Whether computer keyboards and printed circuit board assemblies upon return to the US from Mexico qualify for partial duty exemption under 9802.00.50, HTSUS

NY L83879 May 9, 2005 CLA-2-84:RR:NC:N1:120 L83879 CATEGORY: Classification TARIFF NO.: 8471.60.2000, 9802.00.50 Mr. Brian Johnson KeyTronic Corporation 4424 N. Sullivan Road Spokane, WA 99216 RE: Whether computer keyboards and printed circuit board assemblies upon return to the US from Mexico qualify for partial duty exemption under 9802.00.50, HTSUS Dear Mr. Johnson: In your letter dated April 4, 2005 you requested a tariff classification ruling under 9802.00.5060, HTSUS, concerning computer keyboards and printed circuit board assemblies for printers imported to the US, exported to Mexico and returned to the US. The computer keyboards were imported into the US under subheading 8471.60.2000 and the printed circuit board assemblies (PCB) were imported under subheading 8473.30.1080. Computer keyboards imported to the US are exported to Mexico to be relabeled with new part numbers, UPC labels, repacked and reimported to the US for delivery. Occasionally the PCAs are imported to the US damaged, thus they may be exported to Mexico for cleaning/sorting/testing and repackaging before being reimported to the US for delivery. Articles exported from and returned to the U.S., after having been advanced in value or improved in condition by repairs or alterations in Mexico, may qualify for duty exemption under the Harmonized Tariff Schedule of the United States (HTSUS) subheading 9802.00.50 provided the foreign operation does not destroy the identity of the exported articles or create new or commercially different articles through a process of manufacture. The Customs regulations which implement the North American Free Trade Agreement (NAFTA) are contained in title 19 C.F.R. Part 181. Section 181.64(a) defines "repairs or alterations" for purposes of NAFTA as follows: "repairs or alterations" means restoration, addition, renovation, redyeing, cleaning, resterilizing, or other treatment which does not destroy the essential characteristics of, or create a new or commercially different good from, the good exported from the United States. HRL 555806 dated January 14, 1991 held that foreign repacking of merchandise for retail sale would not, in and of itself, preclude tariff treatment under subheading 9802.00.50, HTSUS. Headquarters Ruling Letter (HRL) 555180 dated December 26, 1989. However, to qualify for a partial duty exemption under that subheading, the article itself must be advanced in value or improved in condition. In that regard, Customs has held that the mere repacking of an article does not advance its value or improve its condition. In the manner described in Section 181.64(a), cleaning constitutes an alteration, thereby entitling the returned printed circuit board assemblies for printers to the partial duty exemption under subheading 9802.00.50, HTSUS. Based on the provided information regarding computer keyboards, the re-labeling and repackaging performed in Mexico does not advance the value or improve in condition by repairs or alterations, thereby the computer keyboards do not qualify for 9802.00.5060. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Denise M. Faingar at (646) 733-3010. Sincerely, Robert B. Swierupski Director, National Commodity Specialist Division