--- kind: "range" citation: "19 C.F.R. §§ 10.12–10.23" title: "19" from: "10.12" to: "10.23" count: 10 url: "https://uscodex.org/cfr/19/10.12..10.23" --- # §10.12. Definitions. As used in [§§ 10.11 through 10.24](/cfr/19/10.11..10.24.md), the following terms shall have the meanings indicated: - (a) **American-made.** The term “American-made” is used to refer to a product of the United States as defined in [paragraph (e)](#e) of this section. - (b) **Assembly.** “Assembly” means the fitting or joining together of fabricated components. - (c) **Exemption.** “Exemption” means the deduction of the cost or value of products of the United States which were assembled abroad in accordance with the requirements of subheading 9802.00.80, Harmonized Tariff Schedule of the United States ([19 U.S.C. 1202](/usc/19/1202.md)), from the full value of the assembled article. - (d) **Fabricated component.** “Fabricated component” means a manufactured article ready for assembly in the condition as exported except for operations incidental to the assembly. - (e) **Product of the United States.** A “product of the United States” is an article manufactured within the Customs territory of the United States and may consist wholly of United States components or materials, of United States and foreign components or materials, or wholly of foreign components or materials. If the article consists wholly or partially of foreign components or materials, the manufacturing process must be such that the foreign components or materials have been substantially transformed into a new and different article, or have been merged into a new and different article. # §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](/usc/19/1202.md)), 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](/usc/19/1202.md)) 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. # §10.14. Fabricated components subject to the exemption. - (a) **Fabricated components, the product of the United States.** Except as provided in [§ 10.15](/cfr/19/10.15.md), the exemption provided under subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS) ([19 U.S.C. 1202](/usc/19/1202.md)), applies to fabricated components, the product of the United States. The components must be in condition ready for assembly 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. - (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. # §10.15. Fabricated components not subject to the exemption. Fabricated components which are not products of the United States are excluded from the exemption. In addition, the exemption is not applicable to any component exported from the Customs territory of the United States: - (a) From continuous Customs custody with remission, abatement, or refund of duty; - (b) With benefit of drawback; - (c) To comply with any law of the United States or regulation of any Federal agency requiring exportation; or - (d) After manufacture or production in the United States under subheading 9813.00.05, HTSUS ([19 U.S.C. 1202](/usc/19/1202.md)). # §10.16. Assembly abroad. - (a) **Assembly operations.** The assembly operations 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, and may be preceded, accompanied, or followed by operations incidental to the assembly as illustrated in [paragraph (b)](#b) of this section. The mixing or combining of liquids, gases, chemicals, food ingredients, and amorphous solids with each other or with solid components is not regarded as an assembly. - (b) **Operations incidental to the assembly process.** Operations incidental to the assembly process whether performed before, during, or after assembly, do not constitute further fabrication, and will not preclude the application of the exemption. The following are examples of operations which are incidental to the assembly process: - (1) Cleaning; - (2) Removal of rust, grease, paint, or other preservative coating; - (3) Application of paint or preservative coating, including preservative metallic coating, lubricants, or protective encapsulation; - (4) Trimming, filing, or cutting off of small amounts of excess materials; - (5) Adjustments in the shape or form of a component to the extent required by the assembly being performed abroad; - (6) Cutting to length of wire, thread, tape, foil, and similar products exported in continuous length; separation by cutting of finished components, such as prestamped integrated circuit lead frames exported in multiple unit strips; and - (7) **Final calibration, testing, marking, sorting, pressing, and folding of assembled articles.** - (c) **Operations not incidental to the assembly process.** Any significant process, operation, or treatment other than assembly whose primary purpose is the fabrication, completion, physical or chemical improvement of a component, or which is not related to the assembly process, whether or not it effects a substantial transformation of the article, will not be regarded as incidental to the assembly and will preclude the application of the exemption to such article. The following are examples of operations not considered incidental to the assembly as provided under subheading 9802.00.80, Harmonized Tariff Schedule of the United States ([19 U.S.C. 1202](/usc/19/1202.md)): - (1) Melting of exported ingots and pouring of the metal into molds to produce cast metal parts; - (2) Cutting of garment parts according to pattern from exported material; - (3) Chemical treatment of components or assembled articles to impart new characteristics, such as showerproofing, permapressing, sanforizing, dying or bleaching of textiles; - (4) Machining, polishing, burnishing, peening, plating (other than plating incidental to the assembly), embossing, pressing, stamping, extruding, drawing, annealing, tempering, case hardening, and any other operation, treatment or process which imparts significant new characteristics or qualities to the article affected. - (d) **Joining of American-made and foreign-made components.** An assembly operation may involve the use of American-made components and foreign-made components. The various requirements for establishing entitlement to the exemption apply only to the American-made components of the assembly. - (e) **Subassembly.** An assembly operation may involve the joining or fitting of American-made components into a part or subassembly of an article, followed by the installation of the part or subassembly into the complete article. - (f) **Packing.** The packing abroad of merchandise into containers does not in itself qualify either the containers or their contents for the exemption. However, assembled articles which otherwise qualify for the exemption and which are packaged abroad following their assembly will not be disqualified from the exemption by reason of their having been so packaged, whether for retail sale or for bulk shipment. The tariff status of the packing materials or containers will be determined in accordance with General Rule of Interpretation 5, HTSUS ([19 U.S.C. 1202](/usc/19/1202.md)). # §10.17. Valuation of exempted components. The value of fabricated components to be subtracted from the full value of the assembled article is the cost of the components when last purchased, f.o.b. United States port of exportation or point of border crossing as set out in the invoice and entry papers, or, if no purchase was made, the value of the components at the time of their shipment for exportation, f.o.b. United States port of exportation or point of border crossing, as set out in the invoice and entry papers. However, if the appraising officer concludes that the cost or value of the fabricated components so ascertained does not represent a reasonable cost or value, then the value of the components shall be determined in accordance with [section 402](/cfr/19/402.md) or [section 402a](/cfr/19/402a.md), Tariff Act of 1930, as amended (19 U.S.C. [1401a](/usc/19/1401a.md), [1402](/usc/19/1402.md)). # §10.18. Valuation of assembled articles. As in the case of the appraisement of any other import merchandise (see [subpart C of part 152](/cfr/19/part152-subpartC.md) of this chapter), the full value of assembled articles imported under subheading 9802.00.80, Harmonized Tariff Schedule of the United States (HTSUS) ([19 U.S.C. 1202](/usc/19/1202.md)), is determined in accordance with [19 CFR 152.100](/cfr/19/152.100.md) et seq. # §10.19-10.20. Reserved # §10.21. Updating cost data and other information. When a claim for the exemption is predicated on estimated cost data furnished either in advance of or at the time of entry, this fact should be clearly stated in writing at the time of entry, and suspension of liquidation may be requested by the importer or his agent pending the furnishing of actual cost data. Actual cost data must be submitted as soon as accounting procedures permit. To insure that information used for Customs purposes is reasonably current, the importer shall ordinarily be required to furnish updated cost and assembly data at least every six months, regardless of whether he considers that significant changes have occurred. The 6-month period for the submission of updated cost or other data may be extended by the Center director if such extension is appropriate for the type of merchandise involved, or because of the accounting period normally used in the trade, or because of other relevant circumstances. # §10.23. Standards, quotas, and visas. All requirements and restrictions applicable to imported merchandise, such as labeling, radiation standards, flame-retarding properties, quotas, and visas, apply to assembled articles eligible for the exemption in the same manner as they would apply to all other imported merchandise.