Applicability of subheading 9802.00.80, HTSUS, to electrical switches imported from China

HQ 561390 June 8, 1999 CLA-2 RR:CR:SM 561390 BLS CATEGORY: Classification TARIFF NO.: Subheading 9802.00.80 Port Director 300 S. Ferry Street Los Angeles, California 90731 RE: Applicability of subheading 9802.00.80, HTSUS, to electrical switches imported from China Dear Sir: This is in reference to a letter dated May 12, 1999, on behalf of Ark-Les Corporation, requesting a ruling that certain electrical switches currently entered through the port of Los Angeles are entitled to the partial duty exemption under subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS), upon return from China. FACTS: Ark-Les states that components of U.S.-origin exported to China consists of 1) stamped metal parts (covers, stop plates, contact springs, etc.) of zinc, brass and steel; and 2) plastic molded parts (cases, covers, detents, cams, shafts, etc.) The imported products are electro-mechanical switches (rotary, pushbutton, slide, other). In China, the metal stamped parts are inserted into the pre-molded slots in the plastic molded parts using a hand-operated insertion tool. The remaining metal and plastic parts are assembled by “snapping” into place, or stacking/positioning in the required order. The switch is completed when the plastic housing is “snapped” together, thus securing all of the metal and plastic components into place. The fully assembled switch is electrically tested to ensure that electrical current flows into each of the switches operating positions (i.e., four terminal switch should have positive electrical contact/flow in each of the four positions).  Ark-Les states that most of the components are of U.S.-origin and some are of Chinese origin. The origin of the components can be identified by part number. In addition, the cost of the components can be and is identified on the commercial - 2 - invoices. ISSUE: Whether the electrical switches will be eligible for the partial duty exemption under subheading 9802.00.80, HTSUS, upon importation from China. 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)), provides 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, laminating, sewing, or the use of fasteners. - 3 - We find that the operations performed in China to create the electrical switches, which involves securely joining the fabricated components of U.S. and Chinese origin together by inserting, stacking/positioning, and “snapping” into place, are considered acceptable assembly operations pursuant to section 10.16(a), Customs Regulations (19 CFR 10.16(a)). HOLDING: On the basis of the information presented, it is our opinion that the operations performed to create the electrical switches are acceptable assembly operations within the meaning of subheading 9802.00.80, HTSUS. Therefore, the electrical switches are eligible for the partial duty exemption under that provision, based on the value of the U.S.-origin fabricated components, upon compliance with the documentary requirements of 19 CFR 10.24. Sincerely, John Durant, Director Commercial Rulings Division