Applicability of partial duty exemption under HTSUS subheading 9802.00.80 to automobile horn switches; inserting; pressing; crimping; snapping; testing

HQ 557599 January 27, 1994 CLA-2 CO:R:C:S 557599 MLR CATEGORY: Classification TARIFF NO.: 9802.00.80 Mr. Philip Freeman Cain Customs Brokers Inc. Progreso International Bridge P.O. Box 10 Progreso, TX 78579 RE: Applicability of partial duty exemption under HTSUS subheading 9802.00.80 to automobile horn switches; inserting; pressing; crimping; snapping; testing Dear Mr. Freeman: This is in reference to your letter of September 24, 1993, requesting a ruling on behalf of NETP, Inc., regarding the applicability of subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), to automobile horn switches. Samples were submitted with your request. FACTS: NETP plans to import automobile horn switches from Mexico, which are designed to fit into steering wheels and are comprised of a left side and a right side. Each side is essentially made the same except that the wires on the right side are somewhat shorter. Submitted with your ruling request are the parts for the left side and a photograph of both left and right sides attached together with a connector. The parts that comprise a switch and their origin are as follows: 1. switch base (Canadian) 2. rivet (Canadian) 3. brown/white wire with terminal (U.S.) 4. solid brown wire with terminal (U.S.) 5. wrap tape (Canadian) 6. popper (Canadian) 7. shell (Canadian) 8. white activator (engager) (Canadian) 9. left switch top (Canadian) The following parts join the left and right sides: 1. terminal (U.S.) 2. connector (U.S.) 3. secondary lock (U.S.) First, the right and left sides are made. The two rivets are inserted into the plastic switch base, the terminals or eyelets of each wire (brown wire and brown and white stripped wire) are placed over the rivets and crimped, and the rivets are fastened down with a riveting machine which attaches the wires to the base. The wire terminals are then wrapped with tape. Next, the base is placed into a fixture and the "popper" is placed inside it, the shell is pressed (snapped) onto the base, the "engager" (also called the "activator") is aligned into the shell, and the plastic cap is snapped on top of the shell. The switch is then tested manually. Second, the left side and right side are connected. The wire from the left and right sides are placed in a brass terminal (right and left brown wire in one side of terminal, right and left brown/white wire in other side), and the wires are fastened into the terminal by a machine that crimps the terminals around the wires. The terminal is then fitted into a connector and held in place with a small plastic "secondary lock". The switches are electrically tested and are then ready for packing. ISSUE: Whether the U.S. components in the switches will qualify for the duty exemption under HTSUS subheading 9802.00.80, when imported into the U.S. LAW AND ANALYSIS: Subheading 9802.00.80, HTSUS, 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 subheading 9802.00.80, HTSUS, 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 welding, soldering, riveting, force fitting, gluing, lamination, sewing, or the use of fasteners. Operations incidental to the assembly process are not considered further fabrication operations, as they are of a minor nature and cannot always be provided for in advance of the assembly operations. See 19 CFR 10.16(a). However, any significant process, operation or treatment whose primary purpose is the fabrication, completion, physical or chemical improvement of a component precludes the application of the exemption under subheading 9802.00.80, HTSUS, to that component. See 19 CFR 10.16(c). In Headquarters Ruling Letter (HRL) 556920 dated January 8, 1993, we held that the operations of slipping seals over wires, crimping terminals on wires, plugging terminated ends into a connector, twisting wires, snapping a secondary lock into a connector, spreading convoluted tubing over wires, and closing tie wraps over convoluted tubing to produce electrical harnesses, were considered acceptable assembly operations pursuant to 19 CFR 10.16(a) for purposes of subheading 9802.00.80, HTSUS. Similarly, in this case, we find that the parts used to produce the switches are properly assembled together within the meaning of subheading 9802.00.80, HTSUS, by being crimped, pressed, snapped, or taped. Furthermore, testing the switches is considered an acceptable incidental operation pursuant to 19 CFR 10.16(b)(7), which states that final calibration and testing are considered operations incidental to assembly. We, therefore, conclude that the processes used to produce the automobile horn switches constitute acceptable assembly operations or incidental operations for purposes of subheading 9802.00.80, HTSUS, and that allowances in duty may be made for the cost or value of all components of U.S. origin. HOLDING: On the basis of the information and samples submitted, we find that the U.S. components in the automobile horn switches do not lose their physical identity in the assembly operation, and are not advanced in value or improved in condition except by assembly operations and operations incidental thereto. Therefore, allowances in duty may be made under subheading 9802.00.80, HTSUS, for the cost or value of the U.S. fabricated components incorporated into the automobile horn switches upon their return to the U.S., provided the documentary requirements of 19 CFR 10.24 are satisfied. Sincerely, John Durant, Director Commercial Rulings Division