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NY A87405

October 9, 1996

CLA-2-62:RR:NC:WA:354 A87405


TARIFF NO.: 9802.00.80

Ms. Veronica Wong
The Lovable Company
2121 Peachtree Industrial Blvd.
Buford, Georgia 30518

RE: Applicability of partial duty exemption under HTSUS subheading 9802.00.80 of foreign fabric cut in the United States and exported for assembly

Dear Ms. Wong:

In your letter dated September 3, 1996, you requested information regarding foreign fabric imported into the U.S. then cut and exported for assembly into apparel items such as bras and panties. No samples were sent with your request.

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.

Regarding the fabricated components Section 10.25, Customs Regulations (19 CFR 10.25) states:

Where a textile component is cut to shape (but not to length, width, or both) in the United States from foreign fabric and exported to another country, territory, or insular possession for assembly into an article that is then returned to the United States and entered, or withdrawn from warehouse, for consumption on or after July 1, 1996, the value of the of the textile component shall not be included in dutiable value of the article. For purposes of determining whether a reduction in the dutiable value of an imported article which may be allowed under this section:

(a) The terms "textile component" and fabric have reference only to goods covered by the definition of "textile or apparel product" set for in ?102.21(b)(5) of this chapter: (b) The operations performed abroad on the textile component shall conform to the requirements and examples set forth in ?102.16 insofar as they may be applicable to a textile component; and (c) The valuation and documentation provisions of ??10.17,10.18,10.21 and 10.24 shall apply.

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).

Your letter does not make clear what specific materials of foreign origin will be imported or the physical condition of the cut components at the time they are exported for eventual "assembly" in Costa Rica or Panama. Nor does it provide detailed documentary information relating to the nature of the processing and assembly operations performed in Costa Rica or Panama on the cut materials and components. This documentary information should be submitted to the appropriate Customs officers at the port of entry for their review.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Brian Burtnik at 212-466-5880.


Roger J. Silvestri

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