CLA-2 CO:R:C:M 951197 NLP
District Director of Customs
P.O. Box 789
Great Falls, MT 59403
RE: Protest 3307-92-100001; unworked semi-precious stones;
rhodolite; tanzanite; subheading 7103.10.40; Explanatory
Notes 71.02 and 71.03; 19 CFR 10.172
Dear Sir:
The following is our decision regarding the Protest and
Request for Further Review of Protest No. 3307-92-100001, dated
January 6, 1992. At issue is the classification of semi-precious
stones under the Harmonized Tariff Schedule of the United States
(HTSUS).
FACTS:
Based on the information before us, it appears that two
types of semi-precious stones are subject to protest. The first
type consists of rhodolite and tanzanite stones. The stones in
this group are identified by the letter "A" on the invoice from
Tuckman mines, dated September 5, 1991. We will refer to these
stones as group A. The second type involves only one semi-
precious stone: a tanzanite stone that has a carat weight of
40.60 and a higher value than the other tanzanite stones. This
stone is referred to as "D" on the invoice from Tuckman mines,
dated September 5, 1991.
The rhodolite and tanzanite stones in group A were entered
and liquidated under subheading 7103.10.40, HTSUS, as semi-
precious stones that are simply sawn or roughly shaped. The
tanzanite stone (D) was entered and liquidated under subheading
7103.99.50, HTSUS, which provides for other semi-precious stones
that have been otherwise worked. Duty-free treatment for this
stone under the Generalized System of Preferences (GSP) was
denied.
It is the importer's argument that the rhodolite and
tanzanite in group A are classified in subheading 7103.10.20,
HTSUS, as unworked semi-precious stones. The tanzanite stone (D)
should be entitled to entry free of duty pursuant to the GSP as
it is a product of Tanzania.
ISSUE:
Are the rhodolite and tanzanite stones in group A classified
in subheading 7103.10.20, HTSUS, as unworked semi-precious
stones, or in subheading 7103.10.40, as simply sawn or roughly
shaped semi-precious stones?
Is the tanzanite stone (D) entitled to duty-free treatment
under the GSP?
LAW AND ANALYSIS:
The classification of merchandise under the HTSUS is
governed by the General Rules of Interpretation (GRI's). GRI 1
provides that classification shall be determined according to the
terms of the headings and any relative section or chapter notes.
Heading 7103, HTSUS, provides for "Precious stones (other
than diamonds) and semi-precious stones, whether or not worked or
graded but not strung, mounted or set; ungraded precious stones
(other than diamonds) and semi-precious stones, temporarily
strung for convenience of transport." Explanatory Note (EN)
71.03 of the Harmonized Commodity Description and Coding System
(HCDCS), page 953, states that "[t]he provisions of the second
paragraph of the Explanatory Note to heading 71.02 apply, mutatis
mutandis, to this heading." EN 71.02 states on page 952 that
heading 7102, HTSUS, "covers unworked stones, and stones worked,
e.g., by cleaving, sawing, bruting, faceting, grinding,
polishing, drilling, engraving (including cameos, and intaglios),
preparing as doublets, provided they are neither set or mounted."
Unworked semi-precious stones of subheading 7103.10.20,
HTSUS, are stones that are unworked and are in the same condition
as when they were mined from the earth. The "other" semi-
precious stones of subheading 7103.10.40, HTSUS, are stones that
have been "simply sawn or roughly shaped".
It is the importer's argument that the rhodolite and
tanzanite are classified as unworked semi-precious stones in
subheading 7103.10.20, HTSUS. The importer contends that the
stones are imported into the United States in their natural
state. They are in the exact condition as when they were taken
out of the mine, they resemble gravel and they are not polished.
Moreover, the importer argues that the fact that the
submitted Certificate of Origin, from the Arusha Chamber of
Commerce and Agriculture, dated September 6, 1991, describes the
goods as "Rough & polished gemstones" should not disqualify the
stones from being classified as unworked semi-precious stones.
The importer states that the term "rough" means that the
gemstones are not worked and they are in the same condition as
when they were removed from the mines. Tanzanite, in its natural
condition, has a crystal form and, as a result, looks polished.
The importer states that this may be one reason why the
Certificate of Origin uses the word "polished" in relation to the
stones.
Based on the information provided by the importer, it is our
position that the rhodolite and tanzanite stones in group A are
classified as unworked semi-precious stones in subheading
7103.10.20, HTSUS. The tanzanite stone (D) appears to have been
correctly classified in subheading 7103.99.50, HTSUS. The
substantial value of this stone, as stated on the invoice from
Tuckman mines, and the fact that the weight of this stone is
expressed in carats rather than in grams indicates to us that
this stone has been otherwise worked beyond being simply sawn or
roughly shaped.
Articles from Tanzania classified in subheading 7103.99.50,
HTSUS, are entitled to entry free of duty under the GSP, provided
the importer meets the requirements set forth in 19 CFR 10.172-
178. The decision to grant duty-free treatment rests soley with
the district director upon his satisfaction that the requirements
of 19 CFR 10.172-178 have been met. Therefore, if you are
satisfied that the protestant has provided the necessary
documentation in accordance with the pertinent regulations, the
tanzanite stone should be afforded duty free treatment under the
GSP.
HOLDING:
The protest should be approved concerning the semi-precious
stones in group A. Concerning the tanzanite stone (D), if you
are satisfied that the protestant has met the requirements set
forth in 19 CFR 10.173 through 19 CFR 10.178, then you should
approve that portion the protest. A copy of this decision should
be attached to the Customs Form 19 and provided to the protestant
as part of the notice of action on the protest.
Sincerely,
John Durant, Director
Commercial Rulings Division