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NY F84193

April 5, 2000

CLA-2-39:RR:NC:SP:221 F84193


TARIFF NO.: 3926.90.9880

Mr. Kevin Egan
E. Besler & Co.
115 Martin Lane
Elk Grove Village, IL 60007

RE: The tariff classification of a tool case pocket assembly from El Salvador.

Dear Mr. Egan:

In your letter dated February 28, 2000, on behalf of Platt Luggage, you requested a tariff classification ruling.

The item is identified as a pocket assembly which, after importation, will be combined with other components in the manufacture of a double handled tool carrier. The imported pocket assembly consists of multiple compartments or pockets and two adjustable loops sewn onto a flat sheet of plastics. The pockets and loops will be used to organize the tools that will be carried in the finished tool carrier. The body of the assembly is made from cellular polyvinyl chloride (vinyl) sheeting backed with nonwoven textile fabric. The body is rectangular, with rounded corners, and measures approximately 22 ¾ inches by 13 inches. The two loops are made of “Velcro” type hook and loop fastener tape. The pockets are made of compact vinyl with a nonwoven textile backing.

You state that the vinyl is produced in the United States, but you do not indicate the country of origin of the hook and loop tape. You state that the vinyl body and vinyl pockets are sent to El Salvador cut to size and shape. You have not indicated the condition of the hook and loop tape, but it is likely that it is sent to El Salvador in material lengths. In El Salvador, the pockets and tape are sewn onto the body to form the tool compartments. After importation, the pocket assembly is riveted to a paperboard backing and a zipper is sewn in. A foamed plastic backing is glued to the back. A cover made of woven fabric with two webbed carrying handles is then sewn on to complete the tool carrier case.

The applicable subheading for the pocket assembly will be 3926.90.9880, Harmonized Tariff Schedule of the United States (HTS), which provides for other articles of plastics, other. The rate of duty will be 5.3 percent ad valorem.

Articles classifiable under subheading 3926.90.9880, HTS, which are products of El Salvador are currently entitled to duty free treatment under the Generalized System of Preferences (GSP) upon compliance with all applicable regulations. The pocket assembly will be entitled to duty-free treatment under the GSP only if the direct costs of the processing operations performed in El Salvador represent at least 35% of the appraised value of the articles when imported into the U.S. Since the vinyl material and the hook and loop fastener tape imported into El Salvador are not subjected to a double substantial transformation, the cost or value of these components may not be included in the 35% value-content calculation. The GSP is subject to modification and periodic suspension, which may affect the status of your transaction at the time of entry for consumption or withdrawal from warehouse. To obtain current information on GSP, check the Customs Web site at www.customs.gov. At the Web site, click on "CEBB" and then search for the term "GSP".

You request a ruling as to whether the pocket assembly qualifies for reduced duty in subheading 9802.00.80, HTS. Subheading 9802.00.80, HTS, provides a partial duty exemption for articles assembled abroad in whole or in part of fabricated components, the product of the United States, which were exported in condition ready for assembly without further fabrication, have not lost their physical identity in such articles by change in form, shape or otherwise, and 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, HTS, 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 value of the imported assembled article, less the cost or value of such U.S. components, 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 that the 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, laminating, sewing, or the use of fasteners. Operations incidental to the assembly are not considered further fabrication operations if they are of a minor nature.

In the instant case, sewing pre-cut pieces of vinyl onto a pre-cut vinyl body is considered an acceptable assembly operation. Cutting the hook and loop fastener tape into lengths to form the adjustable loops is considered to be an operation incidental to assembly pursuant to 19 CFR 10.16(b)(5) and (7). Therefore, the tool case pocket assembly may enter under subheading 9802.00.80, HTS, with allowances in duty for the cost or value of the U.S. produced vinyl pockets and vinyl body, as well as for the hook and loop fastener tape if a product of the United States, upon compliance with the documentary requirements of 19 CFR 10.24.

You have inquired about the country of origin marking requirements for this product. The pocket assembly is considered to be a product of El Salvador. The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.41(b), Customs Regulations (19 CFR 134.41(b)), mandates that the ultimate purchaser in the U.S. must be able to find the marking easily and read it without strain. Section 134.1(d), defines the ultimate purchaser as generally the last person in the U.S. who will receive the article in the form in which it was imported. 19 CFR 134.1(d)(1) states that if an imported article will be used in manufacture, the manufacturer may be the ultimate purchaser if he subjects the imported article to a process which results in a substantial transformation of the article. The case of U.S. v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940), provides that an article used in manufacture which results in an article having a name, character or use differing from that of the constituent article will be considered substantially transformed and that the manufacturer or processor will be considered the ultimate purchaser of the constituent materials. In such circumstances, the imported article is excepted from marking and only the outermost container is required to be marked. See 19 CFR 134.35.

In this case, the imported pocket assembly is substantially transformed as a result of the U.S. processing to form the complete tool carrier, and therefore the U.S. manufacturer is the ultimate purchaser of the imported pocket assembly. Under 19 CFR 134.35 only the containers which reach the ultimate purchaser are required to be marked with the country of origin "El Salvador".

You have also requested a ruling as to whether the complete tool carrier may be marked to show the United States as the country of origin. Use of the phrase “Made in USA” or any other indication of United States origin is under the jurisdiction of the Federal Trade Commission. You should direct this question to the Federal Trade Commission, Division of Enforcement, 6th & Pennsylvania Avenue, NW, Washington, D.C. 20508. We are returning your samples so that you may forward them to that agency.

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 Joan Mazzola at 212-637-7034.


Robert B. Swierupski

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