HQ 555846: GSP eligibility of a programmable remote control transmitter. Eligible article; 085335; 087108

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 555846

                         March 15, 1991

CLA-2 CO:R:C:S  555846 KCC

CATEGORY:  Classification

TARIFF NO.:  8529.90.35

Mr. Gordon W. Larson
Rudolph Miles & Sons, Inc.
4950 Gateway East
P.O. Box 144
El Paso, Texas  79942

RE:  GSP eligibility of a programmable remote control
     transmitter. Eligible article; 085335; 087108

Dear Mr. Larson:

     This is in response to your letter dated December 28, 1990,
on behalf of Philips Consumer Electronics Company (PCEC),
concerning the eligibility of a programmable remote control
transmitter assembled in Mexico for duty-free treatment under the
Generalized System of Preferences (GSP) (19 U.S.C. 2461-2466).
Samples of the printed circuit board assembly (PCBA) and the
other components included in the finished programmable remote
control transmitter were submitted for examination.

FACTS:

     PCEC presently enters the "Smart One" programmable remote
control transmitter (remote control device) into the U.S. under
subheading 8537.10.0060, Harmonized Tariff Schedule of the United
States (HTSUS) and claims a reduction in duty under subheading
9802.00.80, HTSUS.  A PCEC subsidiary, Subensambles Electronicos,
S.A. de C.V., assembles the remote control in Mexico.  The
foreign operations entail:

     1.   attaching printed circuit boards (PCBs) (a panel of 5
          PCBs) to an automatic panel feeder;
     2.   feeding the panel through various machines:
          a)   a solder paste machine applies solder to specific
               points on the PCBs through a squeegee and stencil
               arrangement;
          b)   the first onserter machine attaches Quad Pak
               integrated circuits (ICs) to the PCBs;
          c)   the second onserter machine attaches resistors,
               capacitors, diodes, and transistors (chip
               components) to the PCBs;

          d)   in the oven solder paste is "reflowed" to solder
               the ICs and chip components to the PCBs;
          e)   the PCBs are inspected and tested; and
          f)   the PCBs are broken apart from the panel;
     3.   manual attaching and soldering of the light emitting
          diodes, infra-red emitting diodes, crystal battery and
          wires to a PCB;
     4.   attaching a photo sensor, position switch and capacitor
          to the PCB (now known as the PCBA);
     5.   attaching the overlay, key-pad, and PCBA to the case
          top;
     6.   attaching the battery terminals to the case bottom;
     7.   screwing the case top and bottom together;
     8.   testing the remote control;
     9.   attaching the battery cover and label to the remote
          control; and
     10.  packaging the remote control.

     Upon completion of the Mexican operations, the remote
control is imported into the U.S.

ISSUE:

     Whether the remote control transmitter is entitled to duty-
free treatment under the GSP.

LAW AND ANALYSIS:

     Under the GSP, eligible articles the growth, product or
manufacture of a designated beneficiary developing country (BDC)
which are imported directly into the customs territory of the
U.S. from a BDC may receive duty-free treatment if the sum of 1)
the cost or value of materials produced in the BDC, plus 2) the
direct costs of the processing operation in the BDC, is
equivalent to at least 35% of the appraised value of the article
at the time of entry.  See, 19 U.S.C. 2463(b).

     If an article is produced or assembled from materials which
are imported into the BDC, the cost or value of those materials
may be counted toward the 35% value-content minimum only if they
undergo a double substantial transformation in the BDC.  See,
section 10.177, Customs Regulations (19 CFR 10.177), and Azteca
Milling Co. v. United States, 703 F. Supp. 949 (CIT 1988), aff'd,
890 F.2d 1150 (Fed. Cir. 1989).  That is, the cost or value of
the imported materials used to produce the PCBA may be included
in the GSP 35% value-content computation only if they are first
substantially transformed into a new and different article of
commerce, which is itself substantially transformed into a
remote control.

     Mexico is a BDC.  See, General Note 3(c)(ii)(A), HTSUS.
You state that the remote control device is classified under
subheading 8537.10.0060, HTSUS, which is a GSP eligible
provision.

     However, we have held that remote control devices of this
type are properly classified under subheading 8529.90.35, HTSUS,
which provides for "[p]arts suitable for use solely or
principally with the apparatus of headings 8525 to 8528:
[o]ther:  [o]f television apparatus:  [o]ther," which is not a
GSP eligible provision.  See, Headquarters Ruling Letter (HRL)
085355 dated January 4, 1990, and HRL 087108 dated August 29,
1990.  Therefore, the remote control device will not be entitled
to duty-free treatment under the GSP program.

HOLDING:

     Based on our prior rulings, the remote control device is
classified under subheading 8529.90.35, HTSUS, which is not a GSP
eligible provision.  Therefore, the remote control device is not
entitled to the duty-free treatment under the GSP.


                              Sincerely,



                              John Durant, Director
                              Commercial Rulings Division