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NY 816209

November 9, 1995

CLA-2-95:R:N7:224 816209


TARIFF NO.: 9802.00.80; 9507.90.70

Carl D. Cammarata

George R. Tuttle

3 Embarcadero Center, Suite 1160

San Francisco, CA 94111

RE: The tariff classification of fishing flies from Sri Lanka, Thailand, or India.

Dear Mr. Cammarata:

In your letter dated October 26, 1995, you requested a tariff classification ruling on behalf of UFM II, Inc. ("UFM") on the eligibility for a duty exemption under subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUSA), for U.S. origin materials sent to foreign assemblers to be combined with other components to create fishing flies.

According to your submission, fishing flies to be used in fresh and salt water sport fishing are assembled into finished form in either Sri Lanka, Thailand, or India from U.S. chicken feathers, thread of U.S. origin, hooks of Japanese origin, and domestic or foreign artificial or natural material such as fur, rabbit skins, or deer hair. It is claimed that the U.S. origin components (the chicken feathers and thread) qualify for an exemption of duty under 9802.00.80, HTSUSA.

The U.S. grown chicken capes and saddles containing the feathers, and the domestically manufactured thread used to attach the feather to the flies will be exported from the U.S. whereupon foreign assemblers will pluck the feathers from the cape or saddle dried skin, sort them by color and size, and wind the feather around a hook and fly body with a piece of thread to form the completed fly. The feathers remain essentially unchanged from their exported condition except for some minor cleaning and trimming designed to aid the assembly process.

The applicable subheading for sport fishing flies is 9507.90.7000, HTSUSA, which provides for "Fishing rods, fish hooks and other line fishing tackle...: Other: Other, including parts and accessories: Artificial baits and flies." The rate of duty is 9 percent ad valorem.

Subheading 9802.00.80, HTSUSA, 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, lubrication, and painting.

All three requirements of subheading 9802.00.80, HTSUSA, 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 C.F.R. §10.24).

Section 10.14(a), Customs Regulations (19 C.F.R. §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.

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. An example of an operation which is considered incidental to the assembly process is the cutting to length of wire, thread, tape, foil, and similar products exported in continuous length. See section 10.16(b). 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, HTSUSA, to that component. See 19 C.F.R. §10.16(c).

In this case, the imported fishing flies will be eligible for the partial duty exemption available under HTSUSA subheading 9802.00.80. From the facts submitted, the feathers and thread are finished products of the U.S. which are exported for acceptable assembly operations with other components. The cutting to length of the feathers and the trimming operations are considered work incidental to the assembly process and are not further fabrication. See section 10.16(b)(4) (trimming, filing, or cutting off small amounts of excess materials is an example of an operation incidental to assembly). The U.S. components do not lose their physical identity in the assembly operation and it appears from a description of the foreign operation that the U.S. components are not otherwise advanced in value or improved in condition except by being assembled and certain operations incidental to the assembly operation.

On the basis of the information presented, the fishing flies will be eligible for the partial duty exemption under subheading 9802.00.80, HTSUSA, when imported into the U.S., upon compliance with the documentary requirements of 19 C.F.R. §10.24. Allowances in duty will be permitted and predicated on the cost or value of the U.S. origin chicken feathers and the thread, F.O.B. the U.S. port of exportation. Under 9802.00.80, HTSUSA, the F.O.B. value should included the purchase price - or if not purchased, the cost to acquire or manufacture the components and the costs of freight and insurance incurred up to the time of the arrival of the components at the port of exportation. In the case of the U.S. manufactured components here, we understand this F.O.B. value to include the cost of domestic production of the feathers and the cost to "UFM" of purchasing the U.S. origin thread from its U.S. vendors. Proposed production averaging figures and the standards used to determine these figures should be presented to the appropriate Customs officers at the port(s) of entry for their review.

This ruling is being issued under the provisions of Section 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 Tom McKenna at 212-466-5475.


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