Applicability of partial duty exemption of item 807.00, TSUS, to certain disposable smocks to be assembled in Mexico

HQ 555049 July 12, 1988 CLA-2 CO:R:C:V 555049DBI CATEGORY: Classification TARIFF NO.: 9802.00.80, HTSUS (807.00, TSUS) Mr. Eduard Braun BMI Healthcare Naco, Arizona 85620-0725 RE: Applicability of partial duty exemption of item 807.00, TSUS, to certain disposable smocks to be assembled in Mexico Dear Mr. Braun: This is in response to your letter of May 19, 1988, to Mr. Herbert Persky of our New York office, in which you request information concerning the applicability of item 807.00, Tariff Schedules of the United States (TSUS), to certain disposable smocks to be assembled in Mexico and imported by your company. Your letter has been referred to this office for review and the preparation of a ruling. FACTS: You advise that the smocks, which are designed to be worn in hospitals, laboratories and other such facilities where sanitation is a necessity, are manufactured of U.S.-made spunbonded polypropylene. Individual parts for the smocks are cut from large bolts into pattern designs. These individual parts will then be sent to Mexico where they will be assembled by either stitching or hot melt adhesive method. The smocks will be packaged in polyethelene bags and then packed into U.S. shipper cartons labeled "U.S. Material/Assembled in Mexico." ISSUE: Whether the described disposable smocks, when returned to the U.S., will be eligible for the partial exemption from duty in item 807.00, TSUS (9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS))? LAW AND ANALYSIS: Item 807.00, TSUS, applies to articles assembled abroad in whole or in part of fabricated components, the product of the U.S., with no operation performed thereon except the attachment of the components to form the imported merchandise, and operations incidental thereto. An article classified under item 807.00, TSUS, is subject to duty upon the full appraised value of - 2 - the imported article, less the cost or value of such products of the U.S. Sections 10.11-10.24, Customs Regulations (19 CFR 10.11-10.24), set forth definitive and interpretive regulations pertaining to the construction of item 807.00, TSUS, and related provisions of law. Section 10.16(a), Customs Regulations (19 CFR 10.16(a)), provides that the assembly operations performed abroad may consist of any method used to join or fit together solid components, such as gluing or sewing, and may be preceded, accompanied, or followed by operations incidental to the assembly as illustrated in paragraph (b) of this section. Although you do not indicate whether or not the hot melt adhesive is of American origin, the adhesive would not be eligible under item 807.00, TSUS, even if the glue was U.S.-made. We have previously held in a ruling dated February 3, 1988 (HQ 554714), that hot melt glue was regarded as having lost its physical identity in the gluing assembly process, which was contrary to the requirements of item 807.00, TSUS. HOLDING: On the basis of the information submitted, we are of the opinion that the stitching or hot melt adhesive processes performed in Mexico constitute an acceptable assembly operation and, therefore, allowances in duty may be made under item 807.00, TSUS, for the cost or value of the disposable smocks, upon compliance with section 10.16, Customs Regulations (19 CFR 10.16). No allowances may be made under item 807.00, TSUS, for the cost or value of the hot melt glue. Sincerely, John Durant, Director Commercial Rulings Division CC: Chief, Commercial Operations Branch 3 New York Seaport 1cc: CO:R:C:V:DIZZO:LDC:7/6/88 Mr. Eduard Braun BMI Healthcare Naco, Arizona 85620-0725