CLA-2 OT:RR:CTF:TCM H244570 ALS
Mr. Johannes C. van Yperen
Azel Land Development Co, Inc. P.O. Box 1000
Moravian Falls, NC 28654
RE: Modification of CBP Ruling NY N024842 (April 1, 2008) regarding the tariff classification of Unwrought Gold Flakes and Nuggets
Dear Mr. van Yperen:
In a letter to U.S. Customs and Border Protection (CBP) dated March 10, 2008, you requested a tariff classification ruling under the Harmonized Tariff Schedule of HTSUS for unwrought gold powder, flakes, and nuggets.
In CBP Ruling NY N024842 (April 1, 2008), CBP classified unwrought gold flakes and nuggets under the Harmonized Tariff Schedule of the United States (HTSUS) subheading 7108.12.50, which provides for "Gold (including gold plated with platinum) unwrought or in semimanufactured forms, or in powder form: Nonmonetary: Other unwrought forms: Other....” We have reviewed NY N024842 and find the ruling to be in error with respect to the classification of unwrought gold flakes and unwrought gold nuggets.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. §1625 (c)(1)), 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)), a notice was published in the Customs Bulletin, Volume 49, No. 35, on September 2, 2015, proposing to modify NY N024842, and any treatment accorded to substantially identical transactions. No comments were received in response to this notice.
For the reasons set forth below, we hereby modify NY N024842 only with respect to the classification of unwrought gold flakes and unwrought gold nuggets. The classification of unwrought gold powder in NY N024842 is not at issue here and remains in effect as of this ruling.
FACTS:
The articles at issue are unwrought gold flakes and nuggets. NY N024842 states, in pertinent part, the following:
The product to be imported consists of alluvial gold in the form of flakes, powder or nuggets. This gold has been obtained from river beds. You state that gold found in placer deposits is between 92 and 95 percent pure. This gold will be further refined upon importation into the United States... The applicable subheading for the gold flakes and nuggets will be 7108.12.5050, HTSUS, which provides for gold (including gold plated with platinum) unwrought or in semimanufactured forms, or in powder form, nonmonetary, other unwrought forms, other, other.
As noted above, the other article classified in that case, unwrought gold powder, is not at issue here. Thus, NY N024842 remains in effect with regard to unwrought gold powder.
ISSUE:
Are the unwrought gold flakes and nuggets classified as gold bullion of HTSUS subheading 7108.12.10 or more generally as another form of unwrought gold of HTSUS subheading 7108.12.50?
LAW AND ANALYSIS:
Classification under the HTSUS is determined in accordance with the General Rules of Interpretation (“GRI”) and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation (“ARI”). GRI 1 provides that the classification of goods shall be “determined according to the terms of the headings 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, GRIs 2 through 6 may be applied in order. The HTSUS subheadings at issue are the following in bold:
7108 Gold (including gold plated with platinum) unwrought or in semimanufactured forms, or in powder form:
Nonmonetary:
7108.12 Other unwrought forms:
7108.12.10 Bullion and dore...........................................
7108.12.50 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Subheading Note 1 to HTSUS Chapter 71 states “[f]or the purposes of subheadings 7106.10, 7108.11, 7110.11, 7110.21, 7110.31 and 7110.41, the expressions "powder" and "in powder form" mean products of which 90 percent or more by weight passes through a sieve having a mesh aperture of 0.5 mm.”
Additional U.S. Note 1(a) to HTSUS Chapter 71 states the following:
1. For the purposes of subchapter II, unless the context otherwise requires:
(a) The term "unwrought" refers to metals, whether or not refined, in the form of ingots, blocks, lumps, billets, cakes, slabs, pigs, cathodes, anodes, briquettes, cubes, sticks, grains, sponge, pellets, shot and similar manufactured primary forms, but does not cover rolled, forged, drawn or extruded products, tubular products or cast or sintered forms which have been machined or processed otherwise than by simple trimming, scalping or descaling;
It has been factually established in NY N024842 that the subject gold flakes and nuggets are not gold powder as defined under subheading note 1 to HTSUS Chapter 71. The gold flakes and nuggets meet the definition of “unwrought” in that they are not machined or processed beyond the trimming, scalping, or descaling process. “Alluvial” as an adjective of “alluvium” refers to the fact that the flakes or nuggets are the product of deposits formed from flowing water such as rivers. See, e.g., Definition of “Alluvium,” http://dictionary.reference.com/browse/alluvium (2015); Definition of “Alluvial,” http://www.merriam-webster.com/dictionary/alluvial (2015).
As unwrought gold, the flakes and nuggets are nonmonetary in nature. “Monetary gold” is generally defined as gold that is owned by government authorities. See, e.g., Definition of “Monetary Gold,” http://financial-dictionary.thefreedictionary.com/Monetary+Gold (2015); http:// www.likeforex.com/glossary/w/monetary-gold-30302 (2015). Conversely, “non-monetary gold” is generally defined as a commodity that is traded on the open market and not held for reserve by any government authority. See, e.g., http://stats.oecd.org/glossary/detail.asp?ID=1817 (2015); http:// www.likeforex.com/glossary/w/non-monetary-gold-126937 (2015). The gold flakes and nuggets at issue are being traded on the open market and are not owned by any government authority.
We have previously examined the meaning of the term “bullion” in a tariff classification context. In CBP Ruling HQ H051895 (November 19, 2009), we classified silver grain under HTSUS subheading 7106.91.10, which provides in relevant part for: "Silver … unwrought …: Other: Unwrought: Bullion and dore." In doing so, we determined the following:
The term "bullion" is not defined in the tariff or in the legal notes. When a tariff term is not defined by the HTSUS or the legislative history, its correct meaning is its common, or commercial, meaning. See Rocknel Fastener, Inc. v. United States, 267 F.3d 1354, 1356 (Fed. Cir. 2001). "To ascertain the common meaning of a term, a court may consult 'dictionaries, scientific authorities, and other reliable information sources' and lexicographic and other materials.'" Id. (quoting C.J. Tower & Sons of Buffalo, Inc. v. United States, 673 F.2d 1268, 1271, 69 Cust. Ct. 128 (Cust. Ct. 1982); Simod Am. Corp. v. United States, 872 F.2d 1572, 1576 (Fed. Cir. 1989)). In Jarell-Ash Co. v. United States, 60 Cust. Ct. 65 (Cust. Ct. 1968), the U.S. Customs Court considered the classification of, among other items, silver grain described as "extremely small, irregularly shaped pieces of … silver, which have no uniform longitudinal or latitudinal measurement." The provision under consideration was paragraph 1638 of the Tariff Act of 1930, which exempted from duty "Bullion, gold or silver." Id. n.2. The Court consulted several dictionary definitions before concluding that the common meaning of the term "bullion" is "uncoined gold or silver in the mass considered as so much metal without regard to any value imparted to it by its form." Id. at 67. The Court further noted that "[n]ormally bullion is in the form of ingots, bars, plates and the like … [b]ut it may also consist of other forms or shapes so long as the form or shape does not impart value to the mass." Id. Silver grain constitutes silver in the mass, i.e., it has no value imparted to it by its form. (Emphasis added.)
As with the silver grain in HQ H051895, the unwrought gold flakes and nuggets at issue here are not “in the form of ingots, bars, plates and the like” to quote Jarell-Ash, but are “uncoined gold... in the mass considered as so much metal without regard to any value imparted to it by its form.” See Jarell-Ash Company v. United States, supra. Thus, as gold in unwrought form that is nonmonetary and meets the definition of “bullion” as legally established in Jarell-Ash and HQ H051895, the subject unwrought gold flakes and unwrought gold nuggets are properly classified under HTSUS subheading 7108.12.10 as "Gold (including gold plated with platinum) unwrought or in semimanufactured forms, or in powder form: Nonmonetary: Other unwrought forms: Bullion and dore....” See also CBP Ruling NY N164118 (May 13, 2011).
HOLDING:
The unwrought gold flakes and unwrought gold nuggets are properly classified under HTSUS subheading 7108.12.10 as "Gold (including gold plated with platinum) unwrought or in semimanufactured forms, or in powder form: Nonmonetary: Other unwrought forms: Bullion and dore....” The general column one rate of duty, for merchandise classified under this subheading is Free.
Duty rates are provided for your convenience and 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.
EFFECT ON OTHER RULINGS:
CBP Ruling NY N024842 (April 1, 2008) is hereby MODIFIED only with respect to the tariff classification of Unwrought Gold Flakes and Unwrought Gold Nuggets.
In accordance with 19 U.S.C. §1625(c), this ruling will become effective 60 days after publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division