[Code of Federal Regulations]
[Title 19, Volume 1]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 19CFR10.13]

[Page 88]
 
                        TITLE 19--CUSTOMS DUTIES
 
  CHAPTER I--UNITED STATES CUSTOMS SERVICE, DEPARTMENT OF THE TREASURY
 
PART 10--ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE, ETC.--Table of Contents
 
Sec. 10.13  Statutory provision: Subheading 9802.00.80, Harmonized Tariff Schedule of the United States (19 U.S.C. 1202).

    Subheading 9802.00.80, Harmonized Tariff Schedule of the United 
States (HTSUS), (19 U.S.C. 1202), provides that 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, are subject to a 
duty upon the full value of the imported article, less the cost or, if 
no charge is made, the value of such products of the United States. The 
rate of duty which is assessed upon the dutiable portion of the imported 
article is that which is applicable to the imported article as a whole 
under the appropriate provision of the HTSUS (19 U.S.C. 1202) for such 
article. If that provision requires a specific or compound rate of duty, 
the total duties assessed on the imported article are reduced in such 
proportion as the cost or value of the returned United States components 
which qualify for the exemption bears to the full value of the assembled 
article.

    Example 1. A transistor radio is assembled abroad from foreign-made 
components and American-made transistors. Upon importation, the 
transistor radio is subject to the ad valorem rate of duty applicable to 
transistor radios upon the value of the radio less the cost or value of 
the American-made transistors assembled therein.
    Example 2. A solid-state watch movement is assembled abroad from 
foreign-made components and an American-made integrated circuit. If the 
movement in question is subject to the specific rate of duty of 75 cents 
if the value of the assembled movement is $30, and if the value of the 
American-made integrated circuit is $10, then the value of the 
integrated circuit represents one third of the total value of the 
assembled article and the duty on the assembled article will be reduced 
by one third ($.25). Therefore, the duty on the assembled movement is 50 
cents.

[T.D. 75-230, 40 FR 43021, Sept. 18, 1975, as amended by T.D. 89-1, 53 
FR 51247, Dec. 21, 1988]