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HQ 557629

February 14, 1994

CO:R:C:S 557629 WAS


TARIFF NO.: 9802.00.80

Robert F. Seely, Esq.
Katten Muchin & Zavis
525 West Monroe Street
Suite 1600
Chicago, IL 60661-3693

RE: Applicability of the partial duty exemption under subheading 9802.00.80, HTSUS, to stockinettes from Mexico

Dear Mr. Seely:

This is in reference to your letter dated October 15, 1993, on behalf of Baxter Healthcare Corporation of Deerfield, Illinois ("Baxter"), concerning the applicability of the partial duty exemption available under subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to stockinettes from Mexico. A sample of the merchandise was submitted for our review. The tariff classification of the subject merchandise will be handled under separate cover from the Office of Regulations and Rulings, Food and Chemicals Classification Branch.


You state that the subject merchandise is a stockinette designed for use in hospital operating rooms. The stockinette is used to keep a patient's legs and feet warm and to assist circulation during surgical procedures. You state that the stockinette will be assembled in Mexico entirely from U.S.-origin fabricated components. The components are described as two tubes of U.S.-origin materials that are cut to length in the U.S. The stockinette consists of an outer tube made of Kraton, which is thermoplastic rubber, and an inner tube of 100 percent nylon knit. It is designed to cover the foot and leg, up to and including the thigh.

The assembly steps in Mexico are as follows:

1. place nylon tube around rubber tube;
2. join pieces by sewing at one end;
3. turn article inside out so that rubber tube is on the outside;
4. fold open end to form a cuff;
5. continue folding until entire stockinette is cuffed.


Whether the stockinette is eligible for the partial duty exemption 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 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. 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 10.14(a).

We are satisfied from the information provided that the assembled stockinette meets the requirements of subheading 9802.00.80, HTSUS, and therefore, is entitled to the partial duty exemption available under this tariff provision. The foreign operation that entails attaching two or more components together by sewing is considered an acceptable assembly operation. Therefore, sewing the cut rubber and nylon knit components together at one end in Mexico to produce the final article is an acceptable assembly operation within the meaning of subheading 9802.00.80, HTSUS.

In a case virtually indistinguishable from the facts at issue (Headquarters Ruling Letter (HRL) 064490 dated July 23, 1980), a U.S.-origin outer drape of stretchable rubber material and a U.S.-origin lining composed of a fabric blend of cotton and polyester was sent to Mexico for assembly into a surgical stockinette. The assembly process in this case was described as follows: (1) the textile lining is placed in the plastic tube; (2) the lining and tube are folded together; and (3) the units are placed in a corrugated box. In HRL 064490, we held that "the permanent joining of the outer drape of stretchable material with the inner liner of soft conforming material appears to constitute an assembly for the purposes of item 807.00, TSUS" [now subheading 9802.00.80, HTSUS].

Furthermore, we have previously held that folding operations constitute operations incidental to the assembly. See HRL 557328 dated September 3, 1993 (stamping and folding disposable medical articles which have been assembled by gluing or sewing pre-cut U.S.-origin components were held to be operations incidental to the assembly). We believe that the minor folding operation in the instant case is incidental to the assembly operation in view of 19 CFR 10.16(b)(7), which states that folding of assembled articles is an operation which is incidental to the assembly process. In addition, turning the stockinette inside out after the sewing operation is considered an operation incidental to the assembly process. See HRL 556234 dated December 13, 1991 (folding fabric and turning it inside out during the assembly operation are considered to be operations incidental to assembly pursuant to 19 CFR 10.16(b)(5) and (7)). Therefore, allowances in duty may be made under subheading 9802.00.80, HTSUS, for the cost or value of the U.S.-origin components when the stockinettes are returned to the U.S., upon compliance with the documentation requirements of 19 CFR 10.24.


We are of the opinion that the foreign operations performed in Mexico on the U.S.-origin materials to create the stockinettes are considered proper assembly operations or operations incidental to the assembly process. Therefore, the stockinettes may be entered under subheading 9802.00.80, HTSUS, with allowances in duty for the cost or value of the U.S.-origin materials incorporated therein, upon compliance with the documentary requirements of 19 CFR 10.24.


John Durant, Director

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