[Code of Federal Regulations]

[Title 19, Volume 1]

[Revised as of April 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 19CFR10.14]



[Page 98-99]

 

                        TITLE 19--CUSTOMS DUTIES

 

   CHAPTER I--BUREAU OF CUSTOMS AND BORDER PROTECTION, DEPARTMENT OF 

              HOMELAND SECURITY; DEPARTMENT OF THE TREASURY

 

PART 10_ARTICLES CONDITIONALLY FREE, SUBJECT TO A REDUCED RATE, ETC.

--Table of Contents

 

                      Subpart A_General Provisions

 

Sec.  10.14  Fabricated components subject to the exemption.



    (a) Fabricated components, the product of the United States. Except 

as provided in Sec.  10.15, the exemption provided under subheading 

9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS) (19 

U.S.C. 1202), applies to fabricated components, the product of the 

United States. The components must be in condition ready for assembly



[[Page 99]]



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. Materials undefined in final dimensions 

and shapes, which are cut into specific shapes or patterns abroad are 

not considered fabricated components.



    Example 1. Articles identifiable in their exported condition as 

components or parts of the article into which they will be assembled, 

such as transistors, diodes, integrated circuits, machinery parts, or 

precut parts of wearing apparel, are regarded as fabricated components.

    Example 2. Prestamped metal lead frames for semiconductor devices 

exported in multiple unit strips in which the individual frame units are 

connected to each other, or integrated circuit wafers containing 

individual integrated circuit dice which have been scribed or scored in 

the United States, are regarded as fabricated components. The separation 

of the individual frames by cutting, or the segmentation of the wafer 

into individual dice by flexing and breaking along scribed or scored 

lines, is regarded as an operation incidental to the assembly process.

    Example 3. Wires of various type, electrical conductors, metal 

foils, insulating tapes, ribbons, findings used in dressmaking, and 

similar products, which are in a finished state when exported from the 

United States, and are ready for use in the assembly of the imported 

article, are regarded as fabricated components if they are only cut to 

length or subjected to operations incidental to the assembly process 

while abroad.

    Example 4. Uncut textile fabrics exported in bolts from which 

wearing apparel components will be cut according to a pattern are not 

regarded as fabricated components. Similarly, other materials, such as 

lumber, leather, sheet metal, plastic sheeting, exported in basic shapes 

and forms to be fabricated into components for assembly, are not 

eligible for treatment as fabricated components.



    (b) Substantial transformation of foreign-made articles or 

materials. Foreign-made articles or materials may become products of the 

United States if they undergo a process of manufacture in the United 

States which results in their substantial transformation. Substantial 

transformation occurs when, as a result of manufacturing processes, a 

new and different article emerges, having a distinctive name, character, 

or use, which is different from that originally possessed by the article 

or material before being subject to the manufacturing process. The mere 

finishing or modification of a partially or nearly complete foreign 

product in the United States will not result in the substantial 

transformation of such product and it remains the product of a foreign 

country.



    Example 1. A cast metal housing for a valve is made in the United 

States from imported copper ingots, the product of a foreign country. 

The housing is a product of the United States because the manufacturing 

operations performed in the United States to produce the housing 

resulted in a substantial transformation of the foreign copper ingots.

    Example 2. An integrated circuit device is assembled in a foreign 

country and imported into the United States where its leads are formed 

by bending them to a specified angle. It is then tested and marked. The 

imported article does not become a product of the United States because 

the operations performed in the United States do not result in a 

substantial transformation of the foreign integrated circuit device.

    Example 3. A circuit board assembly for a computer is assembled in 

the United States by soldering American-made and foreign-made components 

onto an American-made printed circuit board. The finished circuit board 

assembly has a distinct electronic function and is ready for 

incorporation into the computer. The foreign-made components have 

undergone a substantial transformation by becoming permanent parts of 

the circuit board assembly. The circuit board assembly, including all of 

its parts is regarded as a fabricated component, the product of the 

United States, for purposes of subheading 9802.00.80, HTSUS (19 U.S.C. 

1202).



[T.D. 75-230, 40 FR 43022, Sept. 18, 1975, as amended by T.D. 89-1, 53 

FR 51247, Dec. 21, 1988]