CLA-2 OT:RR:CTF:TCM H016418 RM
Port Director
Port of Champlain
U.S. Customs and Border Protection
237 West Service Road
Champlain, NY 12919
Attn: Connie Knapp, IS
RE: Classification of Certain Outboard Motorboats Imported with Engines; Internal Advice
Dear Port Director:
This is in response to the memorandum dated July 17, 2007, from your office, forwarding with comments the Request for Internal Advice, dated June 13, 2007, on behalf of Brunswick Boat Group, regarding the classification of certain outboard motorboats imported with engines under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The merchandise under consideration consists of outboard motorboats of aluminum construction imported from Canada. The boats are “full-rigged” for operation prior to export from Canada. This includes the addition of electrical wiring harnesses and steering and wiring control cables; the drilling, fitting and mounting of gauges; and the mounting of the outboard engine on the transom or jack plate, depending on the boat involved.
The importer informed us in his submission that the engines are interchangeable. This means that, beyond a horsepower restriction, and with the proper rigging, any engine of the same family of engines can be installed on a particular outboard motorboat.
ISSUE:
At issue is whether the motorboats and the outboard engines are classified together or separately under the HTSUS.
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 2 through 6 may then be applied in order.
The HTSUS provisions under consideration are as follows:
8903 Yachts and other vessels for pleasure or sports; row boats and canoes:
Other:
8903.99 Other:
Outboard motorboats …
With hulls of metal:
8903.99.20.30 Exceeding 5 m in length …
* * *
8407 Spark-ignition reciprocating or rotary internal combustion piston engines:
Marine propulsion engines:
8407.21.00 Outboard motors …
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
The importer submits that the attached engine should be classified separately from the motorboat under heading 8407, HTSUS, specifically subheading 8407.21.00, HTSUS, the eo nomine provision for outboard motors. In support of this claim, the importer cites Coraggio Design, Inc. v. United States, 12 Ct. Int’l Trade 143 (1988), a case concerning fabric for draperies. In that case, the Court determined that drapery fabric with a “continental hem” that dedicated its use solely as drapery and made it “commercially unsuitable for other uses” was, nevertheless, classifiable as fabric and not as drapery, because the hem did not “fix the identity of the drapery with certainty.” The importer argues that the instant outboard engines are likewise not “irrevocably committed to use” with a particular motorboat because “they may all be readily interchanged with any other motor…, any motor accompanying an individual motorboat is not bound to that boat the time of importation.” We disagree.
The rule is well established that goods are classified in the condition in which they are imported. See United States v. Citroen, 223 U.S. 407, 414-415 (1911). In his submission, the importer states that the outboard motorboats in question are imported with the engine already mounted (i.e., physically attached to the boat as well as mechanically and electronically connected). Thus, pursuant to GRI 1, the engine, like the hundreds of other components that go into the construction of a motorboat, is classified together with the motorboat, as the sum of its parts. Similarly, automobile engines are not separately classified from the automobiles to which they are attached at the time of importation. See HQ 083433, dated December 18, 1989.
The case cited by the importer, Coraggio Design, Inc., concerns the dedicated use of an item as imported, not the intended use of a part of an article. In Coraggio Design, Inc., the Court found it possible that the imported item could be used for a purpose other than draperies, as it was not specifically made for that purpose. Conversely, in this case, the outboard engines are specifically designed for only one purpose: to propel the motorboat to which it is attached at the time of importation. That the engines could potentially be interchanged with other engines does not negate the fact that, as imported, their use is designated for use with the motorboats to which they are attached. Regardless, as stated above, the attached engine cannot be segregated from the boat for classification purposes because goods are classified in the condition in which they are imported.
The importer also cites to decisions of the Canadian Border Services Agency (CBSA). He states that “the CBSA has taken the formal position that classification of outboard motors should be separate from the classification of the underlying boat based on this exact interchangeability aspect.” While this may be true, it is not our policy to adhere to or to comment on the policies of other agencies or governments.
We note that the components of a motorboat (e.g., the engine, seats, windshields, gauges, etc.) are classified individually when imported separately. However, this is not the case with the importation of the completed motorboats in question.
HOLDING:
Outboard motorboats imported with engines are classifiable under subheading 8903.99.20.30, HTSUS, which provides for: “[y]atchs and other vessels for pleasure or sports…: [o]ther: [o]ther: [o]utboard motorboats: [w]ith hulls of metal: [e]xceeding 5m in length.” The column one, general rate of duty is 1 percent ad valorem.
Duty rates are provided for convenience only and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division