HQ 556539: Applicability of duty exemption under subheading 9802.00.80, HTSUS, to certain U.S.-manufactured components exported to Mexico for assembly into switches

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 556539

                         April 15, 1992

CLA-2 CO:R:C:S 556539 RAH

CATEGORY:  Classification

TARIFF NO.: 9802.00.80

Mr. Philip Freeman
Cain Customs Brokers 
421 Texano
P.O. Box 150
Hidalgo, TX  78557

RE: Applicability of duty exemption under subheading 
    9802.00.80, HTSUS, to certain U.S.-manufactured 
    components exported to Mexico for assembly into switches 

Dear Mr. Freeman:

     This is in response to your letter dated February 21, 1992,
requesting a ruling under subheading 9802.00.80, Harmonized
Tariff Schedule of the United States (HTSUS), for certain
U.S.-manufactured components which are exported to Mexico for
assembly into switches.  As requested, we are returning the
samples which were forwarded for our review.

FACTS:

     You state that your client intends to import from Mexico
Class 45 Switches which are used in the operation of air
conditioning, heating, welding, data processing, and
refrigeration equipment.  The following U.S.-manufactured
components are exported to Mexico to be assembled into the
switches:

PART NUMBER                             PART NAME
D35082-001                              Cover
D26183-001                              Crossarm
D73307-001                              Arc Box
D26206-001                              Magnet
D55079-001                              Frame
D26386-001                              Screw
D26189-001                              Terminal
D26192-001                              Clip
D26187-001                              Spring







                             - 2 -

S00263-007                              Screw
D26208-001                              Kick Out Spring
S00263-006                              Screw
D25254-001                              Double Quick Connect
D26234-001                              Terminal
S00211-006                              Screw
D26190-001                              Movable Contact
S00133-004                              Rivet
D55080-002                              Coil
D27504-001                              Armature
D25983-424                              Nameplate
D26207-009                              Nameplate
D25983-391                              Nameplate

     In Mexico, the assembly is completed in five operations
which are described as follows:

     Crossarm Assembly
     Clip is placed in armature holes.  Armature is put into
     crossarm.

     Contact Board Rivet Assembly
     Place stationary terminals on riveting fixture upside
     down.  Place arc box upside down on fixture.  Position
     these parts under riveter in fixture, rivet 2 rivets,
     reposition and rivet 2 other rivets.

     Power Screw Assembly
     Place riveted contact boards on screw-driving fixture. 
     On some models, place quick connects on fixture.  Place
     screws in boards and drive with power driver. 

     Contact Board Assembly
     Place crossarm assembly in contact board.  Place
     movable contacts in crossarm assembly.  Position 2
     springs and insert between crossarm and movable contact
     using insertion tool.  Apply labels to board.

     Final Build
     Place magnet in frame.  Place coils in magnet slots. 
     Place kickout springs on coil nibs.  Snap board
     assembly onto coil.  Place board assembly onto frame. 
     Turn assembly upside down, position 2 screws and drive
     into frame.  Tap bottom of frame on table to be sure of
     tight fit, inspect. 

ISSUE:

     Whether the Class 45 Switches will be eligible for the
partial duty exemption under subheading 9802.00.80, HTSUS, upon
importation into the United States.
                             - 3 -

LAW AND ANALYSIS:

     All articles imported into the U.S. are subject to duty
unless specifically exempted therefrom under the HTSUS.

     Subheading 9802.00.80, HTSUS, provides a partial duty
exemption for:

     [a]rticles assembled abroad in whole or in part of
     fabricated components, the product of the United
     States, which (a) were exported in condition ready for
     assembly without further fabrication, (b) have not lost
     their physical identity in such articles by change in
     form, shape, or otherwise, and (c) 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,
     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 this tariff provision is subject to duty
upon the full cost or value of the imported assembled article,
less the cost or value of the U.S. components assembled therein,
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 in part that:

     [t]he 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,
lamination, sewing, or the use of fasteners. 

     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 operations.  However, any significant process, operation
or treatment whose primary purpose is the fabrication,
completion, physical or chemical improvement of a component
precludes the application of the exemption under subheading
9802.00.80, HTSUS, to that component.  See, 19 CFR 10.16(c).






                             - 4 -

     In Headquarters Ruling Letter (HRL) 555533 dated June 4,
1990, we held that U.S.-manufactured parts assembled abroad into
starter solenoid switches which provide electrical energy to
starters on automobile engines qualify for a partial duty
allowance under subheading 9802.00.80, HTSUS.  That assembly
operation included, inter alia, force fitting, punching,
screwing, riveting, pressing and snapping components together,
enclosing components within other components, stacking components
together and testing the switch for electrical charge.  Moreover,
we have also held that U.S. components assembled abroad into
electronic relay switches by riveting, winding, taping, soldering
in position, staking and welding qualify for the duty exemption
under subheading 9802.00.80, HTSUS.  HRL 067356 dated August 13,
1981.

     The assembly in the instant case includes fitting parts
together, riveting, screwing, snapping parts together, and
applying a label.  We find that these operations clearly fall
within the purview of an acceptable assembly as outlined in the
Customs Regulations (19 CFR 10.16(a)), and prior rulings (555533,
supra, and 067356, supra).  We further find that all three
requirements of subheading 9802.00.80, HTSUS, have been satisfied
and that the Class 45 Switches are entitled to a partial duty
exemption under that subheading, upon importation into the United
States.

HOLDING:

     The Class 45 Switches will be eligible for the partial duty
exemption under subheading 9802.00.80, HTSUS, upon importation
into the United States.  The U.S.-manufactured components are
exported to Mexico in condition ready for assembly without
further fabrication, do not lose their physical identity in such
articles by change in form, shape, or otherwise, and are not
advanced in value or improved in condition abroad except by being
assembled.  Therefore, allowance in duty may be made under this
tariff provision for the cost or value of the U.S.-made
components, upon compliance with the documentation requirements
of 19 CFR 10.24.    

                                   Sincerely,



                                   John Durant, Director
                                   Commercial Rulings Division