Assembly of women's garments; 19 CFR 10.14; Operations incidental to assembly

HQ 558898 March 1, 1995 CLA-2-CO:R:C:S 558898 DEC CATEGORY: Classification TARIFF NO.: 9802.00.80 Mr. Norman Katz Barnes, Richardson & Colburn 475 Park Avenue South New York, New York 10016 RE: Assembly of women's garments; 19 CFR 10.14; Operations incidental to assembly Dear Mr. Katz: This is in response to your October 28, 1994, letter in which you seek a ruling with respect to the eligibility of certain U.S. components assembled in Bangladesh for the partial duty exemption under the Harmonized Tariff Schedule of the United States (HTSUS) subheading 9802.00.80. FACTS: Movie Star, Incorporated (Movie Star) is an importer and domestic manufacturer of women's sleepwear, lingerie, and robes. Movie Star intends to purchase American-formed fabric in the United States and cut the fabric at its plant in the United States into the component parts of the completed garment. The cut component parts will be sent to Bangladesh to be assembled and joined to create the completed garment. The component parts will be sewn together in Bangladesh and the completed garments will be returned to the United States. In order to comply with the laws of Bangladesh, you indicate that the assembler in Bangladesh cannot accept the consignment of the cut parts from Movie Star, but must actually purchase the cut parts in order to import the components. ISSUE: Whether the processing described above with respect to the production of the garments constitutes assembly operations or operations incidental thereto, thereby qualifying the completed articles for a partial duty exemption pursuant to subheading 9802.00.80, HTSUS, notwithstanding the actual sale of the components to the assembler in Bangladesh. LAW AND ANALYSIS: Subheading 9802.00.80, Harmonized Tariff Schedule of the United States (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 United States components assembled abroad, provided the section 10.24, Customs Regulations (19 CFR 10.24), documentary requirements are satisfied. Section 10.14(a), Customs Regulations (19 CFR 10.14(a)), states, in part, that The 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. 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. 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). Section 10.16(a), Customs Regulations (19 CFR 10.16(a)), provides that assembly operations for purposes of subheading 9802.00.80 encompass any method used to join together solid components such as sewing, welding, soldering, riveting, or the use of fasteners and may be accompanied by operations that are incidental to the assembly as provided in section 10.16(b). In this case, you have indicated that all the components of the finished garment that are sent to Bangladesh for assembly are of United States origin. The assembly process consists of sewing and joining component pieces together. Therefore, the United States components assembled abroad are entitled to an allowance in duty, under subheading 9802.00.80, HTSUS, upon compliance with the documentary requirements of 19 CFR 10.24. HOLDING: Since the United States components are exported in condition ready for assembly without further fabrication, do not lose their physical identities in the assembly operation, and are not advanced in value or improved in condition except by the assembly or operations incidental thereto, they will qualify for allowances in duty under subheading 9802.00.80, HTSUS, provided the documentary requirements of 19 CFR 10.24 are met. The sale of the U.S. components to the assembler in Bangladesh has no bearing on the eligibility of the returned assembled articles for the subheading 9802.00.80, HTSUS, partial duty exemption. A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction. Sincerely, John Durant Director, Commercial Rulings Division