Applicability of subheading 9802.00.80, HTSUS, to twistedpair electrical conductors; HRL 557513; HRL 556160

HQ 560249 March 4, 1997 CLA-2 RR:TC:SM 560249 BLS CATEGORY: Classification TARIFF NO.: 9802.00.80 Mr. Joe Holquin Import Supervisor Raychem Corporation 300 Constitution Drive Menlo Park, CA 94025-1164 RE: Applicability of subheading 9802.00.80, HTSUS, to twisted pair electrical conductors; HRL 557513; HRL 556160 Dear Mr. Holquin: This is in reference to your letter dated November 25, 1996, requesting a ruling that certain twisted pair electrical conductors to be imported from the United Kingdom will be entitled to an allowance in duty under subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), upon return to the U.S. Samples were submitted with the request. FACTS: Spools of individual strands of insulated electrical conductors of U.S.-origin will be exported to the United Kingdom along with empty reels. The individual strands will be fed into a cabling machine which will cable the individual strands into twisted pair conductors. As the twisted cable comes off the cabling machine it will be spooled onto the reels. The reels will then be exported to the U.S. for final processing. The completed product will be sold to an airline manufacturer. ISSUE: Whether the imported product will qualify for a duty allowance under subheading 9802.00.80, HTSUS, based on the value of the U.S.-origin strands of individual cable exported to the United Kingdom. - 2 - 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 - 3 - 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) 557513 dated January 21, 1996, U.S.-origin stainless steel and galvanized wire was shipped abroad where the wire was put in a twisting machine, resulting in stranded wire containing 7 to 65 strands of individual wire. Some of the stranded wire was retwisted to form a wire rope, and excess wire was then trimmed. Some of the wire also went through an intermediate operation that passed the wire over preforming roller heads in a machine process which shaped the wire into its final form before passing into a finished strand. The wire and wire rope was then packaged and imported into the U.S. In HRL 557513, we held that to the extent the imported product was not preformed abroad, it qualified for a duty allowance under subheading 9802.00.80, HTSUS. However, a duty allowance was not permitted for the stranded wire that was preformed abroad, as that operation was considered to be a further fabrication of the wire independent of the assembly. (See also HRL 556160 dated December 2, 1991, where we held that winding magnet wire around a bobbin, and twisting and securing the wire to the bobbin with tape were considered acceptable assembly operations.) In the instant case, we find that the operations to be performed in the United Kingdom, consisting of feeding the individual strands of wire into a cabling machine and spooling the resulting twisted pair cables onto reels, are acceptable assembly operations. Any trimming of the cables in order to fit the requirements of the spool's capacity would be considered operations incidental to assembly. With respect to the packaging materials (i.e., the reels), if they are of U.S. origin, they will be entitled to duty-free treatment under subheading 9801.00.10, HTSUS. Subheading 9801.00.10, HTSUS, provides for the free entry of products of the U.S. that have been exported and returned without having been advanced in value or improved in condition by any process of manufacture of other means while abroad, provided the documentary requirements of section 10.1, Customs Regulations (19 CFR 10.1), are met. We held in HRL 731806 of November 18, 1988, that - 4 - containers of U.S. origin are entitled to duty-free treatment under subheading 9801.00.10, HTSUS, when returned with their contents. HOLDING: Based on the information submitted, the imported twisted pair conductors will be entitled to entry under subheading 9802.00.80, HTSUS, with an allowance in duty for the value of the U.S.-origin strands of insulated electrical conductor, upon compliance with the documentation requirements of 19 CFR 10.24. The reels will be entitled to duty-free treatment under subheading 9801.00.10, HTSUS, provided they are of U.S.-origin and the documentary requirements of 19 CFR 10.1 are satisfied. A copy of this ruling 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, Tariff Classification Appeals Division