HQ 555784: Applicability of subheading 9802.00.80, HTSUS, to gold and pearl bracelets formed by gluing, soldering, insertion; cutting to length. Assembly; incidental operations

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 555784

                                  February 20, 1991


          CLA-2 CO:R:C:S  555784 LS

          CATEGORY:  Classification

          TARIFF NO.:  9802.00.80

          Mr. Michael J. Spain
          Sonnenberg, Anderson,
          O'Donnell & Rodriguez
          200 West Adams Street
          Suite 2625
          Chicago, Illinois 60606

          RE:  Applicability of subheading 9802.00.80, HTSUS, to gold and
               pearl bracelets formed by gluing, soldering, insertion;
               cutting to length.  Assembly; incidental operations

          Dear Mr. Spain:

                This is in response to your letter dated October 9, 1990,
          requesting a ruling, on behalf of Imperial World, Inc., on the
          applicability of subheading 9802.00.80, Harmonized Tariff
          Schedule of the United States (HTSUS), to gold and pearl
          bracelets.  Your letter, which was addressed to the Area Director
          of Customs, New York Seaport, was forwarded to us for a reply.
          An advertising brochure depicting the bracelets was submitted.

          FACTS:

                Imperial World, Inc. plans to ship gold chains, posts, and
          clasps of U.S. origin, and cultured pearls, of Japanese origin,
          to Hong Kong, where the following operations will take place.
          The chains, which are shipped from the U.S. in reels, are cut to
          appropriate lengths.  The posts will be shipped either precut or
          as straight bars to be cut to length in Hong Kong.  A hole is
          drilled into the opposite sides of each pearl.  The posts are
          then inserted through the holes of each pearl and held in place
          by glue.  A strand of gold chain is then laid on each side of a
          row of pearls.  The posts are soldered to the two gold chains.
          Lastly, the two parts of the clasp are attached to either end of
          the chain by means of soldering.  During a telephone conversation
          with a member of my staff, you advised that the posts serve to
          hold the pearls along the length of the chain and keep them
          evenly spaced.  You claim that an allowance in duty should be
          permitted under subheading 9802.00.80, HTSUS, for the cost or
          value of the gold chains, posts, and clasps.












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          ISSUE:

                Whether the gold and pearl bracelets will qualify for the
          partial duty exemption under subheading 9802.00.80, HTSUS, when
          imported into the U.S.

          LAW AND ANALYSIS:

                Subheading 9802.00.80, HTSUS, provides a partial exemption
          from duty for articles assembled abroad in whole or in part of
          U.S. fabricated components, provided the components (a) are
          exported in condition ready for assembly without further
          fabrication; (b) do not lose their physical identity by change in
          form, shape or otherwise, and; (c) are not 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 subheading 9802.00.80,
          HTSUS, 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)

                According to section 10.16(a), Customs Regulations (19 CFR
          10.16(a)), the assembly operations performed abroad may consist
          of any method used to join or fit together solid components.
          Gluing and soldering are specifically enumerated in this
          regulation as acceptable means of assembly.  Thus, the two steps
          of soldering the posts to the gold chains, and the clasps to the
          chains, constitute assembly operations within the meaning of
          subheading 9802.00.80, HTSUS.  In addition, the insertion of the
          posts through the holes of the pearls and the use of glue to hold
          them in place are acceptable assembly operations.

                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 operation.  See 19 CFR 10.16(a).  The process of cutting
          to length wire which is exported in continuous length is
          described in 19 CFR 10.16(b) as an example of an operation
          considered incidental to the assembly process.  Therefore, the
          two steps of cutting the gold chains to appropriate lengths from
          reels, and cutting the posts to length from exported straight
          bars, are operations incidental to the assembly process.  We need
          not discuss whether drilling a hole into the opposite sides of
          each pearl constitutes an operation incidental to the assembly













                                        - 3 -

          process because the pearls, being of foreign origin, will not be
          eligible for an allowance in duty under subheading 9802.00.80,
          HTSUS.

          HOLDING:

                The gold and pearl bracelets will be eligible for the
          partial duty exemption under subheading 9802.00.80, HTSUS, when
          returned to the U.S., upon compliance with the documentary
          requirements of 19 CFR 10.24.  The processes performed in Hong
          Hong on the chains, posts, and clasps are considered acceptable
          assembly operations or operations incidental to the assembly
          process.  Therefore, an allowance in duty is permitted for the
          cost or value of these three U.S. components.  No allowance may
          be made for the cost or value of the pearls which are of foreign
          origin.

                                        Sincerely,



                                        John Durant, Director
                                        Commercial Rulings Division