Source: https://www.customsmobile.com/rulings/docview?doc_id=HQ%20560609&highlight=8533.10.00%2A
Timestamp: 2020-02-21 02:54:45
Document Index: 701680287

Matched Legal Cases: ['§10', '§10', '§10', '§10', '§10', '§10', '§10', '§102', '§102', '§102', '§102', '§ 102', '§ 102', '§ 102', '§102', '§102', '§102', '§181', '§10']

Customs Ruling HQ 560609 - Applicability of the partial duty exemption pursuant under HTSUS subheading 9802.00.80 to coaxial attenuators processed in Mexico; eligibility for preferential NAFTA treatment
Related: 555553; 556974
This is in response to your letter dated July 31, 1997, on behalf MCE Manufacturing Corporation, (hereinafter MCE) concerning the eligibility for a partial duty exemption under subheading 9802.00.80, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), for fixed coaxial attenuators imported from Mexico. In addition, you also inquire about whether the attenuators would qualify for preferential tariff treatment under the North American Free Trade Agreement (NAFTA). You made a supplemental submission dated August 22, 1997. The submission contained copies of manufacturers’ affidavits, which indicate that the components for the attenuators were manufactured in the United States.
1) A coupling nut spring is placed around the slot in the plug body and a rubber gasket is slipped onto the “pin end” of the plug body. The coupling nut is placed in a fixture threaded end down. The plug body is then placed threaded side up into
You have also submitted 12 affidavits from the manufacturers of the components that make up the attenuators. In the affidavits, the manufacturers certify that the components were manufactured at facilities located in the United States. ISSUES:
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 gluing, laminating, welding, soldering, riveting, force fitting, 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 for in advance of the assembly operations. Examples of operations which are incidental to the assembly process include trimming, filing, or cutting off of small amounts of excess materials. See, Section 10.16(b), Customs Regulations (19 C.F.R. §10.16(b)). 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, Section 10.16(c), Customs Regulations (19 C.F.R. §10.16(c)).
The operations described above performed in Mexico which result in securely joining components together by inserting, force fitting, snapping, pressing, screwing, and tightening are considered acceptable assembly operations pursuant to 19 C.F.R. §10.16(a). Applying loctite to the threads of the connectors where the barrel and connectors meet is also an acceptable operation pursuant to 19 C.F.R. §10.16(a). See HRL 555553 dated April 11, 1990. In addition, the checking to make sure that the components function smoothly and that the radio frequency is correct are considered to be operations incidental to assembly pursuant to 19 C.F.R. §10.16(b)(7). See HRL 556974 dated February 17, 1993. Moreover, pursuant 10.16(f), packing the attenuators for shipment is a permissible operation, which will not disqualify the attenuators from the partial duty exemption under subheading 9802.00.80, HTSUS. Consequently, the attenuators may enter the U.S. under subheading 9802.00.80, HTSUS, with allowances in duty for the cost or value of the U.S. components therein, provided the documentary requirements of 19 C.F.R. §10.24 are satisfied.
NAFTA Preferential Tariff Treatment The second issue which you raise is whether the imported attenuators are entitled to preferential tariff treatment under North American Free Trade Agreement (NAFTA). General Note 12, HTSUS provides in pertinent part that:
(i) mineral goods extracted in the territory of one or more of the NAFTA parties;... (x) goods produced in the territory of one or more of the NAFTA parties exclusively from goods referred to in subdivisions (n)(i) through (ix), inclusive, or from their derivatives, at any stage of production.
(ii)	Goods that originate in the territory of a NAFTA party under subdivision (b) of this note and that qualify to be marked as goods of Mexico under the terms of the marking rules set forth in regulations....and are entered under a subheading for which a rate of duty appears in the “Special” subcolumn followed by the symbol “MX” in parentheses are eligible for such duty rate....
Thus, under General Note 12, the eligibility of a particular article for the NAFTA duty preference is predicated, in part, upon whether the article is determined to be a good of Canada or Mexico under the NAFTA Marking Rules. In other words, goods are entitled to the NAFTA preferential rate of duty if they are NAFTA “originating” and they qualify as goods of Canada or Mexico under the terms of the marking rules set forth in the regulations.
Section 102.11, Customs Regulations (19 C.F.R. §102.11), sets forth the required hierarchy for determining whether a good is a good of a NAFTA country for the purposes of country of origin marking and determining the rate of duty and staging category applicable to an originating good as set out in Annex 302.2. Paragraph (a) of this section states that the country of origin of a good is the country in which:
(1)	The good is wholly obtained or produced;
(2)	The good is produced exclusively from domestic materials; or
(3)	Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
“Foreign material” is defined in 19 C.F.R. §102.1(e) as “a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced.” Sections 102.11(a)(1) and 102.11(a)(2) do not apply to the facts presented in this case because the attenuators are assembled in Mexico of U.S. materials and therefore are neither wholly obtained or produced, nor produced exclusively from domestic materials. Since an analysis of sections 102.11(a)(1) and 102.11(a)(2) will not yield a country of origin determination, we look to section 102.11(a)(3).
Section 102.11(a)(3) provides that the country of origin is the country in which “each foreign material incorporated in that good undergoes an applicable change in tariff classification as set forth in 19 C.F.R. §102.20....”
The next step in the hierarchy, 19 C.F.R. §102.11(b), states in pertinent part that:
(1) The country of origin of the good is the country or countries of origin of the single material that imparts the essential character to the good... . . .
For purposes of identifying the material that imparts the essential character to a good under § 102.11, the only materials that shall be taken into consideration are those domestic or foreign materials that are classified in a tariff provision from which a change in tariff classification is not allowed under the § 102.20 specific rule or other requirements applicable to the good. For purposes of this paragraph (b)(1): . . .
Applying section 102.18(b)(1)(iii) to the facts of this case, the resistor is the only material in the attenuators that is classified in a tariff provision from which a change in tariff classification is not allowed under the specific rule indicated in § 102.20. Therefore, the resistor is the single material that imparts the essential character of the attenuator and its country of origin will determine the country of origin of the finished article. As you state that the country of origin of the resistor is the United States, we find that under 19 C.F.R. §102.11(b) the attenuator is a good of United States.
However, according to the terms of section 102.19(b), Customs Regulations (19 C.F.R. §102.19(b):
As the processes performed in Mexico, assembling the components of the attenuators, clearly advances them in value and improves them in condition, 19 C.F.R. §102.19(b), is applicable, and the country of origin of the attenuators, for duty purposes, is Mexico. Thus, the imported attenuators are entitled to NAFTA preferential treatment at the “MX” rate, assuming a Certificate of Origin (See 19 C.F.R. §181.11) is completed and signed for the goods. HOLDING:
On the basis of the information provided, it is our opinion the operations to be performed in Mexico to create the attenuators are proper assembly operations or operations incidental to assembly pursuant to subheading 9802.00.80, HTSUS. Therefore, allowances in duty may be made under this tariff provision for the cost or value of the U.S. origin components upon compliance with documentary requirements of 19 C.F.R. §10.24. In addition, based on your contention that all the components used to make the attenuators in Mexico are NAFTA originating materials, we find that the imported attenuators are eligible for the NAFTA tariff preference at the “MX” rate.
Applicability of the partial duty exemption pursuant under HTSUS subheading 9802.00.80 to coaxial attenuators processed in Mexico; eligibility for preferential NAFTA treatment