United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1995 HQ Rulings > HQ 557464 - HQ 557836 > HQ 557770

Previous Ruling Next Ruling
HQ 557770

February 24, 1994

CLA-2 CO:R:C:S 557770 WAS


TARIFF NO.: 9801.00.10; 9802.00.50

Mr. Thomas O. Powers
4180 Huanui Street
Honolulu, HI 96816

RE: Eligibility of plastic fake fingernails for the partial duty exemption under subheading 9802.00.50; 554371; 555021

Dear Mr. Powers:

This is in response to your letter dated November 29, 1993, concerning the applicability of the partial duty exemption under subheading 9802.00.50, Harmonized Tariff Schedule of the United States (HTSUS), to painted plastic fake fingernails from Indonesia.


You state that the plastic imitation fingernails are produced in the U.S. by Allied Mold & Die Corp., California. The nails are available in assorted solid colors and are sold in sets of 24. You state that you purchase the nails for approximately two cents per nail. The nails are sent to Puri Mas Art Gallery, Indonesia, where they are painted with decorative designs. The cost of the painting is approximately two cents per nail. You also state that the importer provides the assorted paints and other supplies, which are purchased in the U.S. The decorated nails are then returned to the U.S., where they are packaged and then sold as a decorative, wearable accessory.


Whether the U.S.-origin plastic fake fingernails which are painted with decorative designs in Indonesia are entitled to the partial duty exemption under subheading 9802.00.50, HTSUS, when returned to the U.S.


Articles returned to the U.S. after having been exported to be advanced in value or improved in condition by repairs or alterations may qualify for the partial duty exemption under subheading 9802.00.50, HTSUS, provided the foreign operation does not destroy the identity of the exported articles or create new or different articles through a process of manufacture. However, entitlement to this tariff treatment is precluded where the exported articles are incomplete for their intended use prior to the foreign processing, Guardian Industries Corp. v. United States, 3 CIT 9 (1982), or where the foreign operation constitutes an intermediate processing operation, which is performed as a matter of course in the preparation or the manufacture of finished articles. Dolliff & Company, Inc. v. United States, C.D. 4755, 81 Cust. Ct. 1, 455 F. Supp. 618 (1978), aff'd, C.A.D. 1225, 66 CCPA 77, 599 F.2d 1015 (1979). Articles entitled to this partial duty exemption are dutiable only upon the cost or value of the foreign repairs or alterations when returned to the U.S., provided the documentary requirements of 19 CFR 10.8 are satisfied.

In HRL 554371 dated December 10, 1986, we held that the process of hand-painting sweatshirts abroad is not considered a proper repair or alteration under item 806.20, Tariff Schedules of the United States (TSUS) [the precursor to subheading 9802.00.50, HTSUS]. In HRL 554371, we held that the hand-painting operations constituted a finishing of the garment performed in the course of manufacture - the last step in the total process of producing hand-painted sweatshirts. We further noted that, depending upon customer needs, the garments were not considered finished until they had undergone the final design painting and had become ready for marketing and sale.

In another case, we held that silk screening U.S.-origin socks in Taiwan constituted an operation that exceeded an alteration. See HRL 555021 dated July 1, 1988. In HRL 555021, we stated that although the garments can be worn whether a design is imprinted by silk screening or not, silk screening, like printing and hand-painting, is considered neither a repair nor an alteration under the provisions of item 806.20, TSUS. We further stated in HRL 555021 that socks which have a design as a result of a silk screening process are different from socks without such a design, and, as such, the foreign silk screening process has created a new and different article of commerce.

We believe that our holdings in the above-described rulings are controlling with respect to the applicability of subheading 9802.00.50, HTSUS, to the plastic fingernails under consideration in the instant case. We believe that the foreign decorative painting constitutes an operation that exceeds an alteration under subheading 9802.00.50, HTSUS. The design painting operations to be performed in Indonesia on the exported fingernails clearly will impart substantially new and different characteristics to the fingernails. Although the plastic nails may be worn whether a design is painted or not, as in the printing and silk screening operations described in the above cases, the application of a particular design on the fingernails gives them a unique and specialized appeal, and is a prerequisite to marketing and selling these fingernails in the U.S. Thus, we view the exported fingernails as incomplete for their intended use and the foreign painting operations as a necessary step in the production of the final article - decorative painted fingernails.


On the basis of the information submitted, it is our opinion that the foreign painting operations are not considered proper alterations within the meaning of subheading 9802.00.50, HTSUS. Therefore, upon return to the U.S., the painted plastic fingernails will not be entitled to the partial duty exemption available under this tariff provision, but will be dutiable upon their full value.


John Durant, Director

Previous Ruling Next Ruling

See also: