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HQ 556808

December 2, 1992

CLA-2 CO:R:C:S 556808 RAH


TARIFF NO.: 9802.00.80

Mr. Joseph A. Black
Sandler, Travis & Rosenberg, P.A.
5200 Blue Lagoon Drive
Miami, FL 33126-2022

RE: Products of the United States; subheading 9802.00.80, HTSUS; Assembly; Zipper; 19 CFR 10.12(e)

Dear Mr. Black:

This is in response to your letter of June 23, 1992, requesting a ruling on behalf of RAM, Fasteners of America of El Paso, Texas, regarding whether zippers will qualify as a product of the United States for purposes of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS).


You state that the zippers are made from the following components, which are imported from Mexico into the United States:

1. Zipper chain (imported in 200 yard rolls);

2. A brass slider;

3. A brass bottom stop (imported in coils weighing approximately seven pounds from which approximately 21,000 stops can be produced);

4. Brass top stops (imported in seven pound coils).

In the United States, the zipper chain is cut to length and then gapped by removing teeth from both the bottom and the top. The slider is mounted on the chain and brass stops are attached to the top and bottom of the chain to prevent the slider from being removed from the completed zipper. The latter operation consists of cutting the stops to the appropriate length and crimping them on the zipper chain where the teeth have been removed.

You state that two machine operators are required if an automatic machine is used in making the zippers, while the less sophisticated machine requires three operators.

Additionally, you submit the following cost breakdown for assembling a seven inch zipper:

Zipper Chain .05625
Zipper Slider .0225
Stop Wire .0008
Capital .0025
Labor .0125
Overhead .015

The total cost of production of the zipper is $0.10955 which includes $0.03 U.S. value-added. The U.S. value-added represents 27.4 percent of the total cost.

You contend that the zippers in question should be considered products of the United States because the foreign components are substantially transformed into a new and different article of commerce with a new name, character and use, as a result of the processing in the United States.

We infer from your submission that the completed zippers will be exported to a foreign country for assembly into other articles, which will then be returned to the U.S. and entered under subheading 9802.00.80, HTSUS.


Whether foreign-made zipper components made into completed zippers in the United States are substantially transformed into "products of the United States" for purposes of subheading 9802.00.80, HTSUS.


Subheading 9802.00.80, HTSUS, 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, 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 this tariff provision is subject to duty upon the full cost or value of the imported assembled article, less the cost or value of the U.S. components assembled therein, upon compliance with the documentary requirements of section 10.24, Customs Regulations (19 CFR 10.24).

For purposes of subheading 9802.00.80, HTSUS, a "product of the United States" is an article manufactured within the Customs territory of the U.S. and may consist wholly of U.S. components or materials, of U.S. and foreign components or materials, or wholly of foreign components or materials. If the article consists wholly or partially of foreign components or materials, the manufacturing process must be such that the foreign components or materials have been substantially transformed into a new and different article, or have been merged into a new and different article. Section 10.12(e), Customs Regulations (19 CFR 10.12(e)).

A substantial transformation occurs "when an article emerges from a manufacturing process with a new name, character, or use which differs from that of the original material subjected to the process." The Torrington Company v. United States, 764 F.2d 1563, 1568 (Fed. Cir. 1985).

In the instant case, we find that the assembly of the zipper components into a finished zipper is a relatively minor operation or combining process which leaves the identity of the components intact. Moreover, the essential character of the zipper (i.e., chain and slider) is not substantially changed, nor does it lose its separate identity as a result of the assembly operation in the U.S. Furthermore, we find that the foreign components are already dedicated to use as a zipper prior to their being assembled together. Accordingly, the zipper will not be considered a "product of the United States" and therefore will not be entitled to a duty allowance under subheading 9802.00.80, HTSUS, when returned to the U.S. as part of an article assembled abroad.


Foreign-made zipper components assembled into completed zippers in the U.S. are not considered "products of the United States" for purposes of subheading 9802.00.80, HTSUS, as the components are not substantially transformed into a new and different article of commerce as a result of that processing.


John Durant, Director
Commercial Rulings Division

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