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HQ 561683

December 6, 2000

CLA-2 RR:CR:SM 561683 KSG


TARIFF NO.: 9802.00.80

Timothy C. Stanceu
Hogan & Hartson L.L.P.
555 13th Street N.W.
Washington, D.C. 20004

RE: Eligibility of chocolate confectionary product for a partial duty exemption under subheading 9802.00.80, HTSUS; assembly- encapsulation; food ingredients; 10.16

Dear Mr. Stanceu:

This is in reference to your letter dated February 10, 2000, on behalf of Nestle U.S.A., requesting a binding ruling concerning the eligibility of chocolate confectionary products for a partial duty exemption under subheading 9802.00.80 of the Harmonized Tariff Schedule of the United States (HTSUS).


Your client plans to make in the U.S. small edible sweet confections molded into various shapes of recognizable characters. The confections are exported to Germany. In Germany, milk chocolate hemispheres are made of sugar, cocoa butter, chocolate and milk and the U.S.- origin sweet confections are completely enclosed within two chocolate hemispheres that are joined at their edges. Each edge is heated to its melting point to form a solid bond. The finished products, which are called the “Nestle Wonderball”, will be imported into the U.S. in packaged form, ready for retail sale. Customs has classified the Nestle Wonderball in subheading 1806.90.9019, HTSUS.


Whether the chocolate confectionary products are eligible for a partial duty exemption under subheading 9802.00.80, HTSUS.


Subheading 9802.00.80, HTSUS, provides a partial duty exemption for:

Articles assembled abroad in whole or in part of fabricated components, the product of the U.S., 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 articles, less the cost or value of the U.S. component assembled therein, upon compliance with the documentary requirements of 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 U.S. to qualify for the exemption. Components will not lose their entitlement to the exemption by being subject 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 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. The mixing or combining of liquids, gases, food ingredients, and amorphous solids with each other or with solid components is not regarded as an assembly.

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 HTSUS subheading 9802.00.80 to that component. See 19 CFR 10.16(c).

The first issue concerns whether enclosing the U.S.-origin sweet confection within the German-origin chocolate hemispheres constitutes a “mixing or combining offood ingredients,” which is specifically enumerated in section 10.16(a) as an operation not regarded as an assembly. The term “ingredient” is defined in The Random House Dictionary of the English Language (1973) as “something that enters as an element into a mixture: the ingredients of a cake.” Based on this definition and the context in which the term “food ingredients” is used in section 10.16(a), we do not believe that either the edible confection or the chocolate hemispheres qualify as “ food ingredients.”

Customs held in Headquarters Ruling Letter (“HRL”) 560820, dated July 20, 1998, that completely and securely enclosing certain components (optical fibers bundled into steel tubes) within other components is considered an acceptable assembly operation. See also HRL 554920,dated January 3, 1989, (completely enclosing a metal weight in the bottom hem of vertical blinds is an acceptable assembly), and HRL 556878, dated March 18, 1993. Based on the above, we find that the encapsulation of the confectionary character within the chocolate hemispheres is an acceptable assembly operation.


Based on the information provided, the imported chocolate confectionary products described above are eligible for a duty allowance under subheading 9802.00.80, HTSUS, for the cost or value of the U.S.-origin confections, assuming compliance with the documentation requirements of 19 CFR 10.24.

A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.


John Durant, Director
Commercial Rulings Division

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