Classification of sponge sticks from Mexico

HQ 556115 October 8, 1991 CLA-2 CO:R:C:S 556115 DSN CATEGORY: Classification TARIFF NO.: 3926.90.90; 9802.00.80 Ms. Elva Arzate Account Manager Rudolph Miles & Sons, Inc. 4950 Gateway East P.O. Box 144 El Paso, Texas 79942 RE: Classification of sponge sticks from Mexico Dear Ms. Arzate: This is in response to your letter of March 15, 1991, on behalf of Professional Medical Products, Inc., concerning certain sponge sticks imported from Mexico. You specifically request a ruling on the classification of the articles under the Harmonized Tariff Schedule of the United States (HTSUS), and the applicability of country of origin marking requirements to the sponge sticks. Due to the fact that the sponge sticks are composed of U.S.-origin components which are assembled abroad, we will also address in this ruling the applicability of subheading 9802.00.80, HTSUS. FACTS: The articles in question are sponge sticks which are used in the preparation of patients for surgery and other medical procedures. The sponge sticks consist of rectangular blocks of foamed plastic material and plastic sticks. The sponges are approximately 2 1/4 inches long and one inch wide. The plastic sticks are approximately eight inches long and 3/4 inch wide. A representative of Rudolph Miles advised a member of my staff by telephone that the sponges are cut to shape and slit for insertion of the sticks prior to exportation from the U.S. The sticks and the plastic sponges are then sent to Mexico where the sponges are glued to one end of the plastic sticks. The sponge sticks are then imported into the U.S. and placed in plastic pouches and impregnated with an iodine solution. The pouches are then sealed. ISSUES: 1. What is the appropriate classification of the sponge sticks? 2. Whether the sponge sticks qualify for the partial duty exemption available under HTSUS subheading 9802.00.80 when returned to the U.S. 3. Whether the sponge sticks will be eligible for an exemption from country of origin marking requirements. LAW AND ANALYSIS: ISSUE 1 The classification of merchandise under the HTSUS is governed by the General Rules of Interpretation ("GRIs"). GRI 1, HTSUS, states, in part, that "for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes..." Heading 3926 describes "Other articles of plastics and articles of other materials of headings 3901 to 3914..." The sponge stick consists of a foamed plastic sponge and a plastic stick. There are no provisions which specifically describe these items, nor is there a provision which describes the two items when combined as a sponge stick. Both the sponge and the stick are best described by heading 3926. Since heading 3926 covers both components of the sponge stick, the sponge stick is properly classified under heading 3926, in accordance with GRI 1. ISSUE 2 HTSUS subheading 9802.00.80 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. All three requirements of HTSUS subheading 9802.00.80 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 value of the imported assembled article, less the cost or value of such U.S. components, 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 operations performed abroad may consist of any method used to join or fit together solid components, such as welding, soldering, riveting, force fitting, gluing, laminating, sewing, or the use of fasteners. The operation to be performed in Mexico, resulting in securely joining the sponges and sticks together by gluing is considered an acceptable assembly operation pursuant to the above-cited regulation. Therefore, the sponge sticks will qualify for the partial duty exemption under subheading 9802.00.80, HTSUS. ISSUE 3 Finally, you request an exception from marking the country of origin on the imported product in accordance with section 134.35, Customs Regulations (19 CFR 134.35). Under this provision, a U.S. manufacturer or processor who converts the imported article into an article with a new name, character or use (i.e., subjects the imported article to a substantial transformation), is considered to be the ultimate purchaser. In such circumstances, the imported article is excepted from individual marking and marking of the container is sufficient. In this case, you have not provided enough information about the U.S. processing operations to determine the applicability of section 134.35. Specifically, we would need a complete description of the domestic processing operations, the purpose of the domestic operations, the time and skill involved, and the costs attributable to both the foreign and domestic operations. If you would like a ruling on the marking question, this information should be submitted to the Value and Marking Branch, at Customs Headquarters. HOLDING: The sponge sticks are properly classified under subheading 3926.90.90, HTSUS, which provides for "other articles of plastics and articles of other materials of headings 3901 to 3914...other...other," dutiable at the rate of 5.3 percent ad valorem. On the basis of the information provided, it is our opinion that the gluing operation performed on the U.S. components is a proper assembly operation pursuant to subheading 9802.00.80, HTSUS. Therefore, an allowance in duty may be made under this tariff provision for the cost or value of the sponges and sticks upon compliance with the documentary requirements of 19 CFR 10.24. Sincerely, John Durant, Director Commercial Rulings Division