HQ 554949: Applicability of the partial duty exemption in subheading 9802.00.50, HTSUS, to the proposed importation of rope and twine from Mexico.

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 554949

                        December 28, 1989

CLA-2 CO:R:C:V 554949 KAC

CATEGORY:    Classification

TARIFF NO.:  9802.00.50

John P. Donohue, Esq.
Donohue & Donohue
Fifth Floor, The Bank Building
421 Chestnut Street
Philadelphia,  Pennsylvania  19106

RE:  Applicability of the partial duty exemption in subheading
     9802.00.50, HTSUS, to the proposed importation of rope and
     twine from Mexico.

Dear Mr. Donohue,

     This ruling is in response to your letter dated December 18,
1987, to the Regional Commissioner of Customs, New York Region,
on behalf of American Manufacturing Company, regarding the
applicability of the partial duty exemption in subheading
9802.00.50, Harmonized Tariff Schedule of the United States
(HTSUS), to the proposed importation of rope and twine from
Mexico.  Regarding your reference to item 806.20, Tariff
Schedules of the United States (TSUS), as you are aware,
effective January 1, 1989, the HTSUS superseded and replaced the
TSUS.  TSUS item 806.20 was carried over into the HTSUS as
subheading 9802.00.50.  Your samples and ruling request were
forwarded to this office for a direct response.  We regret the
delay in responding to your request.

FACTS:

     Rope and twine manufactured by your client in the U.S. in
varying diameters will be shipped to Mexico in bulk lengths
ranging from 1,000 - 10,000 feet.  In Mexico, the American-made
rope is measured and cut into lengths of 25 - 100 feet. The
twisted rope is taped at the end to prevent unravelling, whereas
the braided rope is not.  The rope is then packaged for retail
sale.

     Some of the rope will go through a "manual" eyesplicing
process before packaging.  The eyesplicing process involves
taking one end of the rope and forming a loop at the end by
braiding the end of the rope around itself to form an eye.  This
type of rope is traditionally used for boat-mooring.

     The packaging process will vary depending upon the type of
rope.  The smaller diameter rope, 3/16 inch, is placed into a bag
to which product information is added.  The bag is then heat-
sealed and ready for shipment.  The larger diameter rope, 1/4
inch and 3/8 inch, is handled identically except that, before
packaging, a thin paper-coated gauge wire is wrapped around two
separate sections of the coiled rope.  The largest diameter
rope, 1/2 inch, is wound around a cardboard coilette and bound
with a thin paper-coated gauge wire.

     The 1/8 inch diameter twine is exported to Mexico in cones
where it is cut to shorter lengths and rewound around smaller
cones or in a coreless ball.  The ball of twine is then labeled
and heat-sealed in a thin plastic wrapper.

     After retail packaging, the rope and twine are imported into
the U.S.

ISSUE:

     Whether the operations to be performed on the American rope
and twine in Mexico will entitle the merchandise to the partial
duty exemption in subheading 9802.00.50, HTSUS, when returned to
the U.S.

LAW & ANALYSIS:

     Under subheading 9802.00.50, HTSUS, articles exported for
repairs or alterations and returned, will be assessed duty on the
value of the repairs or alterations performed abroad.  In
interpreting the term "repairs or alterations" in item 806.20,
TSUS, the court in Dolliff & Company, Inc. v. United States, 66
CCPA 77, 1225 (1979), enunciated the principle that repairs and
alterations are made to completed articles and do not include
intermediate or finishing operations performed as a matter of
course on unfinished goods.

     We have previously ruled that the cutting to length and
packaging of products can be considered alterations within the
meaning of the tariff provision.  However, in situations where
rolls of material-length merchandise are exported and finished
goods are returned merely by cutting to length, this cutting
constitutes a finishing step in the manufacture of the goods.
The conversion from material lengths to finished products exceeds
the meaning of the term "alterations" under this tariff
provision.  However, the cutting of merchandise from a long
material length to a shorter material length without
manufacturing a finished good does fall within the meaning of
"alterations" in subheading 9802.00.50, HTSUS.  See, Headquarter
Ruling Letters 554736 dated February 16, 1988,  554174 dated
April 25, 1989, 074389 dated July 25, 1984, 555411 dated August
11, 1989, and 071475 dated September 20, 1983.  As it appears


that the rope and twine in this case are merely cut to shorter
material lengths in Mexico, we believe that the cutting, taping
and packaging operations performed in Mexico constitute
alterations within the meaning of subheading 9802.00.50, HTSUS.

       Application of subheading 9802.00.50, HTSUS, is precluded
in circumstances where the operation performed abroad results in
a new or commercially different article with a set of new and
different characteristics and uses, or when the foreign operation
constitutes a part of a manufacturing process begun in the U.S.
The eyesplicing operation performed in Mexico constitutes a
finishing step in the manufacture of the completed imported
product.  Eyesplicing is a manufacturing process which
transforms the rope from a multiple use product to a product that
is traditionally used for boat mooring.

HOLDING:

     On the basis of the information and samples submitted, we
find that the foreign cutting, taping and packaging operations
performed in Mexico constitute alterations within the meaning of
subheading 9802.00.50, HTSUS. However, the eyesplicing operation
serves as a finishing process which disqualifies the affected
rope from subheading 9802.00.50, HTSUS, consideration.
Therefore, the returned rope and twine which does not undergo the
eyesplicing process will be assessed duty on the value of the
alterations performed in Mexico.

                                   Sincerely,




                                   John Durant
                                   Director, Commercial
                                   Rulings Division

cc:  Assistant Area Director, NIS
     (827376)