us-cbp-cross-rulings-hq-555073•HQ 555073: Country of origin marking requirements and applicability of partial duty exemption of item 807.00, TSUS, to control mounting bracket, motor shield, water fitting and plug cover assemblies.
HQ 555073: Country of origin marking requirements and applicability of partial duty exemption of item 807.00, TSUS, to control mounting bracket, motor shield, water fitting and plug cover assemblies.
us-cbp-cross-rulings-hq-555073HQ 555073: Country of origin marking requirements and applicability of partial duty exemption of item 807.00, TSUS, to control mounting bracket, motor shield, water fitting and plug cover assemblies.Guidance
Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.
HQ 555073
October 31, 1988
CLA-2 CO:R:C:V 555073 DBI
CATEGORY: Marking/Classification
TARIFF NO.: 9802.00.80; 807.00
Luis Chavez, Esq.
Kemp, Smith, Duncan and Hammond
3505 Boca Chica Boulevard, Suite 450
Brownsville, Texas 78521-4066
RE: Country of origin marking requirements and applicability
of partial duty exemption of item 807.00, TSUS, to control
mounting bracket, motor shield, water fitting and plug cover
assemblies.
Dear Mr. Chavez:
This is in response to your four letters dated July 14,
1988, on behalf of the Whirlpool Corporation, concerning the
country of origin marking requirements and the applicability of
item 807.00, Tariff Schedules of the United States (TSUS), to
four different products identified as a control mounting
bracket, a motor shield, a water fitting and a plug cover
assembly, each to be assembled in Mexico and imported by your
client.
FACTS:
You advise that your client will be importing three
subassembly devices used in refrigerators: a control mounting
bracket assembly used to dispense ice and/or water and control
lights, a plug cover assembly which provides an external seal
for interior components, and a water fitting assembly, used to
dispense water. Each of the three subassembly devices will be
used in the assembly of the refrigerator units and will not be
sold at the retail level as an individual unit. A motor shield
assembly, which is a subassembly device used in washing
machines to shield the motor will also be imported. The motor
shield assembly may be sold at a service department at the
retail level as an individual unit; but mainly, it will be
utilized by your client in the assembly of washing machines.
Your client will be assembling the control mounting
bracket, motor shield, water fitting and plug cover assemblies,
in Mexico. Your letters contain detailed descriptions of the
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assembly steps involved in producing each of the four products.
The described processes include such operations as screwing,
clamping, taping, press fitting and the use of an adhesive.
The component parts are U.S.-made and the finished products
will be returned to the U.S. for installation into
refrigerators and washing machines.
You indicate that your client would like to mark the
outermost container or holder of the component part either
"Assembled in Mexico" or "U.S. Components Assembled in Mexico"
in close proximity to their U.S. address.
ISSUES:
(1)Whether the described control mounting bracket, motor
shield, water fitting and plug cover assemblies, when returned
to the U.S., will be eligible for the partial exemption from
duty in item 807.00, TSUS, (9802.00.80, Harmonized Tariff
Schedule of the United States (HTSUS)).
(2)Whether it is acceptable to indicate the country of
origin of the subassembly devices on the outermost container or
holder which reaches the U.S. plant instead of on the devices
themselves.
LAW AND ANALYSIS:
Item 807.00, TSUS, applies to articles assembled abroad in
whole or in part of fabricated components, the products of the
U.S., with no operations performed thereon except the
attachment of the components to form the imported merchandise
and operations incidental thereto. An article classified under
item 807.00, TSUS, is subject to duty upon the full appraised
value of the imported article, less the cost or value of such
products of the U.S. 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 force fitting, gluing or the use of
fasteners, and may be preceded, accompanied, or followed by
operations incidental to the assembly as illustrated in
paragraph (b) of this section.
In the present case, the described processes of screwing,
clamping, press fitting, taping and the use of an adhesive, are
all acceptable assembly operations under section 10.16(a).
Moreover, the information submitted indicates that the U.S.
components exported to Mexico for assembly into the four
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products are not subjected to further fabrication in Mexico.
Under these circumstances, it is our opinion that the control
mounting bracket, motor shield, water fitting and plug cover
assemblies are eligible for item 807.00, TSUS, treatment.
You also ask for confirmation that the assembler could
correct deficiencies that are discovered during the assembly
process with parts and assembly processes which will produce a
product that complies with customer specifications. This may
involve the removal and replacement of previously assembled
parts. We are of the opinion that the described process of
detecting and correcting deficiencies in the assembled products
during the assembly process constitutes an operation which is
incidental to assembly. See section 10.16(b), Customs
Regulations (19 CFR 10.16(b)).
With regard to the country of origin marking requirements,
section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304),
requires, with certain exceptions, that 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 container) will
permit in such a manner as to indicate to an ultimate purchaser
in the U.S. the English name of the country of origin of the
article. An ultimate purchaser is defined in section 134.1(d),
Customs Regulations (19 CFR 134.1(d)), as "the last person in
the United States who will receive the article in the form in
which it was imported."
Section 134.1(d)(1), Customs Regulations, provides that if
an imported article will be used in manufacture in the U.S.,
the U.S. manufacturer may be the ultimate purchaser if he
subjects the imported article to a process which results in a
substantial transformation of the article. Section 134.35,
Customs Regulations (19 CFR 134.35), provides that in such
circumstances, the imported article is excepted from marking
and the outermost container of the imported article shall be
marked. A substantial transformation occurs when the
manufacturer converts or combines the imported article into an
article having a name, character, or use different from the
imported article. See United States v. Gibson-Thomsen Co.
Inc., 27 CCPA 267 (C.A.D. 98) (1940). If, however, the
manufacturing process is merely a minor one which leaves the
identity of the imported article intact, section 134.1(d)(2),
Customs Regulations, provides that the consumer or user of the
article, who obtains the article after the processing, will be
regarded as the ultimate purchaser and the article in question
must be individually marked.
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In this case, your client is the ultimate purchaser of the
imported subassembly devices that are used in the manufacture
of refrigerators or washing machines. While not specifically
stated, it is clear that each subassembly device is a minor
component, both in terms of cost and function, to the appliance
into which it is assembled. By assembling the imported
subassembly into a refrigerator or washing machine, your client
converts it into an integral and permanent part of the
completed appliance. Each subassembly loses its separate
identity when it is used in this manner and is substantially
transformed into an article having a different name, character
or use.
Your client is not, however, the ultimate purchaser of the
motor shield assembly that is sold in a service department at
the retail level. Based on the information supplied, it
appears that in such circumstances, the ultimate purchaser is
the retail purchaser.
HOLDING:
On the basis of the information submitted, we are of the
opinion that the operations performed abroad may be considered
acceptable assemblies, and, therefore, allowances in duty may
be made under item 807.00, TSUS, for the cost or value of the
U.S. components exported for assembly into the control mounting
bracket, motor shield, water fitting and plug cover assemblies,
upon compliance with the applicable Customs Regulations (19 CFR
10.11-10.24).
The motor shield assemblies that are sold at a service
department at the retail level cannot be marked with the
country of origin only on the outermost container or holder in
which they reach your client, but must be marked in a manner
that will inform the retail purchaser of the country of origin.
The control mounting bracket, water fitting, motor shield
and plug cover assemblies that are used in the assembly of
refrigerators or washing machines may be marked in the
outermost container or holder in which they reach your client
provided the district director is satisfied that the articles
will be used only in this manner and will not be individually
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sold and the outermost containers are properly marked with the
country of origin. The proposed marking "Assembled in Mexico"
or "U.S. Components Assembled in Mexico" in close proximity to
the U.S. address is acceptable.
Sincerely,
John Durant, Director
Commercial Rulings Division
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