CLA-2 RR:CR:TE 964520 mbg
His Excellency Rene A. Leon
Embassy of El Salvador
2308 California Street, N.W.
Washington, D.C. 20008
RE: U.S.-Caribbean Basin Trade Partnership Act; jewelry presentation box
Dear Mr. Ambassador:
This is in response to your letter dated September 18, 2000, on behalf of an El Salvadoran manufacturing company, Sigma, S.A., requesting a binding ruling on the eligibility of certain jewelry presentation boxes for preferential tariff treatment under the United States-Caribbean Basin Trade Partnership Act (“CBTPA”). You submitted samples for our examination.
FACTS:
The subject merchandise is a presentation box for jewelry. Six samples were presented for Customs review which only differ in color or specific accommodation for a particular piece of jewelry. The interior of each box has a textile lining and features a removable paperboard pad covered with the same textile covering as on the exterior of the box. The paperboard pad has been slit for insertion of either a ring or necklace. Each box measures approximately 2 ¾ inches wide by 1 1/2 inches high by 2 ¾ inches long. Each box is manufactured of a molded plastic base that is wholly covered with a fabric of substrate textile material with a man-made fiber flocking on top. The interior is fitted to contain either one ring or one necklace. The boxes are hinged at the midsection for repeated and easy open and closure. The jewelry boxes are suitable for long term use and are of the type normally presented with jewelry. You have stated that the boxes will be imported from El Salvador to the United States by Bufkor Inc.
ISSUE:
Whether the subject jewelry presentation boxes are eligible for preferential tariff treatment under the CBTPA?
LAW AND ANALYSIS:
I. ELIGIBILITY UNDER THE CBTPA
Title II of the Trade and Development Act of 2000, (Pub. L. 106-200, 114 Stat. 251), concerns trade benefits for the Caribbean Basin and is referred to as the United States-Caribbean Basin Trade Partnership Act ("CBTPA"). Section 211 of the CBTPA amended section 213 (b) of the Caribbean Basin Economic Recovery Act (CBERA) (19 U.S.C. 2703(b)) to provide expanded trade benefits during a “transition period” to designated countries in the Caribbean Basin.
Section 211 of the CBTPA eliminates tariffs and quantitative restrictions on specific textile and apparel articles and extends North American Free Trade Agreement duty treatment standards to non-textile articles that previously were ineligible for preferential treatment under the CBERA. “Transition period” is defined in 19 U.S.C. 2703(b)(5)(D) as meaning, with respect to a designated CBTPA country, the period that begins on October 1, 2000, and ends on the earlier of September 30, 2008, or the date on which a free trade agreement enters into force with respect to the U.S. and the CBTPA country.
Presidential Proclamation 7351, dated October 2, 2000, published in the Federal Register on October 4, 2000 (65 Fed. Reg. 59329), implemented the CBTPA by designating the eligible CBTPA countries and amending Chapter 98, HTSUS (including the creation of new subchapter XX) to facilitate the entry of the specific textile and apparel articles eligible for preferential treatment under the CBTPA.
The enhanced trade benefits provided by the CBTPA are available to eligible articles imported directly from a country (1) that is designated as a CBTPA beneficiary country and (2) which the U.S. Trade Representative (“USTR”) has determined has implemented and follows, or is making substantial progress toward implementing and following certain customs procedures that allow U.S. Customs to verify the origin of the articles. Guatemala is designated as a CBTPA beneficiary country (see Presidential Proclamation 7351, dated October 2, 2000, 65 Fed. Reg. 59329) and has satisfied the second criterion (see 65 Fed. Reg. 60236, dated October 10, 2000).
Certain textile articles are designated eligible for preferential tariff treatment within subheading 9820.11.21, HTSUSA, as provided for in Subchapter XX, U.S. Note 2(a) HTSUSA, which provides:
Except as provided in this note, textile and apparel articles described in subheading 9820.11.03 through 9820.11.30, inclusive, of this subchapter that are imported directly into the custom territory of the United States from a designated beneficiary CBTPA country enumerated in general note 17(a) to the tariff schedule shall be eligible to enter free of duty and free of any quantitative limitations, except as provided in this subchapter, under the terms of the provisions set forth in such subheadings and applicable legal notes, as indicated by the rate of duty of “Free” in the Special rates of duty subcolumn for such provisions.
In addition, Interim Customs Regulations to implement the trade benefit provisions of section 211 of the CBTPA were published in the Federal Register as T.D. 00-68 on October 5, 2000 (65 Fed. Reg. 59650). The T.D. invited public comments to be submitted on the Interim Regulations by December 4, 2000.
The only provision which could be relevant to the jewelry presentation boxes is set forth in 19 U.S.C. 2703(b)(2)(A)(viii), which provides that preferential treatment shall apply to:
Textile Luggage:
(I) assembled in a CBTPA beneficiary country from fabric wholly formed and cut in the United States, from yarns wholly formed in the United States, that is entered under subheading 9802.00.80 of the HTS; or is
(II) assembled from fabric cut in a CBTPA beneficiary country from fabric wholly formed in the United States from yarns wholly formed in the United States.
Subheading 9802.00.8046, HTSUSA, provides for “Articles, except goods of heading 9802.00.90 and goods imported under provisions of subchapter XIX of this chapter and goods imported under provisions of subchapter XX, 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: Articles for which duty free treatment is claimed under U.S. note 7(b)(ii) to this subchapter.”
Furthermore, Subchapter II, U.S. Note 7(b) provides:
For purposes of heading 9802.00.80, duty free treatment shall be accorded to the following articles imported directly from a beneficiary United States--Caribbean Basin Trade Partnership Act (CBTPA) country previously designated by the President in a proclamation issued pursuant to such Act and enumerated in general note 17 (a) to the tariff schedule—
(ii) textile luggage assembled in a designated beneficiary country from fabric wholly formed and cut in the United States, from yarns wholly formed in the United States.
Subheading 9820.11.21, HTSUS, provides for the duty-free entry of:
Articles imported from a designated beneficiary Caribbean Basin Trade Partnership country enumerated in general note 17(a) to the tariff schedule: Textile luggage assembled in such a country from fabric cut in a beneficiary country from fabric wholly formed in the United States from yarns wholly formed in the United States.
Therefore, the issue regarding the preferential tariff treatment for the subject jewelry presentation boxes depends upon the tariff classification under the Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”) and whether jewelry presentation boxes are included within the tariff definition of “luggage.”
II. CLASSIFICATION UNDER THE HTSUSA
Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (“GRIs”). GRI 1 provides that classification shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI may then be applied. The Explanatory Notes (“EN”) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUSA by offering guidance in understanding the scope of the headings and GRI.
Jewelry boxes are eo nomine provided for under the Harmonized Tariff Schedule in Heading 4202. Heading 4202, HTSUSA specifically provides for “Trunks, suitcases, vanity cases, attaché cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber, or of paperboard, or wholly or mainly covered with such materials or with paper.”
(Emphasis added).
Thus, this heading encompasses the articles enumerated, as well as containers similar to these articles and other types of containers.
The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System constitute the official interpretation of the nomenclature at the international level. While not legally binding, they do represent the considered views of classification experts of the Harmonized System Committee. It has therefore been the practice of the Customs Service to follow, whenever possible, the terms of the EN when interpreting the HTSUSA.
In April, 1988, the United States formally raised the issue of the scope of the term "jewellery boxes" with the Harmonized System Committee (“HSC”). Ultimately, the HSC amended the EN to heading 4202 so as to clarify the meaning of this term. This amendment became effective on January 1, 1990, and reads as follows:
The term "jewellery boxes" covers not only boxes specially designed for keeping jewellery [the ordinary kind], but also similar lidded containers of various dimensions (with or without hinges or fasteners) specially shaped or fitted to contain one or more pieces of jewellery and normally lined with textile material, of the type in which articles of jewellery are presented and sold and which are suitable for long term use.
This language clarifies that containers used in the presentation and sale of jewelry that are suitable for long-term use are included in the term "jewellery boxes." Based on our examination of the instant articles, we conclude that the jewelry boxes are used for the presentation and sale of jewelry and in addition, are suitable for long term use. Accordingly, the submitted samples are classifiable under heading 4202.
Within heading 4202, at the subheading level, the Harmonized Tariff Schedule specifically includes a provision for those containers with an outer surface of textile materials. Furthermore, a specific break out within this subheading of 4202 was created for jewelry boxes which are normally sold at retail with their merchandise such as the subject merchandise. Therefore the subject jewelry presentation boxes are eo nomine classified in subheading 4202.92.9015, HTSUSA.
This classification decision is consistent with other Customs rulings on similar merchandise such as Headquarter Ruling Letter (“HQ”) 964382, dated August 7, 2001, and HQ 951028, dated March 3, 1993, in which Customs held that various boxes used in the retail sale of jewelry and similar items were jewelry boxes of the kind described in the above EN. The boxes classified therein were specially shaped or fitted to contain jewelry (containing inserts, slots, hooks, moldings, and the like) and were in fact used in the presentation and/or sale of such items. See also HQ 954021, dated November 1, 1993, and HQ 953610, dated April 30, 1993.
There is no definition of “luggage” provided in the HTSUS nor in the legislation for preferential treatment under the CBTPA, however, it is a well established tenet of customs law that tariff terms are construed in accordance with their common and commercial meanings and that the common meaning of a tariff term is a question of law. Toyota Motor Sales, U.S.A., Inc. v. United States, 7 Ct. Int’l Trade 178, 182, 585 F.Supp 649 (1984), aff’d 753 F.2d 1061 (Fed.Cir. 1985). Thus, it is proper for Customs to turn to lexicographic sources to determine the meanings of the terms at issue. Once having determined the meaning of the terms, in deciding if the subject articles are within the eo nomine classification of the HTS, Customs may consider the use of the merchandise. United States v. Quon Quon Co., 46 CCPA 70, 73, C.A.D. 699 (1959). Customs interprets the use of the merchandise to include the manner in which it is used as well as the reason for which it is used. We note that “Luggage” is commonly defined as “containers for a traveler’s belongings.” Webster’s New College Dictionary, 650 (1999).
It is Customs determination that the term “luggage” is typically understood to be items such as travel goods which would include, for example, trunks, hand trunks, lockers, valises, satchels, suitcases, wardrobe cases, overnight bags, pullman bags, traveling bags, knapsacks, duffle bags, and like articles designed to contain clothing or other personal effects during travel. As the jewelry presentation boxes are outside of the scope of the “luggage” definition as it is commonly and commercially known, the subject merchandise will not be eligible for preferential tariff treatment under the CBTPA.
HOLDING:.
The subject jewelry presentation boxes are eo nomine classified in subheading 4202.92.9015, HTSUSA as “Trunks, suitcases, vanity cases, attaché cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber, or of paperboard, or wholly or mainly covered with such materials or with paper: Other: With outer surface of sheeting of plastic or of textile materials: Other: Other: With outer surface of textile materials: Other, jewelry boxes of a kind normally sold at retail with their contents.” The merchandise is dutiable at the general column one duty rate of 18.1 percent ad valorem.
The jewelry presentation boxes are not eligible for duty free/quota free treatment under the CBTPA.
Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification), you should contact your local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.
Sincerely,
John Durant, Director
Commercial Rulings Division