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HQ 555784

February 20, 1991

CLA-2 CO:R:C:S 555784 LS


TARIFF NO.: 9802.00.80

Mr. Michael J. Spain
Sonnenberg, Anderson,
O'Donnell & Rodriguez
200 West Adams Street
Suite 2625
Chicago, Illinois 60606

RE: Applicability of subheading 9802.00.80, HTSUS, to gold and pearl bracelets formed by gluing, soldering, insertion; cutting to length. Assembly; incidental operations

Dear Mr. Spain:

This is in response to your letter dated October 9, 1990, requesting a ruling, on behalf of Imperial World, Inc., on the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to gold and pearl bracelets. Your letter, which was addressed to the Area Director of Customs, New York Seaport, was forwarded to us for a reply. An advertising brochure depicting the bracelets was submitted.


Imperial World, Inc. plans to ship gold chains, posts, and clasps of U.S. origin, and cultured pearls, of Japanese origin, to Hong Kong, where the following operations will take place. The chains, which are shipped from the U.S. in reels, are cut to appropriate lengths. The posts will be shipped either precut or as straight bars to be cut to length in Hong Kong. A hole is drilled into the opposite sides of each pearl. The posts are then inserted through the holes of each pearl and held in place by glue. A strand of gold chain is then laid on each side of a row of pearls. The posts are soldered to the two gold chains. Lastly, the two parts of the clasp are attached to either end of the chain by means of soldering. During a telephone conversation with a member of my staff, you advised that the posts serve to hold the pearls along the length of the chain and keep them evenly spaced. You claim that an allowance in duty should be permitted under subheading 9802.00.80, HTSUS, for the cost or value of the gold chains, posts, and clasps.


Whether the gold and pearl bracelets will qualify for the partial duty exemption under subheading 9802.00.80, HTSUS, when imported into the U.S.


Subheading 9802.00.80, HTSUS, provides a partial exemption from duty for articles assembled abroad in whole or in part of U.S. fabricated components, provided the components (a) are exported in condition ready for assembly without further fabrication; (b) do not lose their physical identity by change in form, shape or otherwise, and; (c) are not 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 subheading 9802.00.80, HTSUS, must be satisfied before a component may receive a duty allowance. An article entered under subheading 9802.00.80, HTSUS, 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)

According to section 10.16(a), Customs Regulations (19 CFR 10.16(a)), the assembly operations performed abroad may consist of any method used to join or fit together solid components. Gluing and soldering are specifically enumerated in this regulation as acceptable means of assembly. Thus, the two steps of soldering the posts to the gold chains, and the clasps to the chains, constitute assembly operations within the meaning of subheading 9802.00.80, HTSUS. In addition, the insertion of the posts through the holes of the pearls and the use of glue to hold them in place are acceptable assembly operations.

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 operation. See 19 CFR 10.16(a). The process of cutting to length wire which is exported in continuous length is described in 19 CFR 10.16(b) as an example of an operation considered incidental to the assembly process. Therefore, the two steps of cutting the gold chains to appropriate lengths from reels, and cutting the posts to length from exported straight bars, are operations incidental to the assembly process. We need not discuss whether drilling a hole into the opposite sides of each pearl constitutes an operation incidental to the assembly
process because the pearls, being of foreign origin, will not be eligible for an allowance in duty under subheading 9802.00.80, HTSUS.


The gold and pearl bracelets will be eligible for the partial duty exemption under subheading 9802.00.80, HTSUS, when returned to the U.S., upon compliance with the documentary requirements of 19 CFR 10.24. The processes performed in Hong Hong on the chains, posts, and clasps are considered acceptable assembly operations or operations incidental to the assembly process. Therefore, an allowance in duty is permitted for the cost or value of these three U.S. components. No allowance may be made for the cost or value of the pearls which are of foreign origin.


John Durant, Director
Commercial Rulings Division

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