CLA-2-71:OT:RR:NC:N4:433
Laurie Lewis
Classification Specialist
Liz Claiborne Inc.
One Claiborne Avenue
HQ2, 7th Floor
North Bergen, NJ 07047
RE: The tariff classification of two pairs of earrings from China.
Dear Ms. Lewis:
In your letter dated June 20, 2011, you requested a tariff classification ruling. As requested, the sample will be returned to you.
Sample SRE9 is a retail set of two pairs of earrings. Both pairs of earrings are presented on a decorative brown card, with the Lucky Brand logo printed upon the card. The first pair of earrings is a design of leaves attached to a stem, made of base metal, with sterling silver ear posts and butterfly clutches. The design has five leaves, with each leaf having an imbedded small glass jewel. The second pair of earrings is an ornamented round design, with an inner design of flower petals, made from base metal, with gold filled ear posts and butterfly clutches.
Classification of goods under the Harmonized Tariff Schedule of the United States (HTSUS) is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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 GRI may then be applied.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While neither 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. 89-90.
Legal Note 2 (a) to Chapter 71, HTSUS, 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). Further the ENs to the HTSUS, in pertinent part, at heading 7113, the provision for “articles of jewelry and parts thereof, of precious metal or of metal clad with precious metal,” state: to fall in this heading these articles must contain precious metal or metal clad with precious metal (including base metal inlaid with precious metal) to an extant exceeding minor constituents; (thus a cigarette case of base metal with a simple monogram of gold or silver remains classified as an article of base metal). Another example of minor constituents is a pearl necklace with a gold fastener, in which, the fastener was considered to be of minor constituents – see ENs for heading 7116, HTSUS.
An inspection of the first pair of earrings indicates that the sterling silver ear posts and butterfly clutches used in the formation of the earrings are of more than minor constituents, in that the posts along with their clutches are required for purposes of wearing such ornamentation. As such, the first pair of earrings is classified in heading 7113, HTSUS. A review for the term “gold filled” indicates gold which is bonded to a base metal in a cladding process. As the gold filled posts and clutches of the second pair of earrings are formed in a cladding process and are of more than minor constituents used in the formation of the earrings, the second pair of earrings is classified in heading 7113, HTSUS.
With the two pairs of earrings classified in heading 7113, the issue becomes the proper ten-digit subheading classification for the items. Accordingly, GRI 6 is implicated. GRI 6 provides that the classification of goods at the subheading level shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules [GRIs 1 - 5], on the understanding that only subheadings at the same level are comparable. Since the earrings are prima facie classifiable in more than one subheading and are sold as a set resort to GRI 3 is necessary.
Noting the applicable GRIs: by application of GRI 6, we turn to GRI 3 which states, in relevant part, that when goods are prima facie classifiable under two or more (sub)headings, classification shall be determined as follows:
3 (b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3 (a) [by reference to the (sub)heading which provides the most specific description], shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
3 (c) When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.
Providing insight on the term “essential character,” EN (VIII) to GRI 3(b) provides that the 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. When the essential character of a composite good can be determined, the whole product is classified as if it consisted only of that material or component which imparts the essential character to the composite good.
Further delineated, EN (X) to GRI 3 (c) provides that for the purposes of this Rule, the term “goods put up in sets for retail sale” shall be taken to mean goods which: (a) consist of at least two different articles which are, prima facie, classifiable in different headings . . .; (b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and (c) are put up in a manner suitable for sale directly to users without repacking (e.g., in boxes or cases or on boards).
For the two pairs of earrings, sold together, we find that the good meets the tariff conditions to be called a set, in that (1) the first pair of earrings: stems with leaves, made of base metal, having silver posts and clutches is classified in subheading 7113.11 (of precious metal whether or not plated or clad with precious metal; of silver), and the second pair of earrings: flower petals, made of base metal, having gold filled posts and clutches is classified in subheading 7113.20 (of base metal clad with precious metal); (2) both items are used and worn upon the body for personal adornment; and (3) the two pairs of earrings are packaged for retail sales.
Although recognized as a set for tariff purposes, we are unable to determine an essential character for the two pairs of earrings, packaged together, for retail sales. Both items are unique in design, equally appealing, and are the personal selection of the purchaser to be worn. Consequently, no essential character for the set of earrings can be determined, resulting in classification falling last numerically to subheading 7113.20, HTSUS.
The applicable subheading for set of earrings, sold together, will be 7113.20.5000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Articles of jewelry and parts thereof, of precious metal or of metal clad with precious metal: Of base metal clad with precious metal: Other: Other.” The rate of duty will be 5.2% ad valorem.
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 World Wide Web at http://www.usitc.gov/tata/hts/.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Neil H. Levy at (646) 733-3036.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division