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HQ 555221

October 24, 1989

CLA-2 CO:R:C:V 555221 GRV


TARIFF NO.: 9802.00.80

Mr. Richard G. Seley
Rudolph Miles & Sons, Inc.
Customhouse Brokers
4950 Gateway East
P.O. Box 144
El Paso, Texas 79942

RE: Applicability of partial duty exemption under HTSUS subhead- ing 9802.00.80 to "Dog Floss Tug & Chew Toy" from Mexico

Dear Mr. Seley:

This is in response to your letters of December 5, 1988, and August 29, 1989, on behalf of Pacific Coast Pet, requesting a ruling on the applicability of item 807.00, Tariff Schedules of the United States (TSUS) (now subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS)), to a product called "Dog Floss Tug & Chew Toy" to be imported from Mexico. Samples of the merchandise to be imported were submitted for examination.


You state that partial cones (spools) of U.S. origin thread (remnants from the manufacture of sheet and shirt material) will be purchased in the U.S. and sent to Mexico to be made into knotted rope toys of various lengths for dogs. In Mexico, the thread remnants will first be processed into a thread skein by winding the threads from many cones simultaneously onto a drum having a circumference of approximately 150 inches. (Skeins will vary in diameter so that when three of the same size skeins are twisted together the finished products will have diameters rang- ing from 5/8 inch to 1 1/4 inches). Once the required diameter of the skein is reached, the thread is cut from the cones and the skein is cut and removed from the winding drum. The 150 inch long skein is then hand-twisted. When three skeins having the same diameter are made, they are hand-twisted together into a rope configuration and knots are machine-tied every four to five inches along the length of the 150 inch rope. Individual pro- ducts will then be cut from the knotted rope in lengths that include two or more knots. The products will then be exported to the U.S.

Whether the winding, cutting, twisting and knotting opera- tions performed abroad on the exported thread components consti- tute acceptable "assembly" or "incidental operations," thereby rendering the knotted rope toys eligible for the partial duty exemption under HTSUS subheading 9802.00.80.


HTSUS subheading 9802.00.80 provides a partial duty exemp- tion for:

[a]rticles assembled abroad in whole or in part of fab- ricated 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.

An article entered under HTSUS subheading 9802.00.80 is subject to duty upon the full value of the imported assembled article less the cost or value of such U.S. components, upon compliance with the documentary requirements of section 10.24 of the Customs Regulations (19 CFR 10.24).

Section 10.14(a), Customs Regulations (19 CFR 10.14(a)), states, in part, that:

[t]he components must be in condition ready for assembly without further fabrication at the time of their exporta- tion from the United States to qualify for the exemption. Components will not lose their entitlement to the exemption by being subjected to operations incidental to the assembly either before, during, or after their assembly with other components.

Operations incidental to the assembly process are not con- sidered further fabrication, as they are of a minor nature and cannot always be provided for in advance of the assembly opera- tion. Examples of operations considered incidental to the assem- bly process are delineated at section 10.16(b), Customs Regula- tions (19 CFR 10.16(b)), which specifically enumerates cutting to length of finished components exported in continuous lengths. See also, United States v. Mast Industries, Inc., 515 F.Supp. 43, 1 CIT 188, aff'd, 69 CCPA 47, 668 F.2d 501 (1981) (establishing criteria to be considered in determining whether operations are incidental to assembly).

Foreign despooling and winding operations have been consid- ered by the courts within the context of TSUS item 807.00 and been found to constitute assembly steps rather than a "further fabrication" within the meaning of that tariff provision. See, General Instrument Corporation v. United States, 61 CCPA 86, C.A.D. 1128, 499 F.2d 1318, 1320 (1974), rev'g, 70 Cust.Ct. 151, C.D. 4421, 359 F.Supp. 1390 (1973), and General Instrument Cor- poration v. United States, 72 Cust.Ct. 86, 91, C.D. 4507 (1974), appeal dismissed, 62 CCPA 109 (1974) (both involving wire exported on spools and despooled onto winding machines). In Headquarters Ruling Letter (HRL) 555128 (January 9, 1989), we determined that the twisting of 3-ply nylon rope yarn consti- tuted an acceptable assembly of the three nylon strands.

In this case, the description of the foreign assembly opera- tions shows that the Dog Floss Tug & Chew Toy to be imported will be eligible for the partial duty exemption available under HTSUS subheading 9802.00.80. The U.S. thread remnants are exported on cones and despooled onto a winding machine. This operation con- stitutes an acceptable assembly operation for purposes of HTSUS subheading 9802.00.80, as held in the above-cited cases. The resultant skeins of wound thread are then cut from the spools and the drum. These multiple cutting operations constitute acceptable operations incidental to the assembly process under 19 CFR 10.16(b)(6), as the cuttings are of a minor nature and could not be performed prior to the winding operation. Individ- ual skeins are twisted and then three skeins are twisted together into a rope configuration, which we have previously held consti- tutes an acceptable assembly operation. HRL 555128. Next, the rope is machine-knotted at uniform intervals. The knotting operation is necessary to the assembly of the finished article as it keeps the twisted skeins from unraveling, is related to the assembly and logically performed during the assembly process (as it allows the final product to be severed from the continuous length), and appears to be of a minor nature when compared to the overall assembly operation. These are findings which conform to the criteria established in the Mast decision for determining whether operations are incidental to assembly. Accordingly, we believe that the knotting operation in this case constitutes an acceptable incidental operation under 19 CFR 10.16(b). Lastly, finished products are cut from the knotted rope toy in variable lengths. This cutting to length operation is also considered incidental to the assembly process under 19 CFR 10.16(b) for the reasons previously stated.

On the basis of the information presented and after viewing the samples submitted, it is our opinion that the winding and twisting operations constitute acceptable "assembly" operations, and that the cutting to length and knotting operations consti- tute acceptable "incidental operations," within the meaning of the statute. Accordingly, the "Dog Floss Tug & Chew Toys" will be eligible for the partial duty exemption under HTSUS subhead- ing 9802.00.80 when imported into the U.S., upon compliance with the documentary requirements of 19 CFR 10.24.


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