CLA-2 RR: CR: GC 965207 DBS
TARIFF NOS.: 9102.11.95, 9102.21.50, 9113.10.00
Mr. Paul Hegland
White & Case, LLP
601 Thirteenth Street, NW
Suite 600 South
Washington, D.C. 20005-3807
RE: NY H83472 revoked; bimetallic watches and watch bracelets
Dear Mr. Hegland:
This is in response to your letter dated August 20, 2001 requesting reconsideration of NY Ruling Letter H83472, issued to you on August 8, 2001, on behalf of Cartier, Inc., which classified various bimetallic watches under the Harmonized Tariff Schedule of the United States (HTSUS) as having watch bracelets of base metal in subheadings 9102.21.30, HTSUS and 9102.11.65, HTSUS, and classified watch bracelets imported separately in subheading 9113.20.40, HTSUS, which provides for watch bracelets of base metal. We have reconsidered the classification of these articles and now believe NY H83472 is incorrect.
Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. 1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed revocation of the above identified ruling was published on February 6, 2002, in the Customs Bulletin, Volume 36, Number 6. No comments were received in response to the notice.
FACTS:
The watchbands for the Santos de Cartier watch models W20030C4, W20031C4, W20036R3, W20037R3, W20011C4 and W20012C4 are composed of stainless steel and inlaid with 18-carat gold.
They are referred to as bimetallic bracelets and contain 26 links composed of stainless steel with 52 gold “screws” or 24 links composed of stainless steel with 48 gold “screws.” Written explanations and schematic drawings submitted by Cartier, Inc. show that the screws are actually screw-shaped inserts with unthreaded shanks that are press-fitted into predrilled holes. There is a round protrusion referred to as a shoulder (the opposite of a groove) in the middle of the shank of the screw-shaped insert. The shoulder cannot be seen without 10 power or greater magnification. The shoulder rubs against the stainless steel wall and gives slightly as it is pressed downward into position in the shank hole. The gold insert is friction fit by machine press into the stainless steel link and cannot be removed without destroying the link.
The watches have base metal cases with 18-carat gold (circular or square) bezels, each featuring eight stainless steel screws. In general, the watches and watch bracelets will be imported together with the bracelet affixed to the watch. Occasionally, the bracelets will be imported separately as replacements for damaged bracelets. The Santos de Cartier watch is designed to evoke an aircraft fuselage by the use of the screw on the bezel and on the bracelet. The Santos de Cartier line includes various types of watches of stainless steel and watch bracelets of stainless steel and gold as described.
Model W20036R3 has an automatic winding mechanical movement with 17 jewels. Models W20030C4, W2003R73, W20011C4 watches have battery operated quartz movements with seven jewels. Models W20031C3 and W20012C4 have battery operated quartz movements with four jewels.
In NY H83472, the Director, National Commodity Specialist Division, classified watch models W20030C4, W20037R3, W20011C4, W20031C4 and W20012C4 in subheading 9102.11.65, HTSUS, which provides for wrist watches, electrically operated, with mechanical display only, other, with strap, band or bracelet of textile material or of base metal, whether or not gold- or silver-plated. Watch model W20036R3 was classified in subheading 9102.21.30, HTSUS, which provides, in pertinent part, for wrist watches, with automatic winding, having over one jewel but not over 17 jewels in the movement, with strap, band or bracelet of base metal, whether or not gold- or silver-plated. All six models of watch bracelets imported separately were classified in subheading 9113.20.40, HTSUS, which provides, in pertinent part, for watch bracelets of base metal, whether or not gold- or silver-plated, valued over $5 per dozen.
ISSUE:
Whether the bimetallic watches and watch bracelets are classifiable as of base metal or of precious metal or metal clad with precious metal for tariff classification purposes.
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRIs”). GRI 1 provides that the classification of goods 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 GRIs may then be applied.
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) may be utilized. ENs, though not dispositive or legally binding, provide commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. Customs believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The HTSUS provisions under consideration are as follows:
9102 Wrist watches, pocket watches and other watches, including stop
watches, other than those of heading 9101:
Wrist watches, electrically operated, whether or not incorporating a stop watch facility:
With mechanical display only:
Other:
With strap, band or bracelet of textile material or of base metal, whether or not gold- or silver-plated:
Other
* * *
Other:
Other
* * *
9102 Other wrist watches whether or not incorporating a stop-
watch facility:
With automatic winding:
Having over one jewel but not over 17 jewels in
the movement:
With strap, band or bracelet of textile
material or of base metal, whether or not
gold- or silver-plated
* * *
Other
* * *
9113 Watch straps, watch bands and watch bracelets, and parts thereof:
Of precious metal or of metal clad with precious metal
* * *
Of base metal, whether or not gold- or silver-plated:
Straps, bands and bracelets:
9113.20.40 Valued over $5 per dozen
Note 2 of Chapter 91 instructs that watches with cases not wholly of precious metal or metal clad with precious metal are to be classified in heading 9102, HTSUS. Note 7 of Chapter 71 defines the expression “metal clad with precious metal” for the entire tariff schedule. According to Note 7, “metal clad with precious metal” means material made with a base of metal upon one or more surfaces of which there is affixed by soldering, brazing . . . or similar mechanical means a covering of precious metal. Except where the context otherwise requires, the expression also covers base metal inlaid with precious metal.” However, Note 2 of Chapter 91 specifically excepts cases that are “metal clad with precious metal” by means of being a base metal inlaid with precious metal. They are to be classified in heading 9102, HTSUS. The cases of the watches at issue are metal with gold bevels. They are not wholly of precious metal, nor are the cases metal clad with precious metal within the meaning of Note 2. Accordingly, they are watches of heading 9102, HTSUS.
Note 2 of the Additional U.S. Notes to Chapter 91 states that watch bracelets entered with wrist watches and of a kind normally sold therewith are classified with the watch in 9102, and other watch bracelets shall be classified in 9113. Thus, the watch bracelets imported separately are classified under heading 9113, HTSUS.
When the subheadings, rather than the headings are at issue, GRI 6 is applied. GRI 6 provides that, “for legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to [rules 1 though 5] on the understanding that only subheadings at the same level are comparable for the purposes of this rule and the relative section and chapter notes also apply, unless the context otherwise requires.”
The importer claims that watch bracelets are composite goods that are to be classified according to GRI 3(b). The importer argues that the essential character of the bracelet is precious metal. In NY H83472, Customs agreed that the composite good analysis applied, but classified the merchandise as having bracelets of base metal. However, upon review of the headings and relevant section and chapter notes, it is clear that GRI 6 and GRI 3(b) are unnecessary, as the merchandise may be classified on the basis of GRI 1.
Note 7 of Chapter 71 specifically defines “metal clad with precious metal” for the entire tariff schedule and unless the context otherwise requires. Note 2 of Chapter 91 required the exclusion of base metal inlaid with precious metal from that definition with respect to watch cases. The tariff is silent as to watch bracelets in this context. Therefore, watch bracelets of base metal inlaid with precious metal would fall into the classification of metal clad with precious metal. Accordingly, we must determine if the gold “screws” in the watch bracelets are inlaid.
The HTSUS does not provide a definition of “inlaid.” However, the General ENs to Chapter 71 state, in pertinent part, the “[e]xcept where the context otherwise requires base metal articles inlaid with precious metal are also classified as articles of metal clad with precious metal (e.g. copper plates inlaid with silver strips for use in the electrical industry, and the so-called damaskeen work of steel inlaid with strips or threads of hammered gold). These two exemplars demonstrate the broad scope of “base metal inlaid with precious metal”, but does not define “inlaid” for each chapter of the HTSUS in which it appears.
Inlaid is defined as “any decorative technique used to create an ornamental design, pattern, or scene by inserting or setting into a shallow or depressed ground or surface a material of different color or type.” Encyclopædia Britannica (CD-ROM, Standard ed. 1999). Oxford English Dictionary (2d. ed. 1989) defines inlay as “to furnish or fit (a thing) with a substance of a different kind embedded in its surface; to diversify or ornament by such insertion of another material disposed in a decorative pattern or design.”
In addition, although watches are not jewelry, the Jewelers' Dictionary 3rd edition, has a definition consistent with those above. It states that to inlay is, in pertinent part, “In jewelry, to embed a material in another substance so that the surfaces of each are level.” Moreover, in the past the courts have defined and analyzed the term “inlaid” in other contexts, but the discussion is also relevant here. One decision cited six lexicographers, all of whom similarly state that to inlay is to lay or insert one material into another. See Keveney v. United States, 1 Ct. Cust. 101; T.D. 31111 (1910). In Hunter v. United States, it was held that inlaid means "laid into a definite space, as a separate part of the material of the structure.” See 121 Fed. 207 (1903), cited by United States v. Pacific Overseas Co., 42 C.C.P.A. 1 (1954).
Here, the unthreaded screws are press-fitted into holes drilled into the stainless steel link so that the screws are flush with the surface of the link. They are purely ornamental gold inserts which are embedded into the stainless steel links. We believe that the “screws” are inlaid. Accordingly, the watches and watch bracelets are classified as being of base metal inlaid with precious metal. The watches with watch bracelets attached will be classified in subheading 9102.11.95, HTSUS. The watch bracelets imported separately will be classified in subheading 9113.10.00, HTSUS.
For the reasons above we conclude that NY H83472 was in error. Accordingly, the models W20030C4, W20037R3, W20011C4, W20031C4 and W20012C4 are classifiable in subheading 9102.11.95, HTSUS; model W20036R3 is classifiable in subheading 9102.21.50, HTSUS; and the watch bracelets imported separately are classifiable in subheading 9113.10.00, HTSUS.
HOLDING:
Bimetallic watch and watch bracelet models W20030C4, W20037R3, W20011C4, W20031C4 and W20012C4 are classifiable in subheading 9102.11.95, HTSUS, which provides for, “wrist watches . . . other than those of heading 9101: wrist watches, electrically operated, whether or not incorporating a stop watch facility: with mechanical display only: other: other: other.” Model W20036R3 is classifiable in subheading 9102.21.50, HTSUS, which provides for, “wrist watches . . . other than those of heading 9101: wrist watches, electrically operated, whether or not incorporating a stop watch facility: with automatic winding: having over one jewel but not over 17 jewels in the movement: other.”
The watch bracelets imported separately are classifiable in subheading 9113.10.00, HTSUS, which provides for, “watch straps, watch bands and watch bracelets and parts thereof: of precious metal or of metal clad with precious metal.”
EFFECT ON OTHER RULINGS:
NY H83472, dated August 8, 2001, is hereby revoked. In accordance with 19 U.S.C 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
John Durant, Director
Commercial Rulings Division