CLA-2 CO:R:C:S 557613 BLS
Lori A. D'Agostino
Goff & Page Company
P.O. Box 9248
Providence, R.I. 02940
RE: Applicability of the partial duty exemption under
subheading 9802.00.80, HTSUS, to flat elastic braid
Dear Ms. D'Agostino:
This is in reference to a letter dated September 30, 1993,
from a former representative of Goff & Page, and other
correspondence, requesting a ruling concerning the tariff treatment
of flat elastic braid to be imported from Mexico. We have received
additional information in connection with the process to be
performed in Mexico from David L. Lavoie, North East Knitting Inc.
(the importer), by letter dated June 16, 1994, and by telephonic
communication. Samples of the materials and the finished braid
have been submitted.
FACTS:
The elastic braid consists of two different materials, i.e.,
a polyester fiber of a thread-like consistency, and rubber thread
made from natural latex. You state that both materials are of
U.S.-origin. The polyester fiber is received from the U.S.
manufacturer wound onto large tubes, approximately 11" in length
and 7" to 10" in diameter. The rubber thread is manufactured in
various gauges ranging from a coarse 22 gauge to a fine 110 gauge,
and shipped to Mexico in boxes.
In Mexico, the rubber thread is fed from beneath the braiding
machine under tension. As this is being done, the small tubes of
polyester yarn travelling on "carriers" are braided around the
thread to hold it in place. When tension is released, elastic
braid is formed. The finished elastic braid is cut to length,
packaged, and returned to the U.S.
ISSUE:
Whether the elastic braid is eligible for the partial duty
exemption under subheading 9802.00.80, Harmonized Tariff Schedule
- 2 -
of the United States (HTSUS), upon importation.
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 subheading 9802.00.80, HTSUS, is subject to
duty upon the full value of the imported assembled article less the
cost or value of the U.S. components, upon compliance with the
documentary requirements of section 10.24, Customs Regulations (19
CFR 10.24).
Section 10.16(a), Customs Regulations (19 CFR 10.16(a)),
provides, in part, that the assembly operations 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
operation. See 19 CFR 10.16(a). However, any significant process,
operation, or treatment whose primary purpose is the fabrication,
completion, or physical or chemical improvement of a component, or
which is not related to the assembly process, precludes the
application of the exemption under subheading 9802.00.80, HTSUS.
We have held that the twisting of yarns on a machine to form
twines is an acceptable assembly operation because it is a method
used to combine or join yarns, which are solid components. See
Headquarters Ruling Letter (HRL) 555128 dated January 9, 1989.
However, we have also held that passing yarn through braiding
machines to produce braided rope and cordage is analagous to
weaving fabrics from spun yarn, and is considered a manufacturing
rather than an assembly process. See HRL 554531 dated May 29,
1987. See also HRL 555128, supra (braiding 3-ply nylon rope into
- 3 -
8-strand plaited rope does not constitute an acceptable assembly
operation); and HRL 556627 dated June 3, 1992 (braiding leather
into belts held not to be an acceptable assembly operation).
In the instant case, the braiding of the rubber and polyester
to form elastic braid is analagous to the production of braided
rope and cordage from yarn, and the braiding of leather into belts.
Therefore, the operation performed in Mexico is considered a
manufacturing process and not an assembly operation within the
contemplation of subheading 9802.00.80, HTSUS.
HOLDING:
Upon return to the U.S., the elastic braid will not be
eligible for an allowance in duty under subheading 9802.00.80,
HTSUS, since the braiding operation performed abroad does not
constitute an acceptable assembly operation under the statute.
Sincerely,
John Durant, Director
Commercial Rulings Division