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HQ 555455


September 18, 1989

CLA-2 CO:R:C:V 555455 GRV

CATEGORY: CLASSIFICATION

TARIFF NO.: 9802.00.80

Mr. Raymond D. Kraus
Chief Executive
K.T. Manufacturing
325 W. 3rd Street
Sandwich, Illinois 60548

RE: Applicability of partial duty exemption under HTSUS subhead- ing 9802.00.80 to baby front carriers from Mexico

Dear Mr. Kraus:

This is in response to your letter of July 11, 1989, to our New York Seaport office, requesting a ruling on the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to baby front carriers to be imported from Mexico. Samples of the various components to be exported and the article to be imported were submitted for examination. Your letter was forwarded to this office for a direct reply. Also, your letter of August 28, 1989, containing supplemental informa- tion was considered in this ruling.

FACTS:

You state that some 24 components, all products of the U.S., will be exported to Mexico for assembly into baby front carriers. The components include the following items: already cut-to- length fabric, foam pieces, trim cord, pocket liner, elastic strips, draw strings and webbing; metal snaps and eyelets; plastic cord, loop locks, retainers, rings, snap-hooks, two-inch triglides (a buckle fastener designed to adjust the length of the web straps) and bags; and, thread. These various components will be individually bulk packed, e.g., all cut webbing will be in one box, for export to Mexico. Once abroad, the boxed components will be placed at one of 16 established assembly stations so that the assembly operator requiring the particular component can reach into the box and attach the necessary component to the baby front carrier as it proceeds in assembly-line fashion to become the completed product.

The assembly operations entail: (1) sewing the various fabric, trim cord, pocket liner, elastic strips and webbing components together, which encloses the foam pieces, draw strings, and all plastic components, with the exception of the cord lock and the two-inch triglides; (2) force fitting the metal snaps and eyelets through the fabric; (3) knotting the end of the draw string to keep the adjustable cord lock attached to the draw string; and, (4) inserting the free ends of the webbing through the triglides to create adjustable shoulder straps.

The assembled product is then packaged and returned to the U.S.

ISSUE:

Whether the returned baby front carriers are eligible for the partial duty exemption under HTSUS subheading 9802.00.80.

LAW & ANALYSIS:

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.

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 a duty upon the full value of the imported assembled article, less the cost or value of the U.S. components assembled therein, provided there has been compliance with the documentation requirements of section 10.24, Customs Regulations (19 CFR 10.24).

"Assembly" operations for purposes of HTSUS subheading 9802.00.80 mean the fitting or joining together of fabricated components, such that the components are in a fixed relationship to each other. Acceptable assembly operations are interpreted at section 10.16(a), Customs Regulations (19 CFR 10.16(a)), which specifically enumerates sewing and force fitting as acceptable means of assembly. Components which are not securely joined or fitted together with other components are not eligible for the partial duty exemption. However, this does not operate to dis- qualify those components which meet the requirements of the statute.

In the instant case, an examination of the fully assembled product shows that all of the U.S. components exported will be eligible for the duty exemption available under HTSUS subheading 9802.00.80. All of the components are finished products of the U.S. as exported and are capable of immediately entering into the assembly process to make the imported front baby carriers. Once abroad, 22 of the various components will be sewn or force fitted together so that their respective positions relative to each other are fixed. The sewing and force fitting operations consti- tute acceptable assembly operations as they are specifically enumerated at 19 CFR 10.16(a). Regarding the knotting operation, after the plastic, adjustable cord lock is slid over the draw string, the draw string is knotted to keep the adjustable cord lock securely attached to the draw string. Moreover, inserting the free ends of the webbing thru the dual openings of the triglide component--creating adjustable shoulder straps-- serves to securely attach the triglides to the webbing. We are satis- fied in this case that these latter two operations constitute acceptable methods to join together solid components within the meaning of 19 CFR 10.16(a), as the components concerned are attached and held in a fixed relationship to each other.

As the U.S. components will not lose their physical identi- ties in the assembled article and will not be advanced in value or improved in condition except by assembly operations and opera- tions incidental thereto, the returned front baby carriers will be eligible for the partial duty exemption under HTSUS subhead- ing 9802.00.80.

HOLDING:

On the basis of the described foreign operation and after viewing the samples submitted, the front baby carriers will be eligible for the partial duty exemption under HTSUS subheading 9802.00.80 when returned to the U.S., upon compliance with the documentary requirements of 19 CFR 10.24.

Sincerely,


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