Roadway Pavement Markers; Section 516 Petition

HQ 088285 April 18, 1991 CLA-2 CO:R:C:F 088285 SLR CATEGORY: Classification TARIFF NO.: 3926.90.90; 9802.00.80 Paul S. Anderson, Esq. Sonnenberg, Anderson, O'Donnell & Rodriguez 200 West Adams Street Suite 2625 Chicago, IL 60606 RE: Roadway Pavement Markers; Section 516 Petition Dear Mr. Anderson: This is in response to your request for information filed pursuant to Section 516, Tariff Act of 1930 as amended (19 USC 1516) and 19 CFR Section 175.1, et seq. The request, submitted on behalf of your client, the Stimsonite Corporation, concerns the tariff classification of certain reflective and non-reflective roadway pavement markers. FACTS: Reflective Roadway Pavement Markers The reflective roadway pavement markers consist of a plastic housing shell with acrylic lenses on either side of the product. Originally, the acrylic lenses were manufactured in the U.S., exported abroad for assembly (through welding) onto plastic housing shells of foreign origin, then exported to the U.S. for final finishing. The entire shell (housing device and lenses) is now manufactured abroad. The markers assembled with U.S. components were entered under HTSUSA subheadings 3926.90.90 and 9802.00.80 -- the former providing for other articles of plastics, other, dutiable at 5.3 percent, the latter allowing for a partial duty exemption for American components assembled within an imported product. Those wholly manufactured abroad have entered under subheading 3926.90.90. -2- Non-Reflective Roadway Pavement Markers The non-reflective markers consist of a plastic housing shell without the acrylic reflective lenses. They are wholly manufactured abroad and arrive in the U.S. for final finishing. They have entered under subheading 3926.90.90. ISSUES: Whether the pavement markers were properly classified as other articles of plastic in heading 3926. Whether the reflective lenses were eligible for the partial duty exemption under subheading 9802.00.80. LAW AND ANALYSIS: Classification of merchandise under the Harmonized Tariff Schedule is in accordance with the General Rules of Interpretation (GRI's), taken in order. GRI 1 provides that classification begins by examining the terms of the headings and any relative section or chapter notes. No heading within the Nomenclature specifically provides for roadway pavement markers. Heading 3926, HTSUSA, however, does provide for other articles of plastic. As the reflective and non-reflective pavement markers are made of plastic components, they are classifiable as other articles of plastic in heading 3926. Subheading 9802.00.80, HTSUSA, provides a partial duty exemption for: Articles 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 of the above-mentioned requirements must be satisfied before a component may receive a duty allowance. An article entered under subheading 9802.00.80 is subject to duty upon the full value of the imported assembled article less the cost or value of such U.S. components. -3- The acrylic relective lenses exported for assembly met requirements (a) and (b). Moreover, as section 10.16(a), Customs Regulations (19 CFR 10.16(a)), considers welding a proper assembly operation, requirement (c) has been satisfied. The lenses, therefore, appropriately qualified for the partial duty exemption under subheading 9802.00.80. HOLDING: The reflective and non-reflective markers were properly classified in subheading 3926.90.90, HTSUSA, the provision for other articles of plastics, other, dutiable at 5.3 percent ad valorem. The acrylic lenses exported abroad for assembly were entitled to the partial duty exemption under subheading 9802.00.80, HTSUSA. Hence, Customs appropriately reduced the duties assessed the markers by the cost or value of the lenses incorporated therein. This represents the official position of the Customs Service. If you wish to challege this decision, you may do so by filing a petition pursuant to sections 175.11-12 of the Customs Regulations (19 CFR 175.11-12). Sincerely, John Durant, Director Commercial Rulings Division