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HQ 554935

April 10, 1989

CLA-2-CO:R:C 554935 RA


TARIFF NO: 9801.00.10, HTSUS, (formerly 800.00, TSUS)

Herbert J. Lynch, Esq.
Sullivan & Lynch, P.C.
156 State Street
Boston, Massachusetts 02109

RE: Classification of U.S.-made articles in a medical kit assembled abroad.

Dear Sir:

This ruling is in response to your letter of February 26, 1988, requesting a clarification and reconsideration of our decision of December 10, 1987 (554829/159777), regarding the constructive segregation of various medical articles imported in a kit packaged in Mexico.


Dialysis kits for home or hospital use contain items made in the U.S., such as syringes, gloves, needles, pads, band-aids, and sponges, and some foreign-made articles, all of which are sent to Mexico and placed in plastic trays, heat sealed, and packaged before they are returned to this country. The articles are fully manufactured and packaged for ultimate use and all have a separate commercial identity. The quantity and identity of each article can be readily ascertained by sampling and from the packing lists or other entry documents.


Can the articles of U.S. origin be returned duty free under the provisions of item 800.00, Tariff Schedules of the United States (TSUS), which has now been replaced by subheading 9801.00.10, Harmonized Tariff Schedule of the United States


Subheading 9801.00.10, HTSUS, copy enclosed, provides that products of the U.S. may be returned without the payment of duty if they have not been advanced in value or improved in condition while abroad. The articles in this case are in the same condition and have the same value as when exported from the U.S. except that they are returned packed in a tray with other domestic and foreign articles in the dialysis kit. In our letter of December 10, 1987, we indicated that if foreign-made articles are packaged with domestic-made articles, there can be no constructive segregation of commingled articles for separate tariff treatment in an imported tariff entity. As you now state that the quantity and identity of each article can be readily ascertained by sampling or from the entry documents, the domestic-made articles in this case cannot be treated as commingled. However, if the dialysis kit in its imported condition is considered to be a single tariff entity, it cannot be constructively separated into its constituent parts so as to allow free entry of the U.S.-made portion under item 800.00, TSUS.

In a ruling dated April 9, 1984 (073615), we stated:

While the Tariff Schedules of the United States (TSUS), contain several specific provisions for kits, kits not qualifying under those provisions are generally not dutiable as entireties, and each item in the kit is separately dutiable or duty-free. However, any kit which, in effect, is an unfinished or unassembled version of the finished article made from the kit, or any aggregation of articles within the kit constituting an unfinished article specifically provided for in the TSUS, must be classified as an entirety and duty must be assessed at the rate applicable to the entirety in accordance with the rule of construction in General Headnote 10(b), TSUS. When merchandise is classifiable as an entirety under the provision, the separate parts are not separately dutiable and are not subject to a separate exemption from duty when the exemption is a partial exemption based on the rate applicable to the article as a separate dutiable entity. The exemption in item 806.20, TSUS, for articles of American origin returned after repairs or alterations
abroad is such an exemption under Headnote 2(c), Subpart B, Part 1, Schedule 8, TSUS, and, therefore, is not applicable to an article dutiable as an entirety with other articles although the exemption would be applicable to the article when imported as a separate tariff entity.

In the same ruling we also held that any articles in the kits which are of U.S. origin and which are not classifiable as entireties with other articles in the kits are entitled to an exemption from duty under the provision for returned American goods which have not been advanced in value or improved in condition while abroad.

In United States v. John Wanamaker, 16 Cust. Appls. 548, T.D. 43266 (1929), certain pieces of canvas and yarns imported in an embroidery kit were held to be materials rather than parts of an entirety and were separately dutiable. It is clear that the fact that items are imported in a kit is not, in itself, sufficient cause to preclude their classification as separate entities under the TSUS if their relationship with other items in the kit has not transformed them into parts of an entirety. Also, the fact that the kit may be made up of foreign-made and domestic-made articles should not be cause for denying free entry of the domestic-made articles as American goods returned if they have retained their status as individual entities. United States v. John V. Carr and Son, Inc., 61 CCPA 52, C.A.D. 1118 (1974).

However, under the HTSUS, the dutiable status of items of U.S. origin in a kit does not depend upon whether they retain their individual identities as separate entities under the doctrine of entireties. Rather, the question is whether the merchandise qualifies as "goods put up in sets" under General Rule of Interpretation 3(b), HTSUS. If so, the classification is determined by the material or item of the set which gives the set its essential character. Therefore, if the material or item which gives the set its essential character is entitled to free entry under subheading 9801.00.10, HTSUS, then the entire set is free of duty under this tariff provision. However, if such material or item is not entitled to classification under subheading 9801.00.10, HTSUS, then free entry under this provision for the set or any part thereof is precluded.

With respect to the dialysis kits under consideration here, you advise that, depending on the type and location of the dialysis to be performed, the contents of the kits may vary. For this reason and because insufficient descriptive information has been provided concerning the items to be included in a typical kit, we are unable to determine which item gives the kit its essential character.


Articles of U.S. origin imported prior to January 1, 1989, in a dialysis kit which may also contain foreign-made articles, may be accorded free entry under the provision of item 800.00, TSUS, if they have not been advanced in value or improved in condition while abroad and retain their individual identity apart from other items in the kit, upon compliance with section 10.1, Customs Regulations (19 CFR 10.1). Our letter of December 10, 1987, is modified accordingly. Under the HTSUS, the classification of the imported kit in a particular case would be determined by the classification of the material or component which gives the set its essential character. Therefore, this factor is determinative of the issue of whether the imported kits would be entitled to free entry under subheading 9801.00.10, HTSUS.


John Durant, Director

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