APPENDIX

         Determining an AD Valorem equivalent for Merchandise
         Governed by a Specific or Compound Rate of Duty

Certain situations require that a specific or compound duty rate be converted
to an ad valorem equivalent rate to calculate duty.  One example is
merchandise eligible for a duty allowance under HSA 9802005060, 9802008060,
or 9802006000, but also subject to a schedule 1-97 specific or compound rate
of duty on the value of repair or foreign component.

The need to calculate an ad valorem equivalent might also arise when
determining the highest duty rate among the rates associated with HSA
8211100000 set provision.  If any articles in the set carry a specific or
compound rate of duty, then those rates must be changed to ad valorem
equivalent before a duty rate comparison can be made.

Follow the steps below to calculate ad valorem equivalent.  The values,
quantities and harmonized numbers are from sample 018 in this package.

Step 1 - Apply the specific or compound duty rate against the full value of
the merchandise and the total quantity.

In example 018 - the full value of the merchandise is $320150.00, ($210150.00
+ $110000.00).

         Compound duty rate is 45 cents EA + 7% + 2.5 cents per jewel.

         Therefore .45 x 12000		= $ 5400.00
          	    7% x $320150	=  22410.50
                   2.5 x 48000		=   1200.00
         Total				  $29010.50

         Step 2 - Take the duty arrived at in
         step 1, and divide it by the
         full value of merchandise (including
         9802 value).

         29010.50 divided by 320150 = 0 0906153% = 9.06153%

Step 3 - The % arrived at in step 2 is your ad valorem equivalent.
         (9.06153%-)

Step 4 - Apply the ad valorem equivalent %- to the dutiable value of the
merchandise (not including the 9802 value).  This will give you the duty due
from the line item.

         Dutiable value is $110000 
	 Therefore, $1110000 x 9.06153k = $9,967.68 (duty)