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HQ 557618

December 8, 1993

CLA-2 CO:R:C:S 557618 MLR


TARIFF NO.: 9802.00.80

Ms. Karen A. Soukiasian
David Dobbs Enterprises/Menu Designs, Inc. 4600 U.S. 1 North
St. Augustine, Florida 32095

RE: Applicability of partial duty exemption under HTSUS subheading 9802.00.80 and country of origin marking requirements for menu covers; sewing; trimming

Dear Ms. Soukiasian:

This is in response to your letter of October 6, 1993, requesting a ruling regarding the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to menu covers. Samples of the menu covers at various stages of production were submitted with your request.


You state that you are planning to produce clear stitched menu covers in Mexico in two styles: either a "double single" (three panel cover), or a "double double" (four panel cover). You verified in a telephone conversation with a member of my staff that all of the materials used to produce these covers (i.e., rigid vinyl, tape, thread, and metal brackets) will be of U.S.-origin. The machines that are necessary to produce the menu covers will also be shipped from the U.S. The vinyl will be cut in the U.S. Basically, the process in Mexico consists of stitching tape to the edges of the cut vinyl sheets to create a panel. Small corners are trimmed from each vinyl sheet so that metal brackets may be pressed on each corner. The requisite number of panels needed for each design of menu is then stitched together. The menu covers are then cleaned, packed, and shipped to the U.S.


I. Whether the menu covers will qualify for the partial duty exemption available under subheading 9802.00.80, HTSUS, when returned to the U.S.

II. What is the proper country of origin marking for the menu covers?


I. Application 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).

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).

In the instant case, the operations of stitching the tape to the edges of the vinyl, stitching the panels together, and pressing the metal brackets onto the corners of the vinyl sheet are considered acceptable assembly operations pursuant to 19 CFR 10.16(a), because two solid components are being joined (i.e., stitched or pressed) together. Trimming the corners from the vinyl sheets and cleaning the covers are considered incidental operations. Packing the telephone handset covers is permissible pursuant to 19 CFR 10.16(f).

II. Country of Origin Marking

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that unless excepted, every article of foreign origin imported in the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. 1304 was that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods are the product. Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

Among the exceptions to country of origin marking is 19 U.S.C. 1304(a)(3)(D), also provided for in section 134.32(d), Customs Regulations (19 CFR 134.32(d)). That section provides that articles for which the marking of their containers will reasonably indicate the country of origin of the articles may be excepted from country of origin marking. However, for the exception to apply Customs must be satisfied that the articles will reach the "ultimate purchaser" in the original, properly marked containers in which the articles were imported. Section 134.1(d), Customs Regulations (19 CFR 134.1(d)), defines the "ultimate purchaser" as generally the last person in the U.S. who will receive the article in the form in which it was imported.

In HQ 734524 (July 30, 1992), reasoning that the ultimate purchaser of frozen food meals would be the airline rather than the passenger, Customs found that such frozen meals would probably be excepted from individual marking so long as the ultimate purchaser (the airline) received the meals in bulk with proper marking on the outermost containers in which they were imported. See also Information Letter 732988 (May 30, 1990); and HQ 734635 dated December 17, 1992 (the ultimate purchaser of airline washcloths is the airline and not the airline passenger).

Consequently, in this case, assuming the menu covers are sold to restaurants for their own use, the restaurants would be considered the ultimate purchasers. Therefore, so long as the restaurants receive the menu covers in properly marked containers, the individual menu covers may be excepted from country of origin marking pursuant to 19 CFR 134.32(d).

You asked at which point in the production process, the menu covers would have to be marked "MADE IN MEXICO", instead of "MADE IN THE USA." In this case, the menu covers may not be marked "MADE IN THE USA" because they are assembled in Mexico. However, Customs has previously determined that the language "ASSEMBLED IN" constitutes sufficient country of origin marking for articles subject to section 10.22, Customs Regulations (19 CFR 10.22), (i.e., articles assembled in whole or in part of fabricated components, the product of the U.S. and entitled to an exemption of duty under subheading 9802.00.80, HTSUS). In such cases, the country of assembly is considered to be the country of origin and the words "Assembled in" are considered similar in meaning to the words "Made in" and "Product of." Therefore, since the menu covers are assembled in Mexico and are eligible for the duty allowance under subheading 9802.00.80, HTSUS, the country of origin is Mexico, and either the language "ASSEMBLED IN MEXICO OF U.S. COMPONENTS", "ASSEMBLED IN MEXICO", or "MEXICO" is acceptable on each menu cover or their containers.


I. On the basis of the information and samples submitted, it is our opinion that the operations performed abroad to create the menu covers are considered proper assembly operations or operations incidental thereto. Therefore, the menu covers may enter the U.S. under subheading 9802.00.80, HTSUS, with allowances in duty for the cost or value of the U.S. components therein, provided the documentary requirements of 19 CFR 10.24 are satisfied.

II. For purposes of country of origin marking, the ultimate purchaser of the menu covers are restaurants. Accordingly, pursuant to 19 U.S.C. 1304(a)(3)(D), 19 CFR 134.32(d), and 19 CFR 10.22 the menu covers are excepted from individual country of origin marking so long as the ultimate purchaser, the restaurants, receive the menu covers in containers which are marked with either "ASSEMBLED IN MEXICO OF U.S. COMPONENTS", "ASSEMBLED IN MEXICO", or "MEXICO."


John Durant, Director

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