CLA-2: RR:CR:TE: 966879 BtB
Area Port Director
Bureau of Customs and Border Protection
6747 Engle Road Middleburg Heights, OH 44130
Attention: Thomas A. Novak
RE: Internal Advice 03/023; classification of stainless steel wire products
Dear Port Director:
This is in response to your memorandum forwarding a request for internal advice initiated by letter dated April 29, 2003, by Serko & Simon LLP on behalf of Neodontics International, Inc., d/b/a G & H Wire Company (“G & H” or “petitioner”) concerning the tariff classification of certain stainless steel wire products used for orthodontic purposes manufactured by A.J. Wilcock Pty Ltd. (“AJW”) under the Harmonized Tariff Schedule of the United States (“HTSUS”).
FACTS:
There are four types of merchandise manufactured by AJW at issue. This merchandise is described by petitioner as: (i) wire in 10-inch straight lengths, (ii) wire coiled on spools, (iii) uprighting springs, and (iv) archwires. Each type of merchandise is made of type 302 stainless steel. The wire products manufactured by AJW are collectively referred to as “AJW wire,” “Australian Wire,” and “Wilcock Wire.”
The wire in 10-inch straight lengths has either a circular or rectangular cross section. The 10-inch straight length wire with a circular cross section is made in sizes measuring between 0.008 of an inch and 0.024 of an inch in diameter. The 10-inch straight length wire with a rectangular cross section is made in sizes measuring between 0.016 of an inch by 0.022 of an inch and 0.0215 of an inch by 0.027 of an inch. In its letter, petitioner describes this wire as follows: “[t]his convenient to use and easy to store wire is used by orthodontists in the dental procedure of teeth straightening. This product is imported in tubes containing either 10 or 30 wires per tube. Braces aided by the wires move teeth to the desired position.”
The wire coiled on spools has a circular cross section and is available in different grades depending on tensile strength and flexibility/resiliency requirements. The wire is made in sizes measuring between 0.008 of an inch and 0.024 of an inch in diameter. There is 25 feet of coiled wire on each spool. In its letter, petitioner describes this wire as follows: “[a]n orthodontist cuts the required amount of this product off the spool for use with braces in the teeth straightening process. This product is not as convenient to use as the straight length wire but it serves the same purpose.”
The uprighting springs are made in shapes specific to the size and location of the tooth that they are designed to be used on and the direction in which they are bent (e.g., lower right clockwise). They are imported in packets of 10 springs. The uprighting springs are made of wire with circular cross section measuring between 0.010 of an inch and 0.014 of an inch. In its letter, petitioner describes the springs as follows: “[t]his product is inserted by orthodontists into the patient’s mouth in order to upright and reposition individual teeth.”
The archwires are wires that have been formed into arches and have either horizontal or vertical circles formed into the arch. They are imported in packets of 10. The archwires are made in wire sizes measuring between 0.016 of an inch by 0.016 of an inch and 0.0215 of an inch by 0.027 of an inch. In its letter, petitioner describes the archwires as follows: “[t]his product is used by orthodontists who prefer a preformed product rather than taking the time to form the wire themselves. The archwires are best described as horseshoe shapes that correspond to the anatomical shape of an orthodontic patient’s jaw line and dental arch.”
Each of the four types of merchandise are intended exclusively for orthodontic use. In its request, petitioner states the following in regard to the AJW wire:
AJW wire has special and unique characteristics that greatly improve and enhance its tensile strength and resiliency to extraordinary levels beyond what would otherwise be typical of a 302 grade stainless steel. With reference to the quality of the wire, we quote from page 1 of the AJW catalog: “For over fifty years, ‘Australian Wire’ has been a household name in orthodontics. The extraordinary properties of these wires are due to the research and fine engineering skills employed in the processing of the wires. Wilcock wires are well known for their resilience and ability to withstand masticatory forces as well as being able to maintain their shape even when auxiliaries and elastics are used. There is no other wire which opens the bite as effectively as Wilcock wire.”
Aside from statements like the one above, petitioner does not provide any specific information on how AJW wire differs from ordinary type 302 steel wire.
ISSUE:
What is the classification of the (i) wire in 10-inch straight lengths, (ii) wire coiled on spools, (iii) uprighting springs, and (iv) archwires under the HTSUSA?
LAW AND ANALYSIS:
Classification under the HTSUSA is made in accordance with the General Rules of Interpretation (GRI). GRI 1 provides, in part, that classification decisions are to be "determined according to the terms of the headings and any relative section or chapter notes." In the event that 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, in order. The Harmonized Commodity Description and Coding System Explanatory Notes (EN) constitute the official interpretation of the Harmonized System at the international level (for the 4 digit headings and the 6 digit subheadings) and facilitate classification under the HTSUSA by offering guidance in understanding the scope of the headings and GRI. While neither legally binding nor dispositive of classification issues, the EN provide commentary on the scope of each heading of the HTSUSA and are generally indicative of the proper interpretation of the headings. See T.D. 89-80, 54 Fed. Reg. 35127-28 (Aug. 23, 1989).
In its request for internal advice, petitioner asserts that the four types of merchandise are classifiable under subheading 9021.10.0050, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for, “[o]rthopedic appliances … : [o]rthopedic or fracture appliances … , [b]one plates, screws and nails, and other internal fixation devices or appliances.” Therefore, subheading 9021.10.0050, HTSUSA, will be considered for each type of merchandise. We will first address the classification of the wire in 10-inch straight lengths and the wire coiled on spools. We will then turn to the classification of the uprighting springs and archwires.
The HTSUS provisions under consideration for the wire in 10-inch straight lengths are:
9021 Orthopedic appliances, including crutches, surgical belts and trusses; splints and other fracture appliances; artificial parts of the body; hearing aids and other appliances which are worn or carried, or implanted in the body, to compensate for a defect or disability; parts and accessories thereof:
9021.10.00 Orthopedic or fracture appliances, and parts and accessories thereof:
9021.10.0050 Bone plates, screws and nails, and other internal fixation devices or appliances
* * * * * * * * * * * *
7222 Other bars and rods of stainless steel; angles, shapes and sections of stainless steel:
7222.20.00 Bars and rods, not further worked than cold-formed or cold-finished
* * * * * * * * * * * *
The HTSUS provisions under consideration for the wire coiled on spools are subheading 9021.10.0050, HTSUSA, and:
7223.00 Wire of stainless steel
7223.00.10 Round wire
* * * * * * * * * * * *
For simplicity, the wire in 10-inch straight lengths and the wire coiled on spools may hereinafter be jointly referred to as the “instant wire” or the “wire at hand.”
In the case at hand, petitioner claims that, at the time of importation, that the instant wire is an unfinished orthopedic appliance, having the essential character of complete or finished goods provided for in heading 9021, HTSUSA. This claim is based on petitioner’s assertion that the instant wire’s identity is “fixed with certainty” as an orthopedic appliance at the time of its importation. In its letter, petitioner repeatedly states that the instant wire “only requires cutting” for use, that it “does not have to be combined with other materials to produce an article,” and that it is “not commercially capable of any other use.” In support of its claim, petitioner cites several court cases decided under the Tariff Schedules of the United States (TSUS), the HTSUS' predecessor tariff code. As you know, cases decided under the TSUS are not dispositive in interpreting the HTSUS. However, on a case-by-case basis such decisions may be instructive, particularly where the nomenclature remains unchanged and no dissimilar interpretation is required by the text of the HTSUS. However, the cases that petitioner cites do not deal with compellingly similar merchandise, nor do they contain any discussion of essential character, a concept that did not exist under the TSUS. For these reasons, the cited cases are of little value as precedent under the HTSUS. Petitioner also cites Baxter Healthcare Corporation v. United States, 182 F.3d 1333 (1999), a “parts” vs. “materials” case decided under the HTSUS. Yet, petitioner does not assert that the instant wire is classified as a part of an orthopedic appliance, but an unfinished orthopedic appliance. Furthermore, the Baxter case does not deal with compellingly similar merchandise. For these reasons, the Baxter case is also of little value as precedent. Petitioner also cites several rulings issued by the Bureau of Customs and Border Protection. Because the cited rulings are “parts” vs. “materials” rulings and involve facts and merchandise that are clearly distinguishable from the facts and merchandise in this case, we conclude that these rulings are not precedent here.
While we have undertaken a full and comprehensive review of all the legal arguments that petitioner raised in its letter, noting the principles of Apple Computer Inc. v. United States, 749 F. Supp. 1142 (CIT 1990), we will limit our discussion to the issue on which this case turns. In our opinion, whether the instant wire qualifies as “blanks” under the provisions of GRI 2(a) relating to unfinished articles is the issue on which this case turns.
GRI 2(a) states that "[a]ny reference to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article." EN General Note II to Chapter 90, HTSUS, echoes this tenet stating, “[p]rovided that they have the essential character of the complete or finished article, incomplete or unfinished machines, appliances, instruments or apparatus are classified with the corresponding complete or finished articles ….”
In regard to incomplete or unfinished articles, the EN to GRI 2(a) states, in relevant part:
(II) The provisions of this Rule also apply to blanks unless these are specified
in a particular heading. The term “blank” means an article, not ready for
direct use, having the approximate shape or outline of the finished article or
part, and which can only be used, other than in exceptional cases, for
completion into the finished article or part ….
Semi-manufactures not yet having the essential shape of the finished articles
(such as is generally the case with bars, discs, tubes, etc.) are not regarded as
“blanks.”
The EN establish two criteria for articles which are “blanks” for GRI 2(a) purposes: approximate shape or outline and sole use for completion into the finished article or part. We find that the instant wire fails both parts of the test. As imported, the instant wire is either coiled on spools or in straight lengths. While the wire may be intended solely for orthodontic use, as imported, it does not have the form nor shape, or any visually identifiable characteristic of an orthopedic appliance. Rather, as imported, the instant wire is type 302 stainless steel coiled on spools or in straight lengths and nothing more. Contrary to petitioner’s assertions, the instant wire requires significantly more than cutting to be transformed into an orthopedic appliance. Not only does the wire have to be cut, it also has to be fit to a patient’s mouth, and combined with other components (such as bonding material, brackets, metal bands, elastics, etc.) to form braces. The wire, used by itself, would serve no useful orthopedic purpose. Of equal importance, there is no evidence that the instant wire can only be used for completion into an orthopedic appliance. While petitioner states that it has “established that [the instant] orthodontic wire is not commercially capable of any other use,” we disagree. Though petitioner makes general statements regarding the instant wire’s special and unique characteristics, the record does not establish that wire at hand is incapable of being used in applications as ordinary type 302 stainless steel wire. For these reasons, the instant wire does not qualify as blanks for tariff purposes, and does not have the essential character of an orthopedic appliance of heading 9021, HTSUS.
The wire in 10-inch straight lengths at issue meets the definition of “[o]ther bars and rods” set forth in Note 1(m) to Chapter 72, HTSUS, the chapter covering steel and iron. Under that Note, “other bars and rods” are defined as products which do not conform to … the definition of wire, which have a uniform solid cross section along their whole length in the shape of circles … rectangles (including squares) … or other convex polygons (including ‘flattened circles’ and ‘modified rectangles’ …” Note that the instant wire in 10-inch straight lengths does not meet the definition of “wire” (in Note 1(o) to Chapter 72, HTSUS) because it is not “in coils.” The instant wire in 10-inch straight lengths is specifically described by subheading 7222.20.00, which provides for: “[o]ther bars and rods of stainless steel … : [b]ars and rods, not further worked than cold-formed or cold finished.” We, therefore, find that the instant wire in 10-inch straight lengths is classified in subheading 7222.20.00, HTSUS, pursuant to GRI 1.
The wire coiled on spools at issue meets the legal definition of wire set forth in Note 1(o) to Chapter 72, HTSUS. Under that Note, “wire” is defined as “[c]old-formed products in coils, of any uniform solid cross section along their whole length, which do not conform to the definition of flat-rolled products.” The instant wire coiled on spools is described by subheading 7223.00.10, HTSUS, which provides for: “[w]ire of stainless steel: Round wire.” Therefore, pursuant to GRI 1, we find that it is classified in this provision.
We now turn to the classification of the uprighting springs. The HTSUS provisions under consideration are as follows:
9021 Orthopedic appliances, including crutches, surgical belts and trusses; splints and other fracture appliances; artificial parts of the body; hearing aids and other appliances which are worn or carried, or implanted in the body, to compensate for a defect or disability; parts and accessories thereof:
9021.10.00 Orthopedic or fracture appliances, and parts and accessories thereof:
9021.10.0050 Bone plates, screws and nails, and other internal fixation devices or appliances
* * * * * * * * * * * *
7320 Springs and leaves for springs, of iron or steel:
7320.90 Other:
7320.90.50 Other:
7320.90.5020 Other
* * * * * * * * * * * *
Note 1 to Chapter 90, HTSUS, states in pertinent part:
1. This chapter does not cover:
(f) Parts of general use, as defined in note 2 to section XV, of base metal (section
XV) ….
“Springs and leaves for springs, of base metal, other than clock or watch springs …” are identified as parts of general use by Section XV, Note 2(b). We note that “base metal” includes steel (see Section XV, Note 3). Therefore, the uprighting springs are precluded from classification in Chapter 90, HTSUS, and cannot be classified under subheading 9021.10.0050 or subheading 9021.10.0090, HTSUSA. We find the uprighting springs are classified under subheading 7320.90.5020, HTSUSA, which provides for: “Springs and leaves for springs, of iron or steel: Other: Other, Other” pursuant to GRI 1.
We now turn to the classification of the archwires. The HTSUS provisions under consideration are as follows:
9021 Orthopedic appliances, including crutches, surgical belts and trusses; splints and other fracture appliances; artificial parts of the body; hearing aids and other appliances which are worn or carried, or implanted in the body, to compensate for a defect or disability; parts and accessories thereof:
9021.10.00 Orthopedic or fracture appliances, and parts and accessories thereof:
9021.10.0050 Bone plates, screws and nails, and other internal fixation devices or appliances
9021.10.0090 Other
* * * * * * * * * * * *
EN General Note III to Chapter 90, HTSUS, reiterates Note 2, stating that parts “ … identifiable as suitable for use solely or principally with the machines, appliances, instruments, or apparatus of this Chapter are classified with those machines, appliances, etc.”
In contrast to the wire in 10-inch straight lengths and the wire coiled on spools at hand, the archwires have been formed into arches and have either horizontal or vertical circles formed into their arch. As imported, the shape of the archwires corresponds to the anatomical shape of an orthodontic patient’s jaw line and dental arch. The archwires’ shape and presence of the horizontal or vertical circles make them suitable solely for use as a part in braces. As the archwires have the approximate shape or outline of a part of a finished orthopedic appliance and they are suitable solely for use as a part in braces, we find that they qualify as “blanks” under GRI 2(a) and as classified as parts of an orthopedic appliance under heading 9021, HTSUS.
Lastly, in its letter petitioner asserts that “[a]n inconsistency created by a 1999 ruling after three rulings were favorable to the classification of orthodontic wire under Chapter 90 necessitated this request for internal advice.” Petitioner refers to NY E85612, dated August 30, 1999 and asserts that the holding of this ruling conflicts with the holdings in NY 805333, dated January 5, 1995, NY 805390, dated January 6, 1995, and NY 808498, dated April 21, 1995. We disagree.
In NY 805333, we classified a stainless steel “orthodontic ligature” consisting of “a 14-inch wire bent in two and the closed end shaped into a geometrical pattern with a small soldered loop” in subheading 9021.19.8500, HTSUSA, the provision in 1995 that provided for “[a]rtificial joints and other orthopedic or fracture appliances; parts and accessories thereof, [o]ther.” Similarly, in NY 805390, we classified “preformed archwires” described as “wire arched to fit the contours of the mouth used in orthodontic work in conjunction with braces” in subheading 9021.19.8500, HTSUSA. In NY 808498, we classified stainless steel “straight archwires” in subheading 9021.19.8500, HTSUSA. As all records relating to NY 808498 were lost as a result of the terrorist incident in New York on September 11, 2001, the only information that we have about the merchandise is the text of NY 808498. However, it is known in the orthodontic industry that “straight archwires” are preformed archwires for use in the “straight method” of straightening teeth. “Straight” does not refer to the archwires being straight and unformed. Thus, we believe that the articles in NY 805333, NY 805390, and NY 808498 were all preformed archwires with approximate outlines of the parts that they were to be used as and were held to be unsuitable for any other commercial use besides being used as parts in orthopedic appliances.
NY E85612 addressed the classification of AJW wire made of type 302 stainless steel in 10-inch and 12-inch straight lengths and AJW wire coiled on spools. The AJW wire in 10-inch straight lengths and coiled on spools are the same as the articles classified in this response. In E856612, we classified the AJW wire in straight lengths in subheading 7222.20.00, HTSUS, the same subheading that we classify the AJW wire in 10-inch straight lengths in this response. We classified the AJW wire coiled on spools in subheading 7223.00.1030, HTSUSA, the same subheading that we classify the AJW wire coiled on spools in this response (with the statistical suffix omitted in this response due to instant wire coiled on spools having a range of diameters).
In regard to the alleged inconsistency, petitioner states: “[t]he 1999 ruling [NY E85612] reflects no knowledge or consideration of the 1995 rulings [NY 805333, NY 805390, and NY 808498] in reaching its contrary conclusion.” We do not find the holding of NY E85612 to be contrary to the holdings of NY 805333, NY 805390, and NY 808498. The merchandise involved in NY E85612 is substantially different from the merchandise in NY 805333, NY 805390, and NY 808498. As mentioned above, in each of these three rulings we found preformed archwires to be classified as parts of an orthopedic appliance. The articles in NY E85612 are not archwires, but stainless steel wire in straight lengths and coiled on spools. Note that the archwires covered by this ruling are classified in subheading 9021.10.0090, HTSUSA, the current provision for parts of orthopedic appliances.
HOLDINGS:
The wire in 10-inch straight lengths is classified in subheading 7222.20.0045, HTSUSA, which provides for “[o]ther bars and rods of stainless steel … : [b]ars and rods, not further worked than cold-formed or cold-finished, [o]ther: [w]ith a maximum cross-sectional dimension of less than 18 mm.” The applicable duty rate is 1.1% ad valorem. The wire coiled on spools is classified in subheading 7223.00.10, HTSUS, which provides for “[w]ire of stainless steel: [r]ound wire.” Classification at the 10-digit level will depend on the diameter of the wire. The applicable duty rate is 0.9% ad valorem. The uprighting springs are classified in subheading 7320.90.5020, HTSUSA, which provides for: “[s]prings and leaves for springs, of iron or steel: [o]ther: [o]ther: [o]ther.” The applicable duty rate is 2.9% ad valorem. The archwires are classified in subheading 9021.10.0090, HTSUSA, which provides for, in addition to other merchandise, “[o]rthopedic appliances … parts and accessories thereof: [o]rthopedic or fracture appliances, and parts and accessories thereof: [o]ther.” Merchandise classified in subheading 9021.10.0090, HTSUSA, has a duty free rate.
Pursuant to the Section 201 steel safeguard measures implemented by Presidential Proclamation 7529, and terminated by Presidential Proclamation 7741, certain bars and rods of stainless steel classified in subheading 7222.20.00, HTSUS, and entered or withdrawn from warehouse after March 20, 2002, through December 5, 2003, are subject to the additional ad valorem duties specified by subheadings 9903.73.97 through 9903.74.06, HTSUS, depending on the date that they were entered or withdrawn from warehouse. The instant wire in 10-inch straight lengths is subject to such duties. Under the same measures, certain stainless steel wire coiled on spools classified in subheading 7223.00.10, HTSUS, and entered or withdrawn from warehouse after March 20, 2002, through December 5, 2003, are subject to the additional ad valorem duties specified by subheadings 9903.74.18 through 9903.74.24, HTSUS, depending on the date that they were entered or withdrawn from warehouse. The instant wire coiled on spools is subject to such duties.
You are to mail this decision to the internal advice applicant no later than 60 days from the date of this letter. On that date, the Office of Regulations and Rulings 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 Rulings Division