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.

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














                                         - 2 -



            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













                                         - 3 -


            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.














                                         - 4 -

                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



















                                          -5-


            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