The tariff classification of a sub-main board manufactured in the United States and assembled into an electronic musical instrument in Hong Kong.

NY 806039 February 10, 1995 CLA-2-98:S:N:N3:227 806039 CATEGORY: Classification TARIFF NO.: 9802.00.80 Mr. Raymond Wilkens Expeditors Int'l. of Washington, Inc. 150-10 132nd Avenue Jamaica, NY 11454 RE: The tariff classification of a sub-main board manufactured in the United States and assembled into an electronic musical instrument in Hong Kong. Dear Mr. Wilkens: In your letter received in this office on January 19, 1995, on behalf of your client, Lonestar Technologies, Ltd., you requested a tariff classification ruling. Sample is being returned as requested. The merchandise at issue is a sub-main board which is a four-layer printed circuit board with mixed surface mount and through-hole parts placement. It is stated to be used only for musical sound generation in the "Key", which is an interactive multi media musical instrument that was ruled upon in NYR 894948 dated March 23, 1994. The components of the sub-main board was designed and produced by the following: a) the electronic circuitry on the board was designed by Mondo Technology of Santa Barbara, California; b) the layout of the board, where the electronic design is reduced to photographic artwork for manufacture, was accomplished by CADD of Santa Barbara; c) the bare boards, themselves, were produced entirely by Paragon Circuits of Santa Clara, California; d) the components that comprise the actual electronics (i.e. integrated circuits, resistors, capacitors and connectors) of the sub-main board are provided by SMC of Hong Kong and are manufactured in various parts of the Far East. It is stated that all of the components are placed appropriately onto the bare printed circuit boards and soldered in place by MTI of Newbury Park, California and then after passing the testing requirements, the boards are shipped to SMC of Hong Kong where no further work of any kind is performed on them. Thereafter, the sub-main boards are plugged into the main and jack boards of otherwise completed "Keys" using connectors provided on each for that purpose. You claim that the sub-main board should be eligible for an exemption of duty under subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTS), which provides for articles, except goods of heading 9802.00.90, 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 in 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. It has been determined that through the insertion and soldering processes of the foreign and U.S. components, with a substantial degree of permanence and dedication attached to the overall integrated pattern of the subject merchandise, these components have undergone a substantial transformation, thereby producing a new article of commerce. Since the interim operations done in the United States were sufficient to have transformed the foreign components into a domestic product (the sub-main board) which, when inserted into the final unit (the "Key"), meets the above criteria for an assembly operation, allowances may be made for their value under subheading 9802.00.80, HTS, upon compliance with the applicable regulations. This ruling is being issued under the provisions of Section 177 of the Customs Regulations (19 C.F.R. 177). A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is imported. 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, Jean F. Maguire Area Director ew York Seaport