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HQ 556920

January 7, 1993

CLA-2 CO:R:C:S 556920 MLR


TARIFF NO.: 9802.00.80

Mr. Robert Noell
Cain Customs Brokers Inc.
6620 S. 36th - Bldg. I
McAllen, TX 78503

RE: Applicability of partial duty exemption under HTSUS subheading 9802.00.80 to electrical harnesses; slipping; crimping; molding; snapping; testing; Sigma; C.J. Tower

Dear Mr. Noell:

This is in reference to your letter of September 7, 1992, on behalf of NETP, Inc. (located at 2080 Lockport Road, Niagara Falls, New York 14304), requesting a ruling regarding the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to electrical harnesses. Samples of all components, except the black molding compound, were submitted with your request.


NETP plans to import electrical cable systems from Mexico at Hidalgo, Texas. The electrical cable systems are used to control automatic brake systems for automobiles. An electrical harness, a subassembly of the electrical cable system, consists of the following components:

Part Name Part Number

Terminated red wire 1BH-001-01
Terminated brown wire 1BH-002-01
Speed sensor with two blue wires F02-00-D14 molded together
Seals (2) D21-00-019
Terminals (2) T02-28-002
Black molding compound K01-37-M02
Connector C06-21-001
Secondary lock C00-00-024
Convoluted tubing S66-10-225
Tie wraps (3) Z12-00-003

All components are manufactured in the United States except the speed sensor (which arrives subassembled from Hungary) and the convoluted tubing.

The assembly process of the electrical harnesses is conducted at six stations. First, the green seals are slipped over the non-terminated ends of the blue wires of the speed sensor subassembly. Second, the speed sensor with the seals from station #1 is placed in a terminal crimping machine where the blue wires are terminated automatically with the terminal components. Third, the blue, red and brown wires are placed into a fixture, and an insert molding machine molds .007 kilograms of black molding compound into a plastic strain relief grommet around the wires approximately one inch from the unterminated ends of the brown and red wires and one inch from the sensor end of the blue wires. Fourth, the terminated ends of the blue wires are plugged into the connector, and they are twisted 25 times by a wire winder machine. The red and brown wires are then plugged into the connector and the secondary lock is snapped into the back of the connector. At the fifth station, the convoluted tubing is spread over the wires and three tie wraps are closed over the convoluted tubing. The tie wrap is trimmed of excess material by a plastic cutter. Lastly, the completed cable assembly is visually and electronically tested (speed sensor inductance test). The electrical harness is then packed for shipment to the United States.


Whether the U.S. components in the electrical harnesses will qualify for the duty exemption under HTSUS subheading 9802.00.80, when imported into the United States.


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).

Section 10.14(a), Customs Regulations {19 CFR 10.14(a)}, states in part that:

[t]he components must be in condition ready for assembly without further fabrication at the time of their exportation from the United States to qualify for the exemption. Components will not lose their entitlement to the exemption by being subjected to operations incidental to the assembly either before, during, or after their assembly with other components.

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, lamination, 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. See 19 CFR 10.16(a). 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 subheading 9802.00.80, HTSUS, to that component. See 19 CFR 10.16(c).

The operations of slipping the seals over the wires, crimping terminals on the wires, plugging the terminated ends into the connector, twisting the wires, snapping the secondary lock into the connector, spreading the convoluted tubing over the wires, and closing the tie wraps over the convoluted tubing are considered acceptable assembly operations pursuant to 19 CFR 10.16(a) for purposes of subheading 9802.00.80, HTSUS. Trimming the tie wraps of excess material after they are closed over the convoluted tubing is considered an acceptable operation incidental to assembly pursuant to 19 CFR 10.16(b)(4), which states that trimming, filing, or cutting off of small amounts of excess materials is an acceptable incidental operation. Conducting a speed sensor inductance test is considered an acceptable incidental operation pursuant to 19 CFR 10.16(b)(7), which states that final calibration and testing are considered operations incidental to assembly.

However, no allowance in duty may be made under subheading 9802.00.80, HTSUS, for the cost or value of the black molding compound as it is not exported from the United States in condition ready for assembly without further fabrication as required by clause (a) of the statute. In Sigma Instruments, Inc. v. United States, 5 CIT 90, 565 F. Supp. 1036 (1983), aff'd, 724 F.2d 930 (Fed. Cir. 1984), U.S. terminal pins were incorporated into header assemblies by a transfer molding operation in Mexico. A molding compound, exported to Mexico in rope form, was heated and transformed into a viscous state before being joined to the terminal pins. At the completion of the transfer molding operation, the molding compound had substantially assumed a definitive solidification, size, and shape. Through this process the terminal pins became permanently fixed in their designed configuration and spacing so that they could perform their intended function as electrical relays. The court, relying upon C.J. Tower & Sons of Buffalo, Inc. v. United States, 62 Cust. Ct. 643, C.D. 3840, 304 F. Supp. 1187 (1969), found that the transfer molding operation constituted a permissible assembly within the purview of subheading 9802.00.80, HTSUS, and that Customs should have granted an allowance in duty for the terminal pins. (In C.J. Tower, an extrusion process whereby foreign polyethylene was made from pellets in liquid form of high viscosity and was joined with sheets of U.S. polyester was held to be an acceptable assembly since the polyethylene became a solid upon completion of the assembly process.)

We therefore conclude that the process of placing the blue, red and brown wires into a fixture, and molding the black molding compound into a plastic strain relief grommet constitutes an acceptable assembly operation for purposes of subheading 9802.00.80, HTSUS, and that allowances in duty may be made for the cost or value of all components of U.S. origin, except the black molding compound.


On the basis of the information and samples submitted, we conclude that the U.S. components in the electrical harnesses, except the black molding compound, do not lose their physical identity in the assembly operation, and are not advanced in value or improved in condition except by assembly operations and operations incidental thereto. Therefore, allowances in duty may be made under subheading 9802.00.80, HTSUS, for the cost or value of the U.S. fabricated components incorporated into the electrical harnesses, except the black molding compound, upon return of the electrical cable systems to the United States, provided the documentary requirements of 19 CFR 10.24 are satisfied.


John Durant, Director

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