HQ 555146: Applicability of item 807.00, TSUS, to certain chenille letters and chevrons manufactured in Haiti

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 555146
                                   January 4, 1989

          CLA-2  CO:R:C:V  555146 DBI

          CATEGORY:  Classification

          TARIFF NO.:  9802.00.80, HTSUS (807.00, TSUS)

          Mr. Bruce Redman
          Redman's Awards, Inc.
          1025 W. Territorial Road
          Battle Creek, Michigan 49015

          RE:   Applicability of item 807.00, TSUS, to certain chenille
                letters and chevrons manufactured in Haiti

          Dear Mr. Redman:

                This is in response to your letters dated July 9 and
          September 29, 1988, concerning the applicability of item 807.00,
          Tariff Schedules of the United States (TSUS), to certain chenille
          letters and chevrons manufactured in Haiti and imported by your
          company.

          FACTS:

                Your company purchases orlon and felt in the U.S. and ships
          them to Haiti.  In Haiti, the orlon is put on chenille embroidery
          machines, sewn to the felt and cut into the shape of various
          letters and chevrons for individual schools.

                In a telephone conversation with a member of my staff, Mrs.
          Redman explained that you previously had the orlon and felt cut
          to shape in the U.S. after which the cut pieces were merely sewn
          together in Haiti.  However, the fabric now is cut to shape and
          sewn in Haiti.

          ISSUE:

                Whether the chenille letters and chevrons, when returned to
          the U.S., are eligible for the partial duty exemption in
          subheading 9802.00.80, Harmonized Tariff Schedule of the United
          States (HTSUS) (807.00, TSUS).

          LAW AND ANALYSIS:

                As you may be aware, the HTSUS will replace the TSUS,
          effective January 1, 1989.  Item 807.00, TSUS, will be carried
          over into the HTSUS without change as subheading 9802.00.80.















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          Subheading 9802.00.80, HTSUS, applies to articles assembled
          abroad in whole or in part of fabricated components, the product
          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
          subheading 9802.00.80, HTSUS, 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 10.14(a), Customs
          Regulations (19 CFR 10.14(a)), provides that the 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.

                We have previously held that subheading 9802.00.80, HTSUS,
          does apply to materials exported in continuous lengths that are
          merely cut to individual lengths abroad prior to assembly.
          However, it does not apply to materials which are cut into
          specific shapes or patterns abroad prior to the assembly process.
          Cutting parts to pattern shape from exported material is a
          further fabrication and would not be considered incidental to the
          assembly operation under subheading 9802.00.80, HTSUS.  HQ 555012
          (August 26, 1988).  See, section 10.16, Customs Regulations (19
          CFR 10.16).  For your information, we have enclosed a copy of the
          Customs Regulations relating to subheading 9802.00.80, HTSUS (19
          CFR 10.11-10.24).

                We also wish to point out that U.S. Note 2, subchapter II,
          Chapter 98, HTSUS, provides that any product of the U.S. which is
          returned after having been advanced in value or improved in
          condition abroad by any process of manufacture or other means is
          treated as a foreign article for purposes of the Tariff Act of
          1930, as amended.

                We hope that this letter and the information provided to
          you by telephone clarifies the difference between your previous
          practice of cutting the letters and chevrons to shape in the U.S.
          and sewing abroad, which is permitted under subheading
          9802.00.80, HTSUS, and your present process of cutting the fabric
          to shape and sewing it in Haiti, which is not permitted under
          this tariff provision.




















                                         -3-



          HOLDING:

                On the basis of the information submitted, it is our
          opinion that cutting the exported materials into the shape of
          letters and chevrons is not an acceptable assembly nor an
          operation incidental to assembly, and, therefore, no allowances
          in duty may be made under subheading 9802.00.80, HTSUS, for the
          cost or value of the orlon and felt.

                                     Sincerely,





                                     John Durant
                                     Director, Commercial
                                     Rulings Division

          Enclosure