicable to the imported handle kit packages?
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LAW AND ANALYSIS:
1. Applicability of subheadings 9801.00.10 and 9802.00.80, HTSUS
Subheading 9801.00.10, HTSUS, provides for the free entry of
U.S.-made products exported and returned without having been
advanced in value or improved in condition by any process of
manufacture or other means while abroad. The courts have held
that the packaging abroad of U.S.-made products will not preclude
classification under this tariff provision when there is no change
in the value or condition of the articles themselves apart from
their containers. See United States v. John V. Carr & Son,
Inc., 69 Cust. Ct. 78, C.D. 4377 (1972), aff'd 61 CCPA 52, C.A.D.
1118 (1974). In our ruling letter to you of June 16, 1989 (HQ
555329), we held that air conditioner parts made in the U.S. and
exported to Mexico for packaging in plastic bags, which are
weighed, sealed, and labeled, are not considered to have been
advanced in value or improved in condition for purposes of
subheading 9801.00.10, HTSUS. This holding would apply to the
U.S.-made refrigerator handle parts which are merely placed in
plastic bags or sheets in Mexico and returned.
Subheading 9802.00.80, HTSUS, provides a partial duty
exemption for articles assembled abroad in whole or in part of
fabricated components of U.S. origin with no operations performed
thereon except the joining of the components and operations
incidental thereto. The U.S. components must be exported in
condition ready for assembly without further fabrication, and
cannot lose their physical identity in the assembled article by
change in form, shape or otherwise. Duty is assessed on the full
appraised value of the imported merchandise, less the cost or
value of the U.S.-made components, upon compliance with the
documentation requirements of section 10.24, Customs Regulations
(19 CFR 10.24).
Section 10.16(a), Customs Regulations (19 CFR 10.16(a)),
provides that valid foreign assembly operations may consist of
any method used to join or fit together solid components, such as
welding, riveting, force fitting, gluing or the use of fasteners.
Therefore, the freezer compartment door handle and refrigerator
compartment door handle which have end caps attached by pressing
(analogous to force fitting) or screwing would be entitled to
tariff treatment under subheading 9802.00.80, HTSUS. The
attachment of the end caps to the handles in this manner
constitutes an acceptable assembly operation pursuant to
19 CFR 10.16(a).
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2. Applicability of country of origin marking requirements
Section 304 of the Tariff Act of 1930, as amended, generally
requires, subject to specified exceptions, that every article of
foreign origin (or its container) imported into the U.S. shall be
marked in a conspicuous place as legibly, indelibly and
permanently as the nature of the article (or container) will
permit, in such manner as to indicate to the ultimate purchaser
in the U.S. the English name of the country of origin of the
article.
Part 134, Customs Regulations (19 CFR Part 134), implements
the requirements and exceptions of the statute. Pursuant to
section 134.1, Customs Regulations, the ultimate purchaser is
generally the last person in the U.S. to receive the article in
the form in which it was imported. We understand that, after
importation, the handle kit packages will be placed inside the
freezer or refrigerator compartment and shipped in this manner to
a dealer. The dealer will attach the handles to the
refrigerator/freezer before sale to the consumer. Under these
circumstances, we consider the dealer to be the last person in
the U.S. to receive the handle kit in the form in which it was
imported and, thus, is the ultimate purchaser.
The freezer compartment door handles and refrigerator
compartment door handles which have end caps attached and are
entitled to tariff treatment under subheading 9802.00.80, HTSUS,
are considered products of Mexico for purposes of 19 U.S.C. 1304.
See 19 CFR 10.22. Pursuant to 19 U.S.C. 1304(a)(3)(D) and 19 CFR
134.32(d), an imported article is excepted from marking if the
marking of its container will reasonably indicate the country of
origin. Since the dealers will receive the freezer compartment
door handles and refrigerator compartment door handles in a
polyethylene film which is taped shut or shrink-wrapped, the
country of origin marking may appear on the packaging instead of
on the handles themselves. The packages should be marked
"Handles Assembled in Mexico" or "Handles Assembled in Mexico of
U.S. Components." No country of origin marking is required on
the U.S.-made refrigerator handle parts (or their packaging)
which are merely packaged in plastic bags or sheets in Mexico and
returned. They are excepted from marking under 19 CFR 134.32(m),
as U.S. goods exported and returned.
None of the marking exceptions you specify in your
submission, 19 CFR 134.32(f), (g), and (h), is applicable in the
circumstances of this case. Under 19 CFR 134.32(f), articles
imported for use by the importer and not intended for sale in
their imported or any other form are excepted from marking. This
exception does not apply because the articles are for use by the
dealer, and not the importer. Under 19 CFR 134.32(g), articles
to be processed in the U.S. by the importer or for his account
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otherwise than for the purpose of concealing the origin of such
articles and in such manner that any mark contemplated by this
part would necessarily be obliterated, destroyed, or permanently
concealed are excepted from marking. This provision is not
applicable since the only processing that is done is by the
dealer, not the importer. Moreover, such processing would not
necessarily obliterate marking on the handles. Finally, the 19
CFR 134.32(h) exception does not apply since it requires that the
ultimate purchaser must necessarily know the country of origin of
the article by reason of the circumstances of their importation
or by reason of the character of the articles even though they
are not marked to indicate their origin. There is no indication
that the ultimate purchasers here, i.e., the dealers, necessarily
know the country of origin of the handles.
HOLDING:
Refrigerator parts of U.S. origin exported to Mexico merely
for packaging in plastic containers are not considered to be
advanced in value or improved in condition, and would be entitled
to free entry under subheading 9801.00.10, HTSUS, upon compliance
with the documentation requirements of section 10.1, Customs
Regulations (19 CFR 10.1). Such parts also are excepted from
country of origin marking requirements. Door handles to which
end caps are attached may receive an allowance in duty for the cost
or value of the U.S. fabricated components under subheading
9802.00.80, HTSUS, provided the documentation requirements of 19
CFR 10.24 are met. The door handles are considered products of
Mexico for country of origin marking purposes and, therefore,
they (or the polyethylene film in which they are packaged) must
be marked accordingly.
Sincerely,
John Durant
Director, Commercial
Rulings Division