U.S. articles assembled abroad.

N186916 October 28, 2011 CLA-2-98:OT:RR:NC:N4:447  CATEGORY: Classification TARIFF NO.: 9802.00.80  Mr. Quinn O’Rourke LaCrosse Footwear, Inc. 17634 NE Airport Way Portland, OR 97230 RE: U.S. articles assembled abroad.  Dear Mr. O’Rourke:In your letter dated September 22, 2011 you requested a ruling regarding the applicability of heading 9802, Harmonized Tariff Schedule of the United States (HTSUS), to U.S. made outer soles and mid soles used in the assembly and importation of Chinese footwear.You provided two scenarios in which U.S. produced shoe components, i.e. rubber/plastics outer soles and mid soles, are being sent to two different factories in China which you identify as “Factory A” and “Factory B” for further processing. Submitted with your request is a sample of these sole components. With regard to Factory A, you indicate that the U.S. made rubber/plastics outer sole and the U.S. made rubber/plastics mid sole components will merely undergo a gluing assembly and trimming operation in China. You ask whether the rubber/plastics combination outer/midsole part can be considered a U.S. component when returned to the U.S. and therefore qualify for a duty allowance in chapter 98 of the Harmonized Tariff Schedule of the United States (HTSUS). With regard to Factory B, you indicate that the U.S. made rubber/plastics outer sole and the U.S. made rubber/plastics mid sole components, previously glued together by a U.S. manufacturer (now known as the “midsole unit”), will undergo an assembly operation where the midsole unit is attached to a Chinese footwear upper in China. You state that the trimming operation of those components was performed by the U.S. manufacturer and ask whether the rubber/plastics combination midsole unit can be considered a U.S. component when returned to the U.S. and therefore qualify for a duty allowance in chapter 98 of the HTSUS. Subheading 9802.00.80, HTSUS, provides a partial duty exemption for:Articles 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 HTSUS subheading 9802.00.80 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 C.F.R. §10.24). Section 10.16(a), Customs Regulations (19 C.F.R. §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.Operations incidental to the assembly process (such as trimming) 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 HTSUS subheading 9802.00.80 to that component. See, 19 C.F.R. §10.16(c).The attachment of the Chinese made upper to the U.S. made midsole unit by Factory B does constitute an assembly process. Thus, an allowance in duty may be made for the value of the U.S. made rubber/plastics combination midsole unit using 9802.00.80, HTSUS, upon compliance with the document requirements in19 CFR 10.11 – 10.24. The gluing of the U.S. made outer sole to the U.S. made mid sole by Factory A does constitute an assembly process. Thus, an allowance in duty may be made for the value of the U.S. made rubber/plastics combination outer/midsole part using 9802.00.80, HTSUS, upon compliance with the document requirements in19 CFR 10.11 – 10.24. 19 C.F.R. 134.11 states, “every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.” Also, in cases where the finished footwear is fabricated with both U.S. and foreign components and a “Made in the U.S.A.” component statement may be involved, the Federal Trade Commission should address the country of origin marking requirements. The address is Federal Trade Commission, Division of Enforcement, 6th and Pennsylvania Avenue, Washington, D.C. 20508 This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Stacey Kalkines at 646-733-3042.Sincerely, Robert B. Swierupski Director National Commodity Specialist Division