CLA-2 OT: CTF: TCM: H271385 ERB
Port Director
Port of JFK International Airport
U.S. Customs and Border Protection
Building 77, JFK International Airport
Jamaica, New York 11430
Attn: Chief, Trade Operations Branch D
RE: Application for Further Review of Protest Number 4701-15-100193; Tariff classification of one 1967 Ferrari 275 GTS/4 NART Spider
Dear Port Director:
This letter is in reply to the Application for Further Review (AFR) of Protest Number 4701-15-100193, dated May 4, 2015, by counsel on behalf of Premier Collections, LLC (Premier). The Protest is against U.S. Customs and Border Protection’s (CBP) classification of one entry of one car, a 1967 Ferrari North American Racing Team (NART) GTS/4 Spider, chassis number 10749, under subheading 8703.24.00, of the Harmonized Tariff Schedule of the United States (HTSUS). A sample was not provided, but photos in Premier’s submission was considered for this ruling.
FACTS:
Ferrari S.p.A. is an Italian luxury car manufacturer. Ferrari manufactures cars for the luxury consumer market and they also manufacture racing cars, specialty, and exotic cars. The company was founded by Enzo Ferrari (1898 – 1988) as Auto Avio Costruzioni in 1939, Modena, Italy. It is currently headquartered in Maranello, right outside of Modena. Throughout its history, the company has produced specialty racing cars, especially Formula One (the highest class of single-seat auto racing sanctioned by the Federation Internationale de l’Automobile (FIA)).
In the mid-1960s, Luigi Chinetti, an American Ferrari dealer, famous Le Mans winner, and leader of the NART asked his friend Mr. Ferrari, and Mr. Ferrari’s design partner Sergio Scaglietti, to personally build a racing car with an original look and design. This resulted in the 1967 Ferrari 275 GTS/4 NART Spider . Only ten of these cars were ever produced, and all ten were sold to Mr. Chinetti’s dealership in the United States. As such, the 1967 Ferrari 275 GTS/4 NART Spiders are extremely rare cars. Once created, the car itself became a celebrity. One of the ten cars produced appeared in the movie “The Thomas Crown Affair” starring Steve McQueen and Faye Dunaway (though not the chassis at issue here). When the film finished shooting, Steve McQueen himself bought one of the ten produced (again, not the chassis at issue here). Still another one of the ten, chassis number 10709, sold at auction in 2013 for $27,500,000.00.
The subject merchandise is chassis 10749. It is described as a two-seat Grand Touring automobile, with a 3.3 liters Colombo 60-degree V-12 engine, and 280-300 horsepower. The iconic shape of the body is referred to as a Berlinetta body, and is open-air. The curvaceous long-hosed, short-(Kamm)-tailed Gran Turismo was based on a Pininfarina-penned two-seater coup surrounding a 3286-cc development of Giotto Colombo’s small-block V12 engine. It was one of the first to feature a combined rear axle and five-speed transmission, which later became the norm for racing cars of this ilk.
The subject chassis 10749 was the penultimate car built and the last to be shipped to the United States. The original owner sold it in 1977 and since then it has been owned by a series of custodians. Chassis 10749 has never entered a world class racing car event sponsored or sanctioned by the FIA. Rather, it has been invited to be paraded and judged at various Concours d’Elegance events and other specialty car events. The Concours d’Elegance is a series of automobile shows where specialty cars are available to the public on display and are subsequently judged.
The February/March 1997 issue of Cavallino Magazine featured chassis 10749 on its cover. Cavallino Magazine is a Ferrari enthusiasts’ publication. In 1998, chassis 10749 was entered into a charity auction by Christie’s Auction House, and sold for $1.85 million. It also won first place at the Santa Barbara Concours, and the Newport Beach Concours, as well as performing at the Pebble Beach Concours and Rodeo Drive Concours.
In June 2007, chassis 10749 was entered into the celebration of the 60th Anniversary of the Prancing Horse in Maranello, Italy, honoring Ferrari and its clients. The event concluded in the Concours d’Elegance Ferrari. Chassis 10749 placed 2nd in Classe 6 . In July 2009, chassis 10749 won “Best in Show” at the Salon Privé Concours d’Elegance. It also showed at the Ferrari Owners Club (FOC) Concours at Heythrop Park, the Barkaways Open Day and the St. James Concours, in the United Kingdom, between 2011 and 2013. It was shown at the Amelia Island Concours in 2015. The 1967 Ferrari GTS/4 NART Spiders are commonly advertised as one of the world’s top rare cars.
In its condition as imported, chassis 10749 is fitted with its original parts, including the unique wire wheels. It was imported into the United States from Italy after having been featured in an exhibition at the Ferrari Museum in Modena, Italy. The invoice which accompanied the car upon importation lists its sale price as $25,000,000.00
Chassis 10749 was imported on May 29, 2014, classified under heading 9705, HTSUS, as a collectors’ piece. CBP liquidated the entry April 10, 2015, under heading 8703, HTSUS, as a motor car. Premier argues in its AFR that the merchandise was correctly classified as entered.
ISSUE:
Whether the subject merchandise, a 1967 Ferrari 275 GTS/4 NART Spider is classified as a motor car of heading 8703, or whether it is a collector’s item of heading 9705, HTSUS.
LAW & ANALYSIS:
Initially, we note that this matter is protestable under 19 U.S.C. § 1514(a) (2) as a decision on classification. The protest was timely filed, within 180 days of liquidation for entries made on or after December 18, 2004. See Miscellaneous Trade and Technical Corrections Act of 2004, Pub. L. 108-429, § 2103(2) (B)(ii), (iii)(codified as amended at 19 U.S.C. § 1514 (c) (3) (2006)).
Further Review of Protest Number 4701-15-100193 is properly accorded to Premier pursuant to 19 C.F.R. § 174.24(a) because the decision against which the protest was filed is alleged to be inconsistent with prior CBP rulings. Specifically, Premier cites New York Ruling Letter (NY) L83265, dated March 14, 2005, Headquarters Ruling Letter (HQ) 962234, dated July 17, 2000.
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs). GRI 1 requires that classification be determined first according to the terms of the heading of tariff schedule and any relative section or chapter notes, and unless otherwise required, according to the remaining GRIs taken in their appropriate order.
The HTSUS provisions under consideration in this case are as follows:
8703 Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars:
9705 Collections and collectors’ pieces of zoological, botanical, mineralogical, anatomical, historical, archeological, paleontological, ethnographic or numismatic interest:
Note 4 to Chapter 97 states, in relevant part:
Subject to notes 1 through 3 above, articles of this chapter are to be classified in this chapter and not in any other chapter of the tariff schedule.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are generally indicative of the proper interpretation of these headings. See T.D. -80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The EN 97.05, HTSUS, states, in pertinent part, the following:
These articles are very often of little intrinsic value but derive their interest from their rarity, their grouping or their presentation. The heading includes:
***
(B) Collections and collectors’ pieces of historical, ethnographic, paleontological or archaeological interest, for example:
Articles being the material remains of human activity suitable for the study of the activities of earlier generations, such as: mummies, sarcophagi, weapons, objects of worship, articles of apparel, articles which have belonged to famous persons.
There is no dispute that the subject merchandise is a motor car. Therefore, the question before us is whether the subject car is also described as a collectors’ piece, in which case, pursuant to Note 4(a) to Chapter 97, it must be classified there, and not in heading 8703, HTSUS.
There exists no strict standard or enumerated criteria for articles classified in heading 9705, HTSUS. The word “historic” is not defined by the tariff, nor by the ENs, and the dictionary definition is quite broad. The Oxford English Dictionary states it is, “A historical work or subject; a history. Now rare”, and “relating to history; concerned with past events”. “historic, n. and adj.” OED Online. Oxford University Press, December 2014. Web. 23 February 2015.
In light of this, we turn to the ENs to inform and shape our understanding of the scope of the heading, but with the caveat that the ENs are used for guidance only in interpretation of the HTSUS. The ENs explain the scope of headings, often by means of exemplars, of which these examples are not necessarily all inclusive or all restrictive. The ENs should not restrict or expand the scope of headings, rather, they should describe and elaborate on the nature of goods falling within those headings, as well as the nature of goods falling outside of those headings. Thus, items purporting to be classified in heading 9705 must be examined on a case-by-case basis, considering all the relevant factors involved. See HQ 088031, dated October 8, 1991 (classifying jewelry belonging to the Duke and Duchess of Windsor in heading 9705, HTSUS).
Pursuant to the ENs, articles of “historical interest” classified in heading 9705, HTSUS, are done so by virtue of their rarity, age, connection to a specific historical event, or era, or point in time, so long as they are the remains of human activity suitable for the study of earlier generations. See HQ W968392, dated February 9, 2007 (classifying a stone ushabti, described as being a stone “Ushabti of Neferhotep” in heading 9705, HTSUS). By way of example, the ENs state that this could include mummies, sarcophagi, weapons, objects of worship, articles of apparel, articles which have belonged to famous persons. See EN 97.05(B)(1). But in using the term, “such as,” preceding the list in the ENs, it is obvious that an object need not be all of those exemplars at once. Rather, these are individual examples. Hence, while “articles belonging to a famous person” might present difficulty administratively, nothing in the list mandates that an article must have a nexus to a historical time and have belonged to a famous person. It is simply an example along with others of what might constitute “articles … suitable for study.” See HQ 088031, dated October 8, 1991 (“Articles that have “belonged to famous persons” is susceptible to a broad interpretation that would be impossible to administer” and thus should be judged on a case-by-case basis, considering all relevant factors); See also HQ H213716, dated June 1, 2015 (classifying ice hockey memorabilia in heading 9705, HTSUS).
Cars present an interesting conundrum in a heading 9705 analysis, as motor cars and racing cars (even luxury ones) are generally-speaking mass-produced for commercial consumption. Goods produced as a commercial undertaking to commemorate, celebrate, illustrate, or depict an event or any other matter, whether or not production is limited in quantity or circulation, do not fall in this heading as collections or collectors’ pieces of historical interest unless the goods themselves have subsequently attained that status by reason of their age or rarity. See HQ H021886, dated August 6, 2008 (classifying a “Maison Tropicale,” a structure of sheet steel and aluminum designed by the French architect Jean Prouve in 1949; “Maison Tropical [sic] does not derive its value or historical interest from its limited production nor is it identified with a particular historical event.”); and see HQ 089226, dated July 29, 1991 (where a one-of-a-kind gold watch, valued at $4,975,000.00 did not quality it as an article of “historical interest” because it was not connected to a historic time nor a famous person); HQ 961297, dated November 5, 1998 (classifying uniquely designed cars, “[w]ithout evidence that each car had been owned by a famous person and/or involved in an historically significant event…they also did not meet the description of an “historical event” under the tariff.”). See also, NY N065799, dated July 20, 2009 (in classifying a 1957 Ferrari 250 Testa Rossa, CBP noted that the car had been through several restorations, was not particularly rare, and did not present any historic value. It was classified as a motor car of 8703, HTSUS); NY N066124, dated July 21, 2009, (where CBP found a 1956 Ferrari 250 GT Berlinetta, was a motor car of heading 8703, HTSUS, because it had been comprehensively restored, it did not belong to famous persons, nor was it involved in historical events).
That said, in circumstances where a car is very rare, nearly one-of-a-kind, and satisfies the conditions for items of historical significance and is suitable for the study of earlier generations, then automobiles may be considered collectors’ items for tariff classification purposes. Such was the case in HQ 962234, dated July 17, 2000. There Customs classified a 1936 Bugatti T57 tank/race car that was designed by Ettore Bugatti and was one of three built at the Bugatti automobile factory in Molsheim, France. The car won several races and was later stored in a museum after its victories. Ultimately, Customs classified the 1936 Bugatti T57 tank/race car in heading 9705, HTSUS. Customs wisely included a word of caution in HQ 962234, because it was not solely the make of the car that influenced its classification as a collectors’ piece, rather, it was after considering all the relevant factors. Similarly, in NY L83265, dated March 14, 2005, CBP classified four one-of-a-kind Ferraris individually valued between $4 million and $10 million. These cars had been built and owed by the Ferrari family, similar to the instant Spider, and had been driven by famous racing car drivers in historical events. NY L83265 took note of the individual cars’ value and uniqueness in concluding that their rarity qualified them as goods of heading 9705, HTSUS.
In the instant matter, chassis 10749 was one of only ten personally designed by the famous Enzo Ferrari, and handmade by him and his design partner. This personal and immediate connection to Mr. Ferrari and Mr. Scaglietti, as well as Mr. Chinetti, himself a famous racer, adds considerably to it as an article of historic interest. Chassis 10749 is in pristine condition, and includes original parts. Its value is considerable given its uniqueness and rarity, and is significantly higher than a “regular” Ferrari. This can be attributed to the provenance, the history of the car’s design and manufacture, and its worth in the car enthusiasts’ community. Chassis 10749 was involved in several famous, high-profile Concours and other shows throughout the world, won myriad awards, was featured on the cover of a magazine, and was an exhibit at the Ferrari museum because of its unique design and place in Enzo Ferrari’s history. Therefore, the subject merchandise is a collectors’ piece of heading 9705, HTSUS.
This is consistent with previous CBP rulings classifying historic, rare, and valuable racing cars, worthy of public exhibition. See NY N219015, dated June 18, 2012 (classifying a 1953 Jaguar C-type XKC 038 racing car in heading 9705, HTSUS).
HOLDING:
By application of GRI 1, and pursuant to Note 4 to Chapter 97, the subject 1967 Ferrari 275 GTS/4 NART Spider, chassis 10749, is classified in heading 9705, HTSUS. It is specifically provided for under subheading 9705.00.00, HTSUS, which provides for, “Collections and collectors’ pieces of zoological, botanical, mineralogical, anatomical, historical, archaeological, paleontological, ethnographic or numismatic interest.” The column one, general rate of duty is free.
Since classification of the merchandise as indicated above will result in a lower rate of duty as claimed, you are instructed to GRANT the protest.
You are to mail this decision, together with the CBP Form 19, to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision Regulations and Rulings of the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division