CLA-2 OT: RR: CTF: TCM H276755 MAB
Mr. David Levine
McDermott Will & Emery, LLP
500 North Capitol Street, NW
Washington, DC 20001
RE: Tariff Classification of Square-Shaped Gold and Silver Bars from Germany
Dear Mr. Levine:
This is in reply to your eRuling request dated April 6, 2016, on behalf of your client, Geiger Edelmetalle, LLC. You seek a binding ruling regarding the tariff classification of square-shaped gold and silver bars, under the Harmonized Tariff Schedule of the United States (HTSUS). Your request included photographs and descriptions of the subject merchandise. You also submitted supplemental comments to the National Commodity Specialist Division (NCSD) via electronic mail dated May 23, 2016. Your request was forwarded to this office for a response.
FACTS:
The subject merchandise is square-shaped gold and silver bars to be used as precious metals commodity investments for institutional and individual investors. The minted bars, made from 99.9% pure gold and silver, will be manufactured in Germany by Geiger Edlemetalle, LLC (Geiger), Leipziger Edelmetallverarbeitung GmbH (LEV). To date, Geiger has manufactured and sold gold and silver bars in elongated rectangular shapes with rounded corners, i.e., with two sides longer than the other two sides. Geiger will now manufacture gold and silver bars in square shapes. Geiger explains that its new square-shaped gold and silver bars will be identical in all respects to its existing rectangular-shaped gold and silver bars except that the sides will all be equal in length.
According to the photographs and descriptions Geiger submitted, its gold and silver bars (or its “Security Line”) contain security features (e.g., use of trademarked designs and a special coating which reacts only with black light) to prevent counterfeiting. Geiger’s submission also includes descriptions of its manufacturing process depending on the weight of its gold and silver bars which range from 1g to 5,000g (5 kg). Bars weighing from 1g to 50g, are produced by rolling pure gold or silver into a sheet of specific thickness, out of which blanks are stamped. The blanks are then annealed, burnished, washed, dried, and stamped. Bars weighing from 50g to 5 kg are manufactured by melting pure gold or silver pellets and pouring the molten metal into molds or various sizes depending on the weight of the bars. The bars are then cooled and stamped.
Regardless of which manufacturing process it uses, Geiger’s gold and silver bars are not otherwise marked or decorated than with weight, purity, and other identifying information. Geiger’s identifying information includes its trademarked stamp or illustration of a building (Castle Guldengossa), name, and the country of origin (Germany). The opposite side of its gold and silver bars are marked with Geiger’s LEV-Rhombus trademark (i.e., its initials of “LEV”).
ISSUE:
Whether the squared-shaped gold and silver bars are articles of precious metal in rectangular or near rectangular shapes of subheadings 7115.90.0530/0560, HTSUS, or “Other” of subheadings 7115.90.3000/4000, HTSUS.
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the United States (HTSUS) is made in accordance with the General Rules of Interpretation (GRI). 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 or legal notes do not require otherwise, the remaining GRIs may then be applied.
The HTSUS provisions under consideration are as follows:
7115 Other articles of precious metal or of metal clad with precious metal:
7115.90 Other:
7115.90.05 Articles of precious metal, in rectangular or near rectangular shapes, containing 99.5 percent or more
by weight of a precious metal and not otherwise
marked or decorated than with weight, purity, or other identifying information
7115.90.0530 Of gold
7115.90.0560 Of silver
***
Other:
7115.90.3000 Of gold, including metal clad with gold
7115.90.4000 Of silver, including metal clad with silver
***
Note 4(a) to Chapter 71 states the following:
The expression “precious metal” means silver, gold and platinum.
CBP has classified rectangular gold and silver bars similar to the instant merchandise under 7115.90.5040 and 7115.90.0560, HTSUS. See N247065, dated November 13, 2013; N246815, dated October 31, 2013; N206915, dated March 20, 2012; J83675, dated May 2, 2003; N200621, dated February 7, 2012; and N204615, dated March 1, 2012. We also have rulings that pertain to the classification of gold or silver in other shapes such as stars or rounds. In these rulings, since the gold or silver bars were not of rectangular shape, we held they were not classified under 7115.90.5040 or 7115.90.0560, HTSUS, but instead were classified under 7115.90.3000 or 7115.90.4000, HTSUS. See N260065, dated January 5, 2015 (classifying a silver star from Germany); N260052, dated December 31, 2014 (classifying a gold star from Switzerland); N260343, dated January 16, 2015 (classifying a gold round bar from Switzerland); and N260757 (classifying a gold round from New Zealand).
Geiger claims that since a square is geometrically a type of rectangle, its square-shaped gold and silver bars are classified in the same subheading as rectangular-shaped gold and silver bars.
In our analysis we must therefore determine whether a square is considered to be a form of a rectangle for purposes of subheading 7115.90.05, HTSUS. A review of the legislation and legislative history establishing the current description of merchandise classified in HTS subheading 7115.90.05 reveals that Congress did not specifically consider the definition of “rectangular.” See 104th Congress Public Law 295, Miscellaneous Trade and Technical Correction Act of 1996 (October 11, 1996), H.R. 3815, Section 15, Tariff Treatment of Certain Silver, Gold, and Platinum Bars (which provided for subheadings 7106.92.10, 7108.13.55, and 7115.90.05); see also Congressional Record – House, H.R. 3815, dated July 30, 1996. Although not stated explicitly, we can reason that the legislation provided for “rectangular or near rectangular shapes” because high purity gold and silver bars traditionally are rectangular but with rounded corners, i.e., “near rectangular.” Since Congress was silent on other shapes, other than rectangular or near rectangular shapes, we look elsewhere for guidance. See Nippon Kogaku (USA) Inc. v. United States, 69 C.C.P.A. 89, 92 (1982) (a tariff term that is not defined in the HTSUS is construed in accordance with its common and commercial meaning); see also C.J. Tower & Sons v. United States, 69 C.C.P.A. 128, 134, 673 F.2d 1268, 1271 (1982) (common and commercial meaning may be determined by consulting dictionaries, lexicons, scientific authorities and other reliable sources).
Dictionaries, mathematics texts, and geometry texts define a square to be a specific kind of rectangle. “A square is a rectangle with the added requirement that all sides are equal in length.” See http://study.com/academy/lesson/rectangle-types-properties-formulas.html. The Merriam-Webster Dictionary defines a rectangle as “a flat geometric four-sided figure with right angles and with opposite sides parallel” and it defines a square as “a rectangle with all four sides equal.” See http://www.merriam-webster.com/dictionary/rectangle; see also http://www.merriam-webster.com/dictionary/square. Similarly, the Oxford English Dictionary also defines a square as “[a] plane rectilinear and rectangular figure with four equal sides.” See http://www.oed.com/search?searchType=dictionary&q=square&_searchBtn=Search.
Various mathematics texts also leave no doubt that a square is a rectangle: “A square is a special case of an isosceles trapezoid, kite, parallelogram, quadrilateral, rectangle, rhombus, and trapezoid.” See Wolfram Mathworld, available at http://mathworld.wolfram.com/Square.html. Finally, according to Math Central, “[t]hus every square is a rectangle because it is a quadrilateral with all four angles right angles. However, not every rectangle is a square, to be a square its side must have the same length.” See http://mathcentral.uregina.ca/QQ/database/QQ.09.07/h/odette1.html. We agree that the mathematical definition of a square is that it is a form of a rectangle.
We find that pursuant to Note 4(a) to Chapter 71, Geiger’s square-shaped gold and silver bars are articles of precious metals. We also find that based upon the common mathematical meaning of squares, the instant merchandise is in rectangular or near rectangular shapes, containing 99.5 percent or more by weight of a precious metal and not otherwise marked or decorated than with weight, purity or other identifying information, i.e., country of origin and its registered trademarks.
For all of the aforementioned reasons, the instant merchandise is classified in subheadings 7115.90.0530 and 7115.90.0560, HTSUS. Because the subheadings completely describe the merchandise, they cannot be classified in subheadings 7115.90.3000 and 7115.90.4000, HTSUS.
HOLDING:
By application of GRIs 1 and 4, the square-shaped gold and silver bars are classified in heading 7115, HTSUS. The square-shaped gold bars are specifically provided for in subheading 7115.90.0530, HTSUS, which provides for “Articles of precious metal, in rectangular or near rectangular shapes, containing 99.5 percent or more by weight of a precious metal and not otherwise marked or decorated than with weight, purity, or other identifying information…Of gold” The square-shaped silver bars are specifically provided for in subheading 7115.90.0560, HTSUS, which provides for “Articles of precious metal, in rectangular or near rectangular shapes, containing 99.5 percent or more by weight of a precious metal and not otherwise marked or decorated than with weight, purity, or other identifying information…Of silver.” The 2016 column one general rate of duty for both subheadings is Free.
Duty rates are provided for your convenience and are subject to change. The test of the most recent HTSUS and the accompanying duty rates are provided at www.usitc.gov.
Sincerely,
Ieva K. O’Rourke, Chief
Tariff Classfication & Marking Branch