CLA-2 OT:RR:CTF:TCM HQ H265058 NCD
Port Director
U.S. Customs and Border Protection
John F. Kennedy International Airport
Bldg #77
Jamaica, NY 11430
Attn: Donna Monaco, Senior Import Specialist
Re: Protest and Application for Further Review No: 4701-15-100098; Classification of 1964 Ferrari 250 GTO, Chassis 5573GT
Dear Port Director:
The following is our decision as to Protest and Application for Further Review No. 4701-15-100098, timely filed on February 9, 2015 on behalf of GTO 64, LLC (“GTO 64” or “Protestant”). The instant protest pertains to the classification of the 1964 Ferrari 250 GTO, Chassis 5573GT (“5573GT”) by U.S. Customs and Border Protection (CBP) under the Harmonized Tariff Schedule of the United States (HTSUS). Protestant asserts that CBP’s classification of the subject merchandise at liquidation is incorrect.
FACTS:
The subject item is a 1964 Ferrari 250 GTO race car bearing the distinct chassis number 5573GT. It is one of three 1964 250 GTOs and one of thirty-nine total 250 GTOs produced by Ferrari S.p.A., a widely-renowned manufacturer of high-end sports cars. See Aaron Severson, Exactly how many Ferrari 250 GTOs were built? Autoweek, July 31, 2014, http://autoweek.com/article/car-life/exactly-how-many-ferrari-250-gtos-were-built. Like the other two 1964 250 GTOs, the 5573GT boasts the “Series II” design, which is characterized by wider fenders, recessed backlight, and flying buttress sail panels. Id.
The 5573GT’s designation as Gran Turismo Omologata, i.e., GTO, indicates that it was designed and homologated, i.e., approved, for use in races sanctioned by the Federation Internationale de l’Automobile (FIA). See Paul Hudson, Ferrari 250 GTO at Auction, The Telegraph, July 23, 2014, http://www.telegraph.co.uk/?motoring/????classic?cars/?10983614/Ferrari-250-GTO-at-auction.html. Ferrari 250 GTOs enjoyed an “enormous amount of success” on the track between 1962-1964, having been driven to three first-place finishes consecutive FIA championships, two consecutive first-place finishes in the Tour de France and the GT category of the 24 Hours of Le Mans, and back-to-back first-place finishes in the Nürburgring 1000km within that span. See Ferrari, 250 GTO, http://auto.ferrari.com/en_US/?sports-cars-models/past-models/250-gto (last visited May 5, 2015); posting of Ciprian Florea to TopSpeed, http://www.top?speed.com/?cars/??ferrari/??1962-1964-ferrari-250-gto-ar15766.html (Nov. 10, 2006, 05:25 EST). The 5573GT itself was driven to a ninth-place finish in the 1964 24 Hours of Le Mans, a first-place finish in the 1964 SCCA Interclub Bridgehampton, and a second-place finish in the 1964 Nürburgring 1000km. See Terry O’Neill, N.A.R.T.: A Concise History of the North American Racing Team 1957 to 1983 236-37 (2015) [hereinafter O’Neill]; Posting of Frans Bulterman to Autogespot, http://www.auto?gespot.com?/?unique-ferrari-250-gto-will-go-for-renovation (July 8, 2015, 13:39 EST).
Protestant asserts that the 5573GT’s previous drivers include “some of the greatest names in auto racing,” such as Ferrari racing team members John Surtees, Pedro Rodríguez, Mike Parkes, Bandini, and Ludovico Scarfiotti. Protestant also asserts that previous owners of the 5573GT are of particular renown. Among the claimed owners is Luigi Chinetti, winner of the 24 Hours of Le Mans and a personal friend of Enzo Ferrari’s. See Headquarters Ruling Letter (HQ) H271385, dated May 9, 2016 (detailing Chinetti’s history). Most recently, directly prior to the transaction for which entry was made, the 5573GT was owned by Pierre Bardinon, an accomplished collector of classic automobiles. The bill of sale reflecting the transfer of the 5573GT’s title from the Bardinon estate to the current ownership lists a purchase price of over $40 million, one of the highest recorded valuations of an automobile. By comparison, the retail price of 250 GTOs at their times of production was $18,500, which, adjusted for inflation, currently amounts to approximately $150,000. See posting of Ciprian Florea to TopSpeed, supra page 2.
The 5573GT was entered October 5, 2014, and was classified upon entry in heading 9705, HTSUS, specifically 9705.00.00, HTSUS, which provides for: “Collections and collectors' pieces of zoological, botanical, mineralogical, anatomical, historical, archeological, paleontological, ethnographic or numismatic interest.” CBP liquidated the 5573GT on February 6, 2015 in heading 8703, HTSUS, specifically 8703.24.00, HTSUS, which provides for: “Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars: Other vehicles, with spark-ignition internal combustion reciprocating piston engine: Of a cylinder capacity exceeding 3,000 cc.” Protestant claims classification as entered.
ISSUE:
Whether 1964 Ferrari 250 GTO, Chassis Number 5573GT is properly classified in heading 8703, HTSUS, as a motor car, or in heading 9705, HTSUS, as a collector’s piece of historical interest.
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 first 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. 4701-15-100098 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a) because Protestant alleges that the decision against which the protest inconsistent with previous CBP decisions concerning substantially similar merchandise.
Merchandise imported into the United States is classified under the HTSUSA. 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 requires that classification be determined first 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 heading and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While neither 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 (August 23, 1989).
The 2016 HTSUS provisions under consideration in the instant case are as follows:
8703 Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars:
Other vehicles, with spark-ignition internal combustion reciprocating piston engine:
8703.24.00 Of a cylinder capacity exceeding 3,000 cc
9705.00.00 Collections and collectors' pieces of zoological, botanical, mineralogical, anatomical, historical, archeological, paleontological, ethnographic or numismatic interest
As a preliminary matter, Note 4(a) to Chapter 97 states: “Subject to notes 1 through 3 above, articles of this chapter are to be classified in this chapter and not in any other chapter of the tariff schedule.” Consequently, if the 5573GT is described by heading 9705, HTSUS, then it must be classified there.
We therefore initially consider heading 9705, HTSUS, which applies, inter alia, to “collectors’ pieces of …historical…interest.” EN 97.05 states, in pertinent part, as follows:
These articles are very often of little intrinsic value but derive their interest from their rarity, their grouping or their presentation. The heading includes…
Collections and collectors’ pieces of historical, ethnographic, paleontological or archaeological interest, for example:
Articles being the material remains of human activity suitable for the study of the activities of earlier generations, such as: mummies, sarcophagi, weapons, objects of worship, articles of apparel, articles which have belonged to famous persons.
By its own terms, heading 9705, HTSUS, applies to articles “of historical interest.” As we have noted in recent rulings, “historic” is not defined in the HTSUS and is defined by lexicographical sources in broad language that leaves the term nearly limitless in scope. See HQ H271385 and HQ H213716, dated June 1, 2015. Consequently, determinations as to whether particular items can be described as articles of historical interest are made on a case-by-case basis and are guided by EN 97.05. According to EN 97.05, such articles bear a connection to specific historical events, eras, points in time, or persons (although not necessarily to all simultaneously), such that they qualify as “material remains of human activity suitable for the study of the activities of earlier generations.” See HQ H271385 and HQ H213716. In addition, they are characteristically of high value or interest on account of, for example, their rarity or grouping.
Accordingly, we have consistently classified cars in 9705 where they boast an inordinately high monetary value driven by their rarity and by their connection, or that of the groups of which they are members, to one or more recognized events or people. In HQ H271385, for example, we classified a 1967 Ferrari 275 NART GTS/4 Spider in heading 9705 where we found that its recent sale for $25 million was commensurate with its historical significance as one of ten cars of its particular make, which had been personally designed and made by Enzo Ferrari at the request of Luigi Chinetti. Similarly, in HQ 962234, dated July 17, 2000, we classified one of the three existing 1936 Bugatti 57Gs in heading 9705 upon finding that it had been registered to Ettoré Bugatti and had been driven to first-place finishes in the 24 Hours of Le Mans and several other races, in heading 9705, HTSUS). Notably, in New York Ruling (NY) L83265, dated March 14, 2005, we classified a $8 million Ferrari 250 GTO 3445 in heading 9705 because it was “among the finest remaining examples” of the Ferrari 250 GTOs and had “won the Trophee D’Auvergne at Charade, France and participated in the 1962 Le Mans and 1962 Tour de France.” See also NY N273457, dated March 30, 2016; NY N254307, dated July 11, 2014; and NY N219015, dated June 18, 2012 (all classifying various racing cars in heading 9705); but see HQ 961279, dated November 5, 1998 (excluding 1929 Bentley Supercharger and 1936 Mercedes-Benz 500K “Special Roadster” from heading 9705 because “[t]here is no claim of a specific incident or occurrence involving these automobiles in a significant historical event and there is no specific claim that these automobiles ‘belonged to famous (historical) persons’”).
As stated above, the 5573GT is one of only three 1964 Ferrari 250 GTOs and one of only thirty-nine total Ferrari GTOs. This degree of rarity is reflected in the 5573GT’s latest sale price of over $40 million, which represents a valuation several hundred times higher than the vehicle’s adjusted retail price. The 5573GT is in fact rarer, and boasts a higher monetary value, than many of the vehicles classified in heading 9705 in the above-cited rulings. Moreover, while the 5573GT’s own racing history is not particularly distinguished, it is a representative member of a class of vehicles that was particularly successful in international racing events between 1962 and 1964. As detailed above, the 5573GT’s fellow 250 GTOs were broadly associated with racing superiority during this period, having accrued multiple consecutive first-place finishes in various prestigious events. The 5573GT consequently bears a connection to a specific racing era marked by Ferrari’s on-track dominance, boasts a high value driven by its rarity, and is an object of interest by virtue of its membership in the group of the historically elite 250 GTOs. With respect to the 5573GT’s previous drivers and owners, our research confirms that the 5573GT was personally driven by Pedro Rodríguez, who was widely considered one of the top drivers of his era, but we were unable to identify verifiable sources indicating that it was also driven by Surtees, Parkes, Bandini, or Scarfiotti, and that it was owned by Chinetti. See O’Neill supra page 1, at 136-37; Sergio Perez, The Rodriguez Brothers – Mexico’s First F1 Superstars, Formula 1, Oct. 29, 2015, https://www.formula1.com/content/fom-website/?en/latest?/features/?2015/?10/the-rodriguez-brothers---mexicos-first-f1-superstars-.html. This is immaterial, however, as the 5573GT need not have belonged to or been used by famous persons so long as it bears a connection to a distinct historical point in time, event or era, which it does. See HQ H271385. Consequently, the 5573GT is described as a “collectors’ piece of historical interest” of heading 9705, HTSUS, and is classified there in accordance with Note 4(a) to Chapter 97. We note that this result is supported by our above-described previous treatment of 1960s-era racing Ferraris, and of Ferrari 250 GTOs in particular. See HQ H271385 and NY L83265.
HOLDING:
By application of GRI 1, the subject 1964 Ferrari 250 GTO, Chassis 5573GT is heading 9705, HTSUS, specifically in heading 9705.00.0091, HTSUSA (Annotated), which provides for “Collections and collectors' pieces of zoological, botanical, mineralogical, anatomical, historical, archeological, paleontological, ethnographic or numismatic interest: Other.” The 2016 general column one rate of duty for subheading 9705.00.0091, HTSUSA, is free.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usitc.gov/tata/hts/.
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