CLA-2-98:RR:NC:347 B83541
Ms. Eleanore Kelly-Kobayashi
Rode & Qualey
Attorneys At Law
295 Madison Avenue
New York, NY 10017
RE: U.S. articles assembled abroad.
Dear Ms. Kelly-Kobayashi:
In your letter dated March 24, 1997, you requested a ruling on
behalf of your client, Pagoda Trading Company, regarding the
applicability of subheading 9802.00.8065, Harmonized Tariff
Schedule of the United States (HTS), to U.S. heels assembled and
imported in Brazilian footwear.
You state that the United States origin component parts for
the "energyheel", which was designed and patented by a U.S.
company, are exported to Brazil where they are assembled and
combined with other foreign components to create footwear. The
"energyheel" works by absorbing forces to the heel when walking,
thereby reducing fatigue to the wearer. The heel is simple in
construction and has the desirable feature of permitting
replacement of the worn lift portion without the need for
discarding the entire heel construction. The United States
fabricated components which are sent to a factory in Brazil are
retainer, end cap, elastomer, spacer, nylon washer, plunger,
plunger sleeve and guide pin retainer.
You describe the sequence of operations in the assembly of the
"energyheel" as follows:
(1) the heel is molded with the plunger sleeve inserted into high impact polystyrene;
(2) the alignment of the plunger sleeve and hole in the bottom
of the heel is checked;
(3) the guide pin retainer is inserted into the bottom of the
heel;
(4) the alignment of the guide pin retainer and plunger
sleeve is checked;
(5) the plunger is assembled with the elastomer;
(6) the plunger and elastomer are inserted into the plunger
sleeve in the bottom of the heel;
(7) the spacer is inserted into the top of the heel;
(8) the end cap is inserted on top of the spacer;
(9) the retainer is inserted on top of the end cap;
(10) the spacer, end cap and retainer are pressed into the
top of the heel by machine;
(11) the excess length of the plunger is trimmed to a
preset standard;
(12) the height of the plunger is measured against the
standard;
(13) the heels are then packed and sent for manufacture into
footwear.
At another factory, adhesive is applied to the underside of the
top lift and the top lift is attached to the heel with a press
machine. You state that the top lift is received by the factory
from the United States for attachment to the heel. In addition,
Brazilian heel covers are glued to the heel and a polyurethane
finish is applied to the heel. The heel is then combined with the
upper and other components to create the finished footwear which is
exported to the United States.
It is your contention that the processes performed in Brazil
constitute an assembly process and the value of the United States
fabricated components used in the assembly of the "energyheel" is
deductible from the value of the footwear under subheading
9802.00.8065.
Subheading 9802.00.80 (HTS), provides that 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 are subject to
a duty upon the full value of the imported article, less the cost
or value of such products of the United States.
We agree with your contention that the United States
fabricated components incorporated into the finished Brazilian
footwear are exported in a condition ready for assembly without
further fabrication. They have not lost their physical identity by
change in form, shape or otherwise. The procedures performed in
Brazil consist of joining and fitting various components together
and are therefore considered assembly operations for purposes of
subheading 9802.00.80.
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, Richard Foley at
(212) 466-5890.
Sincerely,
Paul K. Schwartz
Chief, Textiles & Apparel Branch
National Commodity
Specialist Division