OT:RR:CTF:VS H242614 SEK
Karia Herrera, Compliance Manager
R.L. Jones Customhouse Brokers
8830 Siempre Viva Rd., Suite 100
San Diego, CA 92154
RE: Eligibility of wooden-framed glass mirror for preferential tariff treatment pursuant to subheading 9802.00.50
Dear Ms. Herrera:
This is in response to your March 11, 2013 request, forwarded to us by our New York office, on behalf of your client, RSI Home Products, Inc. (“RSI”), for a binding ruling on whether certain imported wooden framed mirrors are eligible for preferential tariff treatment pursuant to subheading 9802.00.50, Harmonized Tariff Schedule of the United States (“HTSUS”).
FACTS:
RSI is a designer and manufacturer of kitchen cabinets, bath vanities, and other home organization units. RSI has various manufacturing facilities throughout the United States and Mexico. RSI proposes to import unframed glass mirrors from China and pay duty upon importation. RSI will then export the mirrors and logs of raw wood to Mexico. In Mexico, the raw wood will be cut, sanded, treated, and painted and then used to frame the mirrors. The final product will be shipped back to the United States.
ISSUE:
Whether the imported wooden framed mirrors are eligible for preferential tariff treatment pursuant to subheading 9802.00.50, HTSUS.
LAW AND ANALYSIS:
Subheading 9802.00.50, HTSUS, provides a partial or complete duty exemption for articles exported from and returned to the United States after having been advanced in value or improved in condition abroad by repairs or alterations, provided the documentary requirements of section 181.64 (for articles returned from Canada or Mexico) or section 10.8 (for articles returned from any other country), Customs and Border Protection (“CBP”) Regulations (19 CFR §§ 181.64 and 10.8), are satisfied. Section 181.64(a), CBP Regulations, states that:
‘repairs or alterations’ means restoration, addition, renovation, redyeing, cleaning, resterilizing, or other treatment which does not destroy the essential characteristics of, or create a new or commercially different good from, the good exported from the United States.
However, in circumstances where the operations abroad destroy the identity of the exported article or create a new or commercially different article, entitlement to subheading 9802.00.50, HTSUS, is precluded. See A.F. Burstrom v. United States, 44 CCPA 27, C.A.D. 631 (1956), aff’d C.D. 1752, 36 Cust. Ct. 46 (1956); Guardian Industries Corporation v. United States; 3 CIT 9 (1982). Additionally, entitlement to this tariff treatment is not available where the exported articles are incomplete for their intended purposes prior to their foreign processing and the foreign processing is a necessary step in the preparation or manufacture of the finished articles. Dolliff & Company, Inc. v. United States, 455 F. Supp. 618 (CIT 1978), aff’d, 599 F.2d 1015 (Fed. Cir. 1979).
At issue in Guardian Industries was the question of whether U.S.-produced annealed glass subjected to a tempering process in Canada to create sliding glass patio doors qualified as an “alteration” under item 806.20, TSUS (the precursor to subheading 9802.00.50). The court noted that glass must be tempered (i.e. strengthened) for practical safety use reasons and to conform to U.S. federal regulations before it could be marketed for use in sliding glass patio doors. The court concluded that the tempering process was not an alteration because the exported raw annealed glass was not a completed article and “completely unsuitable for their intended use.”
In Dolliff & Company, Inc. v. United States, 455 F. Supp. 618 (CIT 1978), aff’d, 599 F.2d 1015 (Fed. Cir. 1979), the issue presented was whether certain U.S.-origin Dacron polyester fabrics which were exported to Canada as griege goods for heat setting, chemical scouring, dyeing and treating with chemicals, were eligible for the partial duty exemption under item 806.20, TSUS, when returned to the U.S. The court found that the processing steps performed on the exported griege goods were undertaken to produce finished fabric and could not be considered as alterations. The court stated that:
…repairs or alterations are made to completed articles and do not include intermediate processing operations, which are performed as a matter of course in the preparation or manufacture of finished articles.
In Royal Bead Novelty Co. v. United States, 342 F.Supp. 1394 (Cust. Ct. 1972), uncoated glass beads were exported so that they could be half-coated with Aurora Borealis finish to impart a rainbow-like luster to the half-coated beads. The court found that the identity of the beads was not lost or destroyed in the coating process and no new article was created. Moreover, there was no change in the beads’ size, shape, or manner of use in making articles or jewelry (evidence was presented which indicated that both uncoated and half-coated beads were used interchangeably). Accordingly, the court held that the application of the finish constituted an alteration.
With regard to the imported mirrors, we note that the mirrors are finished articles when they are sent to Mexico to be framed. The processing in Mexico does not destroy the identity of the exported mirrors, but instead imparts a new feature to a finished product. The framing in Mexico does not significantly change the quality, character, or performance characteristics of the mirrors. See, e.g., H026901, dated April 17, 2009 (ruling that coating putter heads in black nickel, painting with decorative lines, and adding a logo did not change the quality of or add a significant characteristic to the putter heads). We find that the mirrors are finished for their intended use at the time they are exported for Mexico, and thus the framing constitutes an alteration within the meaning of subheading 9802.00.50, HTSUS.
Wooden bedroom furniture from China is subject to Antidumping Duty Order A-570-890. See, Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Wooden Bedroom Furniture From the People’s Republic of China, 70 Fed. Reg. 329 (Jan. 4, 2005). However, since the articles at issue do not qualify as wooden bedroom furniture when they are imported from China, and there is no antidumping duty order on wooden furniture imported from Mexico, the articles at issue are not subject to anti-dumping duties. We note, however, that written decisions regarding the scope of AD/CVD orders are issued by the Import Administration in the Department of Commerce and are separate from tariff classification and origin rulings issued by Customs and Border Protection.
HOLDING:
We find that the imported wooden framed mirrors, altered as described above in Mexico, are eligible for preferential tariff treatment pursuant to subheading 9802.00.50, HTSUS, provided that the documentation requirements of 19 CFR § 181.64 are met.
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 CBP officer handing the transaction.
Sincerely,
Monika R. Brenner, Chief
Valuation & Special Programs Branch