Applicability of partial duty exemption under subheading 9802.00.80, HTSUSA, to a 35mm camera from China; HRL 555533; 19 CFR 10.14, 10.16

HQ 556469 June 10, 1992 CLA-2 CO:R:C:S 556469 SER CATEGORY: Classification TARIFF NO.: 9802.00.80 M. Barry Levy, Esq. Sharrets, Paley, Carter & Blauvelt 67 Broad Street New York, NY 10004 RE: Applicability of partial duty exemption under subheading 9802.00.80, HTSUSA, to a 35mm camera from China; HRL 555533; 19 CFR 10.14, 10.16 Dear Mr. Levy: This is in reference to your letters of December 31, 1992, and May 6, 1992, on behalf of Concord Camera Corp., concerning the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), to cameras assembled in China. FACTS: The merchandise at issue is a single lens 35mm camera, Model No. 500, which will be produced from 111 U.S. component parts, in China. The assembly procedure is stated to consist of a main assembly procedure and four subassembly operations. The four subassembly operations involve: 1) the gear deck subassembly; 2) the lens subassembly; 3) the film door subassembly; and 4) the battery door subassembly. These sub- assembly operations involve simple joining of fitted parts; the application of small screws, springs and adhesive tapes; soldering; wire dressing; and cold staking components together. Cold staking is a form of force fitting which joins components. The main assembly operation is a 35-step procedure which primarily involves the camera subassemblies being joined together by the same methods identified above in regard to the subassemblies. ISSUE: Whether the cameras made from U.S. components will qualify for the partial duty exemption available under subheading 9802.00.80, HTSUSA, when imported into the U.S. n -2- LAW AND ANALYSIS: Subheading 9802.00.80, HTSUSA, 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, lubrication, and painting. All three requirements of subheading 9802.00.80, HTSUSA, 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 gluing, laminating, welding, soldering, riveting, force fitting, sewing, or the use of fasteners. Operations incidental to the assembly process are not considered further fabrication operations, as they as of a minor nature and cannot always be provided for in advance of the assembly operations. Examples of operations which are incidental to the assembly process include trimming, filing, or cutting off of small amounts of excess materials, and adjustments in the shape or form of a component to the extent required by the assembly being performed abroad. See, section 10.16(b), Customs Regulations (19 CFR 10.16(b)). However, any significant process, operation or treatment whose primary purpose is the fabrication,n-3- completion, physical or chemical improvement of a component precludes the application of the exemption under subheading 9802.00.80, HTSUSA, to that component. See, section 10.16(c), Customs Regulations (19 CFR 10.16(c)). It is our opinion that the U.S. components exported for assembly into the cameras meet the requirements of subheading 9802.00.80, HTSUSA. The primary operations performed in China, involving soldering, wire dressing, soldering, screwing, and cold staking, are considered acceptable assembly operations pursuant to 19 CFR 10.16(a). See also, Headquarters Ruling Letter (HRL) 555533 dated April 11, 1990. Furthermore, the operations whereby certain plastic or metal components are manipulated for easier joining are considered an allowable procedure incidental to assembly pursuant to 19 CFR 10.16(b)(5), which provides for an adjustment in the shape or form of a component to the extent required by the assembly being performed abroad as long it is minor in nature. In addition, the operation whereby a sink contact is staked into the camera body and is split in two in the process, is also an acceptable incidental operation under 19 CFR 10.16(b)(5). HOLDING: On the basis of the information submitted, the U.S. components meet the requirements of subheading 9802.00.80, HTSUSA. They are exported in condition ready for assembly without further fabrication pursuant to the Customs Regulations. The primary operations are considered acceptable assembly operations pursuant to 19 CFR 10.16(a), and several minor non- assembly operations constitute operations incidental to assembly pursuant to 19 CFR 10.16(b). Therefore, allowances in duty may be made under subheading 9802.00.80, HTSUSA for the cost or value of the U.S.-origin components used in the assembly of the cameras, provided that the proper documentation requirements of 19 CFR 10.24 are satisfied. Sincerely, John Durant, Director