HQ H260945
CLA-2 OT:RR:CTF:TCM HQ H260945 TSM
Port Director, Port of New York/Newark
U.S. Customs and Border Protection
1100 Raymond Blvd.
Newark, NJ 07102
Attn: Patrick Caldarone, Import Specialist
Re: Protest and Application for Further Review No: 4601-14-101669; Classification of glass beads.
Dear Port Director:
The following is our decision regarding Protest and Application for Further Review No. 4601-14-101669, timely filed on October 15, 2014, on behalf of Trollbeads U.S., Inc. (“Trollbeads” or “Protestant”) regarding the tariff classification of glass beads under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The subject merchandise consists of hand-blown decorative glass beads, which are spherical in shape and perforated through the center with a sterling silver inner rim for stringing. Each glass bead is not sized, nor complete to form an article of jewelry, and must be combined with additional beads, imitation gemstones, and other ornaments, as well as have functional jewelry findings (connectors, spacers, and possibly clasps), in order to form a complete piece of jewelry, such as a bracelet.
The subject merchandise was originally entered on September 17, 2013 under subheading 7018.10.50, HTSUS, which provides for “Glass beads, imitation pearls, imitation precious or semiprecious stones and similar glass smallwares and articles thereof other than imitation jewelry; glass eyes other than prosthetic articles; statuettes and other ornaments of lamp-worked glass, other than imitation jewelry; glass microspheres not exceeding 1 mm in diameter: Glass beads, imitation pearls, imitation precious or semiprecious stones and similar glass smallwares: Other.” On August 8, 2014, the subject merchandise was liquidated under subheading 7113.11.50, HTSUS, which provides for “Articles of jewelry and parts thereof, of precious metal or of metal clad with precious metal: Of precious metal whether or not plated or clad with precious metal: Of silver, whether or not plated or not plated or clad with other precious metal: Other: Other.” Protestant claims that the subject merchandise should be classified in subheading 7018.10.50, HTSUS, as entered. A sample of the subject merchandise was received and examined by this office.
A sample of the subject merchandise was received and examined by this office. An image of the sample is displayed below.
ISSUE:
Whether the subject merchandise is properly classified in heading 7018, HTSUS, as “Glass beads, imitation pearls, imitation precious or semiprecious stones and similar glass smallwares and articles thereof other than imitation jewelry,” or in heading 7113, HTSUS, as “Articles of jewelry and parts thereof, of precious metal or of metal clad with precious metal.”
LAW AND ANALYSIS:
Initially, we note that the matter protested is protestable under 19 U.S.C. §1514(a) (2) as a decision on classification. The protest was timely filed, within 180 days of liquidation of the entry. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2) (B) (ii), (iii) (codified as amended at 19 U.S.C. § 1514(c) (3) (2006)).
Further Review of Protest No. 4601-14-101669 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24 (b) because Protestant alleges that the decision against which the protest was filed is alleged to involve questions of law or fact which have not been ruled upon by the Commissioner of Customs or his designee or by the Customs courts.
Merchandise imported into the United States is classified under HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
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.
In addition, in interpreting the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
The HTSUS provisions under consideration are as follows:
7018 Glass beads, imitation pearls, imitation precious or semiprecious stones and similar glass smallwares and articles thereof other than imitation jewelry; glass eyes other than prosthetic articles; statuettes and other ornaments of lamp-worked glass, other than imitation jewelry; glass microspheres not exceeding 1 mm in diameter:
7018.10 Glass beads, imitation pearls, imitation precious or semiprecious stones and similar glass smallwares:
7018.10.50 Other
* * *
7113 Articles of jewelry and parts thereof, of precious metal or of metal clad with precious metal:
Of precious metal whether or not plated or clad with precious metal:
7113.11 Of silver, whether or not plated or clad with other precious metal:
Other:
7113.11.50 Other
To determine whether the decorative glass beads under consideration are classified in subheading 7018.10.50, HTSUS, or subheading 7113.11.50, HTSUS, we follow the above-referenced provision of GRI 1 and consider the relative Chapter Notes. First, it should be noted that Note 1 (b) to Chapter 70, HTSUS, states that this section does not cover “Articles of chapter 71 (for example, imitation jewelry).” Accordingly, at issue is whether or not the decorative glass beads under consideration are “articles of chapter 71.”
Although heading 7113, HTSUS, provides for articles of jewelry and parts thereof, of precious metal or of metal clad with precious metal, we note that the subject merchandise consists of spherical in shape hand-blown decorative glass beads. Only the inner rims, inserted into the glass beads for stringing, are made of sterling silver. Note 2 (a) to Chapter 71 provides, in pertinent part, that “Headings 7113, 7114 and 7115 do not cover articles in which precious metal or metal clad with precious metal is present as minor constituents only, such as minor fittings or minor ornamentation (for example, monograms, ferrules and rims)…” Accordingly, we next consider whether the sterling silver inner rims at issue here are “present as minor constituents only” within the meaning of this note. Upon review of the sample, we conclude that the function of the sterling silver inner rims is solely to strengthen and support the subject glass beads, and prevent them from being damaged upon stringing. The rims are not designed to function independently on their own. As such, they are “minor constituents” or “minor fittings” provided for in Note 2(a) to Chapter 71.
As discussed above, the subject merchandise is composed of glass beads and sterling silver inner rims. In this regard, GRI 2(b) states, in pertinent part, that the classification of goods consisting of more than one material or substance shall be according to the principles of GRI 3. GRI 3 states that, when goods are prima facie classifiable under two or more headings, classification shall be effected as follows:
(a) ...when two or more headings each refer to
part only of the materials or substances
contained in mixed or composite goods…
those headings are to be regarded as
equally specific in relation to those goods,
even if one of them gives a more complete
or precise description of the goods.
(b) Mixtures, composite goods consisting of
different materials or made up of different components, . . . which cannot be classified by
reference to 3(a), shall be classified as if
they consisted of the material or component
which gives them their essential character,
insofar as this criterion is applicable.
Inasmuch as the subject merchandise qualifies as a composite good with different components, it must be classified accordingly. If imported alone, the hand-blown decorative glass beads would be classified in heading 7018, HTSUS, which provides for glass beads. If imported separately, the inner rims would be classified in heading 7113, HTSUS, which provides for articles of jewelry and parts thereof, of precious metal.
As the subject merchandise is a composite good, we must apply GRI 3(b). Under GRI 3(b), the merchandise must be classified as if it consisted of the component which gives the merchandise its essential character. The term "essential character" is not defined within the HTSUS, GRIs or ENs. However, EN VIII to GRI 3(b) gives guidance, stating that: “[T]he factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.
In the instant case, the role of the glass component in relation to the use of the decorative glass beads at issue is the most significant factor. Without the glass component, the silver rims, the function of which is merely to strengthen and support the subject glass beads, would not form the decorative glass beads on their own. Accordingly, we find that the silver rims would serve no purpose if used alone. However, the glass portion of the subject glass beads is their essential part, capable of functioning independently.
In accordance with GRI 3(b), we find that the glass component imparts the essential character of the subject merchandise. Accordingly, the hand-blown decorative glass beads are classified in subheading 7018.10.50, HTSUS. See New York Ruling Letter (NY) B88742, dated August 26, 1997. See also NY N256919, dated October 1, 2014.
HOLDING:
By application of GRI 3(b), the subject decorative glass beads are classified in subheading 7018.10.50, HTSUS, which provides for “Glass beads, imitation pearls, imitation precious or semiprecious stones and similar glass smallwares and articles thereof other than imitation jewelry; glass eyes other than prosthetic articles; statuettes and other ornaments of lamp-worked glass, other than imitation jewelry; glass microspheres not exceeding 1 mm in diameter: Glass beads, imitation pearls, imitation precious or semiprecious stones and similar glass smallwares: Other.”
You are instructed to ALLOW the protest.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP website at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division