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HQ 555503

March 15, 1990

CLA-2 CO:R:C:V 555503 KAC


TARIFF NO.: 9802.00.80

Mr. Thomas A. Baker
The Antenna Specialists Company
30500 Bruce Industrial Parkway
Solon, Ohio 44139-3996

RE: Applicability of the duty exemption under subheading 9802.00.80, HTSUS, to dual section, ferrite isolators imported from Mexico

Dear Mr. Baker:

This is in response to your letter of September 20, 1989, to the District Director, Laredo, Texas, requesting a ruling on the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to dual section, ferrite isolators imported from Mexico. Your letter was referred to our office for the preparation of a response. A sample of the product was submitted for our consideration.


The Antenna Specialists Company will be shipping U.S. components to Mexico for assembly into a dual section, ferrite isolator ("isolator"). The isolator is used between an antenna and transmitter/receiver in a fixed location to filter out unwanted receptions. The isolator assembly process is described as three separate operations: the isolator coax subassembly, the board and conductor subassembly, and the isolator final assembly. Except where specifically noted all machining (threading, forming, and drilling) is performed in the U.S.


The following U.S. components are used in the isolator coax subassembly: R-142 B/U coax cable, crimp type "N" male coax connector, crimp flange, tube mount, and heat reactive tube. The foreign subassembly operations are as follows:

1. 10 1/2 inch R-142 B/U coax cables are cut to length; 2. type "N" male coax connector is force-fitted to one end of the coax cable;
3. the flange and mount are soldered and then force fitted to the remaining end of the coax cable; and

4. heat reactive tubing is cut to length, slipped over both ends of the coax cable and then heat is applied to shrink the tube around the coax cable in order to strain relieve cable at points of entry to "N" connector and flange/mount.


The following U.S. components are used in the board and conductor subassembly: printed circuit board, insulating tube, 7/8 inch #18 bare copper wire, and garnet support. The foreign subassembly operations are as follows:

1. both circulators are soldered into position; 2. insulated tube is slipped over cut-to-length bare copper wire; and
3. both ends of bare copper wire are bent into a specific angle to fit appropriate holes in a printed circuit board and soldered into position.


This final assembly process joins the isolator coax sub- assembly, the board and conductor subassembly, and certain additional components together to complete the finished product, the isolator. The following U.S. components are used in the isolator assembly: resistors, load resistors, garnet wafers, ceramic magnets, port block, magnet plates, side cover, end cover, heat-sink spacer, back panel, mounting panel, front panel, heat-sink, AG-58 A/U connector ("N" female), AG-1094/U connector ("BNC" female), solder terminal, split lockwasher, plastic cap, .002 and .004 inch paper spacer (optional during electrical alignment), "invar" pole plate, base, plate covers, adhesive, adhesive accelerator, various size screws (fasteners), isolator coax subassembly, and board and conductor subassembly. The isolator assembly operations are as follows:

1. using the base as a building block, load resistor is force fitted into position and the lower garnet wafers are placed in position into their provided holes; 2. board and conductor subassembly is placed in position into provided holes;
3. upper garnet wafers are placed in position; 4. resistors are placed in position and soldered; 5. remaining load resistor is placed in position and soldered and/or screwed to the assembly;
6. appropriate fasteners are used to hold in place the components described in step numbers 1 through 4; 7. input, output and sampling connectors center conductors soldered to printed circuit board;
8. main heat-sink placed in position;
9. port block, "BNC" connector and UG-88 A/U connector are fastened to heat-sink with appropriate fasteners; 10. isolator coax subassembly placed in position and fastened to heat-sink;
11. side cover, end cover, and front panel positioned and fastened;
12. upper magnets and lower magnets placed in position; 13. "pole-plates" (one invar and one cold-rolled steel) are placed in position over magnets and secured with adhesive and adhesive accelerator;
14. the seven tuning adjustment screws are inserted into the base and invar pole plate;
15. mounting panel is placed into position over lower isolator base; and
16. all appropriate fasteners are inserted into their respective positions and tightened.

The completed isolator must then undergo "electrical alignment" which is a final tuning operation. This operation will be performed either in the U.S. or in Mexico. After the final isolator assembly operations, or after the final tuning operation performed in Mexico, the isolator will be returned to the U.S.


Whether the foreign operations constitute an "assembly", thereby entitling the dual section, ferrite isolator to the partial duty exemption available under HTSUS subheading 9802.00.80 when returned to the U.S.


HTSUS subheading 9802.00.80 provides a partial duty exemption for:

[a]rticles 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, lubrication, 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 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, Customs Regulations (19 CFR 10.24).

Section 10.16(a), Customs Regulations (19 CFR 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.

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. 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, section 10.16(c), Customs Regulations (19 CFR 10.16(c)).

We are persuaded by the documentation and sample provided that all of the U.S. components exported for assembly into the isolators meet the three requirements of HTSUS subheading 9802.00.80 and, therefore, are entitled to duty allowances under this tariff provision. The force fitting, soldering, screwing, use of adhesive, and slipping a tube over wire are considered acceptable assembly operations pursuant to 19 CFR 10.16(a). Moreover, heating the heat reactive tubing to shrink the tube around the coax cable is considered an acceptable assembly operation or operation incidental thereto in view of General Instrument Corporation v. United States, 70 Cust.Ct. 64, C.D. 4408 (1973) (precut lengths of tubular sleeving called "shrink sleeving," assembled abroad with other components to form selenium rectifiers, are entitled to allowances in duty under the precursor provision of HTSUS subheading 9802.00.80). See also, Headquarters Ruling Letter 052076 dated March 3, 1978.

Cutting the cable, wire and tubing to length is considered an operation incidental to the assembly process pursuant to 19 CFR 10.16(b)(6)). The bending of copper wire immediately before it is soldered to the printed circuit board--the last step in the board and conductor subassembly process-- is considered an operation incidental to assembly pursuant to 19 CFR 10.16(b)(5), which allows adjustments in the shape or form of a component to the extent required by the assembly being performed. Finally, the "electrical alignment" process, if performed in Mexico, is considered an operation incidental to the assembly process pursuant to 19 CFR 10.16(b)(7), which states that final calibrations and testing are operations incidental to the assembly process.

The isolators are classifiable as other radio reception parts in HTSUS subheading 8529.90.50, and dutiable at the rate of 5.9% ad valorem. Articles classifiable under this provision are entitled to duty-free treatment under the Generalized System of Preferences, provided the 35% value-content requirement and the other requirements set forth in sections 10.171 through 10.178, Customs Regulations (19 CFR 10.171-10.178), are satisfied.


On the basis of the information and sample provided, it is our opinion that the foreign operations performed on the U.S. components are proper assembly operations or operations incidental to assembly pursuant to HTSUS subheading 9802.00.80. Therefore, an allowance in duty may be made under this tariff provision for the cost or value of all U.S. components upon compliance with the documentary requirements of 19 CFR 10.24. The isolators are classifiable in HTSUS subheading 8529.90.50.


John Durant, Director
Commercial Rulings Division

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