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HQ 557365

August 30, 1993

CLA-2 CO:R:C:S 557365 WAW


TARIFF NO.: 9802.00.80

Steven H. Becker, Esq.
Coudert Brothers
1114 Avenue of the Americas
New York, N.Y. 10036-7794

RE: Applicability of certain steel components for the partial duty exemption available under subheading 9802.00.80, HTSUS; drawer slide

Dear Mr. Becker:

This is in response to your letter dated May 19, 1993, on behalf of Accuride International Inc., regarding the applicability of the partial duty exemption available under subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to certain steel components imported from Mexico. Sample merchandise was enclosed for our review.


Accuride produces bell bearing drawer slides which are utilized in furniture to facilitate the movement of drawers. The production of a finished drawer slide requires several steps. You state that Accuride will import steel sheet from Japan. The steel sheet will then be processed in the U.S. into drawer slide members or bell retainer members. These components will then be sent to Mexico where they will be assembled into finished ball bearing drawer slides. The finished drawer slides will be reimported into the U.S. The details of the U.S. and Mexican production steps are as follows:

A. Processing of steel sheet in the U.S. to produce drawer slide members

1. Cold-rolled steel sheet in coil form ("steel sheet") is first imported from Japan. This steel sheet will first be slit into three equal-width "mults". Each mult will then be cold-rolled in Accuride's mill to achieve a specified hardness, tolerance, and better material quality and workmanship. Next, the equal-width mults will be further slit to achieve a certain width (depending upon their ultimate use). These finished mults will then be stored until they are needed to fabricate the members.

2. There are three different types of drawer slide members - outer - members, intermediate members, and inner members - each of which undergoes a slightly different fabrication process. The different slide members will be assembled in Mexico into a finished drawer slide. The outer drawer slide member is produced when a finished-width mult is put through a rolling machine to form the members. Holes are pierced and then the member is cut to length and ball retainer stops are then cut. The intermediate drawer slide member is produced when steel sheet is run through a rolling machine and cut to length. Holes are then pierced and coined, and stops are notched and formed. The inner drawer slide member is produced when steel sheet is put through a pre-pierce machine to pierce holes, notch and cut the members to length. The resulting component is then pierced and formed, and holes are pierced for latch and form stops.

3. After the members are produced, they will be plated with zinc chromate or an electrostatic powder coating in order to protect the slides from corrosion. The zinc plating is as follows: (a) unplated slide members are hung on metallic racks; (b) the members are subjected to a series of alkaline soap washes, controlled rinses, hydrochloric acid soaks and neutralization of acids; (c) the members are plated with zinc by passing a positively charged current through the metal slide members. The negatively charged ions of the zinc ball anodes surrounding the members bend the zinc from the dissolved anodes to the slide members; (d) the members are dipped in either a clear or black chromate; (e) the members are rinsed in an ambient temperature water; (f) the members are dried with forced hot air.

The electrostatic powder coating process is as follows: (a) the unplated slide members are cleaned and phosphate coated to provide a smooth base; (b) a thermo-set power is applied to the member via a spray gun from a feeder unit where the powder is diffused by compressed air into a fluid-like state; (c) the fluidized powder is then siphoned out by the movement of high velocity air flowing through a venturi. It is propelled through a powder feeder tubing to a spray gun; (d) a high voltage, lower amperage power unit supplies a charging electrode at the front of the spray gun. The charging electrode emits a field charge which is imparted to the powder particles. This causes the powder to seek out and attach itself to the member; (e) the member is then heated in an oven. Through this heating process, the thermo-set powder cures and the slide member will have a white color corrosion protective finish.

B. Processing of steel sheet to produce ball retainer members

In order to produce the ball retainer members, electro-galvanized steel sheet in coil form is imported from Japan and shipped~directly to an outside vendor (also in the U.S.) where they are cold-rolled and slit to Accuride's specifications. The finished-width mults are then shipped from this outside vendor to Accuride where they are stored until they are needed for the production of the ball retainer assemblies. In order to produce the ball retainer assembly, the finished-width mult is put through a machine to pierce holes, notch, cut to length and form the member. Ball retainer assemblies are used to improve drawer movement.

C. Assembly in Mexico

After the slide drawer members and ball retainer members have been completely fabricated, they will be exported to Mexico, along with other U.S.-origin components, where they will be assembled into finished drawer slides. The assembly of the slide drawer is as follows: (1) insert grease, ball retainer and bell bearings into intermediate member; (2) assemble and rivet guide block to intermediate member; (3) assemble bumper to outer member and insert grease; (4) insert ball retainer spacer assemblies and assemble intermediate member to outer member; (5) form outer member stop and assemble bumper to stop; (6) place felt pad on inner member stop; (7) rivet latch to inner member; (8) assemble inner member to slide assembly; and (9) place slide in box with STD chip, end filler, foam pad, and rib-end insert.


Whether the drawer slide components will qualify for a partial duty allowance under subheading 9802.00.80, HTSUS, when returned to the U.S.


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

Section 10.16(a), Customs Regulations (19 CFR 10.16(a)) provides, in part, that:

The assembly operations performed abroad may consist of any method used to join or fit together solid components, such as welding, soldering, riveting, force fitting, gluing, laminating, sewing, or the use of fasteners, and may be preceded, accompanied, or followed by operations incidental to the assembly as illustrated in paragraph (b) of this section.

Section 10.12(e), Customs Regulations (19 CFR 10.12(e)), provides generally that an article wholly or partially of foreign components or materials, may become a "product of the United States" if such components or materials are "substantially transformed" in the U.S. by a process of manufacture into a new and different article, or are merged into a new or different article. Section 10.14(b), Customs Regulations (19 CFR 10.14(b)), provides that a "substantial transformation" occurs when, as a result of manufacturing processes, a new and different article emerges, having a distinctive name, character, or use, which is different from that originally possessed by the article or material before being subject to the manufacturing process. If the manufacturing or combining process is merely a minor one which leaves the identity of the article intact, a substantial transformation has not occurred. See Belcrest Linens v. United States, 573 F. Supp. 1149 (CIT 1983), 741 F.2d 1368 (1984).

In general, cutting or bending materials to defined shapes or patterns suitable for use in making finished articles, as opposed to mere cutting to length or width which does not render the article suitable for a particular use, constitutes a substantial transformation. In Headquarters Ruling Letter (HRL) 055684 dated August 14, 1979, Customs held that those components of a water cooler gas absorption refrigeration unit which were formed by cutting to length, and bending imported steel tubes into the component shapes and configurations, or by cutting to length, flattening, and drilling holes into imported tubing, were substantially transformed constituent materials for GSP purposes, while those imported tubes which were simply cut to length and assembled into the final articles were not. In HRL 555532 dated September 18, 1990, we held that the production of a skirt and jacket assembled into a water heater by shearing cold rolled steel to rectangular shape, piercing to form the various openings, and roll forming the steel into tubular shape results in a substantial transformation. Moreover, in HRL 555532, we also held that the creation of the top and bottom heads and pans of the water heater by blanking hot rolled or cold rolled steel, die for~ing (or drawing), and die piercing also constituted a substantial transformation.

We are of the opinion that the processing of the imported steel sheet in the U.S. is similar to the processes performed in HRL's 055684 and 555532, and therefore, results in a substantial transformation of the sheet into a "product of" the U.S. After slitting and cold-rolling the steel sheet, the mults will be rolled, cut, pierced, notched and plated. The result of these processing operations in the U.S. is the creation of new and different articles, such as the drawer slide members or ball retainer members, each of which has a distinct character and use that is different from the steel sheet in coil form. Thus, the processing that occurs in the U.S. substantially transforms the steel sheets imported from Japan into new and different articles, i.e., steel drawer members and ball retainer assemblies, having distinctive names, characters and uses.

The assembly of the drawer slides in Mexico involves joining, fitting, riveting and forming. All of these processes, aside from the forming operation, are considered acceptable assembly operations within the meaning of 19 CFR 10.16(a). In addition, completely and securely enclosing certain components within other components is also an acceptable assembly operation. See HRL 554920 dated January 3, 1989 (completely enclosing a metal weight in the bottom hem of vertical blinds is an acceptable assembly process).

You state that the "forming" that takes place in assembly step #5, consists of the banding of the notched end of the outer member to accommodate the placement of the bumper. The outer member Will be placed in a machine which will quickly band the notched metal of the outer member in an upright position to accommodate the bumper stop placement. You state that the placement of the bumper forms a closure at one end of the drawer slide, so that the intermediate member will not fall out during the remainder of the assembly process and thereafter. Thus, you claim that the bending of the outer member to hold the bumper stop is clearly an operation incidental to assembly.

Pursuant to 19 CFR 10.16(b)(5), adjustments in the shape or form of a component to the extent required by the assembly being performed abroad is considered an operation incidental to the assembly process. We have previously held in HRL 555533 dated June 4, 1990, that bending or deforming a portion of a bracket used in a starter solenoid switch, by means of a press, over a sub-assembled housing unit for the sole purpose of attaching the bracket to the unit, was an. acceptable operation incidental to assembly. In addition, we held in HRL 555486 dated November 20, 1989, that bending the edges of mylar slot insulators assembled into stator cores was an operation incidental to assembly, based on the fact that the bending was so related to the assembly that it would not be feasible to perform it except during assembly.

Consistent with HRL's 555533 and 555486 and 19 CFR 10.16(b)(5), we are of the opinion that the bending (forming) of the steel on the outer member is an operation incidental to the assembly process which does not preclude the partial duty exemption available under subheading 9802.00.80, HTSUS. The forming of the outer member could not be undertaken in the U.S. as it would be impossible to assemble the outer and intermediate members together if the outer member was formed prior to the assembly process. If the notched end of the outer member were formed prior to assembly, it would close off one end of the outer member making the assembly of the outer member and intermediate member impossible. It would also be impractical to form the metal in a process separate from the placement of the bumper on the end of the outer member, as it is necessary to ensure that the two will fit together properly. In addition, you state that the cost and time of the bending operation is minor. Accordingly, we find that bending the steel on the outer member of the drawer slide is minor in nature and qualifies as an operation incidental to the assembly operation.

Next, you state that Accuride may undertake the plating processes in Mexico as opposed to the U.S. and you believe that this operation should not affect the eligibility of the drawer slides for a duty exemption under subheading 9802.00.80, HTSUS. It is your position that the plating operation constitutes an operation incidental to the assembly process. You state that the electrostatic powder coating and the zinc plating that are applied to the drawer slide members are utilized primarily to protects the drawer slides from corrosion. Moreover, you claim that given the purpose and nature of the application of a corrosion protective coating, the processes are more logically performed in Mexico immediately prior to the assembly process.

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 section 10.16(a), Customs Regulations (19 CFR 10.16(a)). For instance, section 10.16(b)(1), Customs Regulations (19 CFR 10.16(a)), provides that cleaning is an incidental operation. 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 HTSUS subheading 9802.00.80 to that component. See 19 CFR 10.16(c).

Regarding the plating operation, 19 CFR 10.16(c)(5) provides that "plating (other than plating incidental to the assembly)" is an example of an operation which is not incidental to assembly. Therefore, as plating is specifically cited in the regulations as generally "not incidental to the assembly" process, the burden falls upon the importer to establish that the plating operation in this case is incidental to the assembly process.

In United States v. Mast Industries, Inc., 515 F. Supp. 43, 1 CIT 188 (1981), aff'd, 69 CCPA 47, 668 F.2d 501 (1981), the court, in examining the legislative history of the meaning of "incidental to the assembly process," stated that:

[t]he apparent legislative intent was to not preclude operations that provide an "independent utility" or that are not essential to the assembly process; rather, Congress intended a balancing of all relevant factors to ascertain whether an operation of a "minor nature" is incidental to the assembly process.

The court then indicated that relevant factors included:

(1) whether the relative cost and time required by the operation are such that the operation may be considered minor;
(2) whether the operation is necessary to the ssembly process;
(3) whether the operation is so related to the assembly that it is logically performed during assembly; and (4) whether economic or other practical considerations dictate that the operation be performed concurrently with assembly.

In order to be considered incidental to assembly, the foreign operations should be such that they ordinarily cannot be provided for in advance, are concomitant with and closely related to the assembly process, and are of such a minor nature as to leave no doubt that they are merely incidental to the assembly process. This would exclude those operations considered substantial or material in nature so as to approach the status of a fabrication that significantly advances the components in value or condition while abroad.

We have previously held that under certain circumstances, coating or plating of various components to prevent corrosion is considered an operation incidental to assembly. See HRL 556197 dated December 4, 1991, in which we held thatgunitee coating of steel water pipes to prevent corrosion associated with water was considered an operation incidental to assembly. See also HRL 556124 dated October 31, 1991, in which we held that powder coating spring brakes to protect against corrosion associated with snow and ice removal was considered an operation incidental to assembly; and HRL 556271 dated January 15, 1992, which held that the operations which consisted of zinc plating, rinsing, dichromate dipping, rinsing and drying of cases and covers of gas furnace ignition devices to prevent corrosion before being assembled with other components to complete the ignition devices, were incidental to assembly. Furthermore, in HRL 556271, the time involved in plating the cases and covers of gas furnace ignition devices was 1.08 minutes, while the total time to assemble an ignition device was 41.46 minutes; thus, the plating time represented 2.6 percent of the total assembly time.

However, we recently held in HRL 557133 dated June 3, 1993, that plating clips with gold to provide maximum electrical conductivity while reducing the rate of oxidation of the metal before they are force-fitted inside metal shells for use in pinsockets does not constitute' an operation incidental to the assembly process. We stated that the plating in that case significantly altered the fundamental characteristics of the clips, thereby making it the type of plating operation which is precluded under 19 CFR 10.16(c)(5). In addition, the time involved in plating the clips represented approximately 72 percent of the total time involved in the assembly of the clips. We also stated that there was no evidence that the plating was so closely related to the assembly process as to make it logically performed concurrently with that operation. We also found that the amount of capital investment for the plating operation was much more significant than that for the assembly operation.

In the instant case, based on the information provided in your submission dated August 19, 1993, regarding the cost and time of the plating operation, we conclude that the plating and electrostatic powder coating operations are not incidental to the assembly operation. Unlike the plating operation in HRL 556271 (described above) where the time involved in plating a case and cover for a gas furnace ignition device with zinc dichromate represented 2.6 percent of the total assembly time, here, the time involved in plating the drawer slides represents approximately 33.2 percent of the total assembly time. (Information regarding the time involved for the elecrostatic powder coating operation was unavailable). In addition, the cost involved in plating and coating the drawer slides represents approximately 3.3 percent (zinc plating) and 46.1 percent (electrostatic powder coating) of the cost of the U.S. components being plated. In General Motors v. United States, 770 F. Supp. 641 (CIT 1991), 976 F.2d 716 (Fed. Cir. 1992), the Court of Appeals for the Federal Circuit reversed the lower court's holding that topcoat painting operations performed on U.S.-origin sheet metal components shipped to Mexico for assembly into automobiles were "incidental to assembly," considering the cost of all of the painting operations (including undercoating, sanding, baking, topcoating, and waxing). Based on the time and cost figures for the plating and coating operations, it appears that these operations are not minor, and therefore, not "incidental to the assembly process."

Furthermore, we are not satisfied that the plating and coatings operations are logically performed concurrently with the assembly in view of economic and other practical considerations. Nor do we see any persuasive reason why the drawer slides cannot be plated and coated in the U.S. prior to being exported to Mexico for assembly. Simply because the protective coatings must be applied prior to the assembly process, does not mean that the plating and coating operation cannot take place in the U.S. Therefore, we find no evidence that the plating and electrostatic coating operations are so closely related to the assembly process as to make it logically performed concurrently with those operations.

Thus, applying the Mast criteria and consistent with our previous rulings, it is our opinion that the plating and coating operations are not incidental to the assembly process.


On the basis of the information provided, the steel sheets imported from Japan undergo a substantial transformation in the U.S. into "products of" the U.S. Moreover, the assembly of the drawer slides is considered an acceptable assembly operation pursuant to subheading 9802.00.80, HTSUS. However, it is our opinion that the operations of plating and coating the drawer slide components are not considered operations incidental to the assembly process. Therefore, if the plating and coating operations are performed in Mexico, no allowance in duty may be made under subheading 9802.00.80, HTSUS, for the cost or value of the U.S.-origin drawer slide components.


John Durant, Director
Commercial Rulings Division

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