Applicability of HTSUS subheading 9802.00.80 tariff treatment to blood filtering apparatus components disconnected prior to assembly

HQ 555649 August 3, 1990 CLA-2 CO:R:C 555649 RA CATEGORY: Classification TARIFF NO.: 9802.00.80 Mr. William L. Dickey, Esq. 1555 Connecticut Avenue, N.W. Suite 308 Washington, D.C. 20036 RE: Applicability of HTSUS subheading 9802.00.80 tariff treatment to blood filtering apparatus components disconnected prior to assembly Dear Mr. Dickey: This is in response to your letter of April 12, 1990, on behalf of the Asahi Medical Company of Tokyo, Japan, requesting a ruling on the application of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to component collection bags connected by plastic tubing which is cut before being reassembled. FACTS: Your client desires to export to Japan certain U.S.-made plastic collection bags which will be assembled with a foreign-made blood filtering apparatus. During assembly, the plastic tubing connecting the bags when exported from the U.S. is cut and the collection bags are joined by other tubing to the Japanese-produced plasma filter to complete the imported filtering apparatus. You ask whether the cutting and joining operations performed on the tubing attached to the U.S.-made collection bags will preclude the partial duty exemption under the provisions of subheading 9802.00.80, HTSUS. ISSUE: Can the cutting of tubing connecting U.S.-made collection bags prior to their joinder with foreign-produced filters be considered as an operation incidental to the assembly process under subheading 9802.00.80, HTSUS? - 2 - LAW AND ANALYSIS: 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. Section 10.16(a), Customs Regulations (19 CFR 10.16(a)), states that the assembly operations may consist of any method used to join or fit together solid components and may be preceded, accompanied, or followed by operations incidental to the assembly process. However, 19 CFR 10.16(c) provides that any significant process, operation, or treatment other than assembly whose primary purpose is the fabrication, completion, or physical or chemical improvement of a component shall not be regarded as incidental to assembly and shall preclude the application of the exemption to such component. The separation of the collection bags by the cutting of the tubing which held them together in order to prevent a mix- up of the set is not considered to be a manufacture or the fabrication of a component, which is precluded by the regulations. The cutting operation serves only to separate completed products and not to improve them in condition. In U.S. v. Texas Instruments, Inc., 64 CCPA 24, C.A.D. 1178, 545 F. 2d 739 (1976), the scoring and breaking of silicon slices to separate individual transistor chips prior to assembly was held to be an incidental assembly operation. Following this judicial decision, we ruled in a letter dated February 21, 1990 (555213), and published as C.S.D. 90-58, that separating paper cards and attachments along pre-cut lines and disposing of the excess material may be considered incidental to the assembly process and would not render the assembled cards ineligible for subheading 9802.00.80, HTSUS, treatment. HOLDING: The cutting of plastic tubing connecting U.S.-made collection bags in order to separate these components prior to assembly with foreign-made parts of a blood filtering device - 3 - is considered to be incidental to the assembly process and will not preclude tariff treatment of the U.S.-made components under subheading 9802.00.80, HTSUS, assuming compliance with documentation requirements of section 10.24, Customs Regulations (19 CFR 10.24). Sincerely, John Durant, Director Commercial Rulings Division lw:7/30/90