CLA-2-98:OT:RR:NC:N4:447
Ms. Mary E. Gilmer, Esq.
W.L. Gore & Associates, Inc.
551 Paper Mill Road
P.O. Box 9206
Newark, DE 19711
RE: U.S. articles assembled abroad.
Dear Ms. Gilmer: In your letter dated October 15, 2010 you requested a ruling regarding the applicability of subheading 9802.00.8068, Harmonized Tariff Schedule of the United States (HTSUS), to U.S. made “seam-tape” used in the assembly and importation of Chinese footwear.
You submitted two footwear samples, a “bootie” liner and an “athletic-type” running shoe, both of which illustrate the applicability of the seam-tape. You state in your letter and confirm in email correspondence with our office that your request is limited to the “9802” eligibility of the seam-tape contained in the footwear and not with the classification of the footwear itself.
You state that the U.S. produced seam-tape is manufactured by laminating a plastic membrane and a polyurethane adhesive layer to a nylon material. It is then slit into 7/8 inch strips and put onto individual rolls, at which point it is exported in a condition ready for assembly without further fabrication. It is then exported to overseas manufacturers, mainly China, “to seal the seam of liners or “booties” that ensure the waterproof, breathable character of footwear carrying the GORE-TEX® trademark.” There are no incidental operations other than placing the roll onto the “pay-off,” heating the tape to melt the adhesive, pressing the tape onto the seam and cutting it to length. The seam-tape retains its form and shape in the footwear.
Subheading 9802.00.80, HTSUS, provides a partial duty exemption for:
Articles, except goods of heading 9802.00.90, 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 HTSUS subheading 9802.00.80 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. Section 10.16(a), Customs Regulations (19 C.F.R. §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, and may be preceded, accompanied, or followed by operations incidental to the assembly as illustrated in paragraph (b) of this section. 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. An example of an operation which is incidental to the assembly process is the cutting to length of wire, thread, tape, foil, and similar products exported in continuous length. 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 HTSUS subheading 9802.00.80 to that component. See, 19 C.F.R. §10.16(c). We agree with your contention that the U.S. manufactured seam-tape incorporated into the finished Chinese footwear is exported in a condition ready for assembly without further fabrication. It has not lost its physical identity by change in form, shape or otherwise. The procedure performed in China consists merely of sealing various components together and is therefore considered an assembly operation for purposes of subheading 9802.00.80. Thus, an allowance in duty may be made for the value of the U.S.-made seam-tape using 9802.00.80, HTSUS, upon compliance with the document requirements in 19 CFR 10.11 – 10.24.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of this ruling letter or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding this ruling, contact National Import Specialist, Stacey Kalkines at (646) 733-3042. Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division