CLA-2-97:OT:RR:NC:N4:433
Sara Rider
Attorney in Fact
Martin E. Button Inc.
55 New Montgomery Street, Suite 400
San Francisco, CA 94105
RE: The tariff classification of a Porsche, Dauer 962, Chassis No. 962-176 from Germany.
Dear Ms. Rider:
In your letter dated July 20, 2016, on behalf of Jeffery C. Sprecher, you requested a tariff classification ruling.
The merchandise concerned is the Porsche, Dauer 962, Chassis No. 962-176. The Dauer 962 is a converted Porsche 962 racecar made into a road legal GT (Grand Touring) car. Dauer planned to build 50 cars, but only 13 were completed before the company was closed.
In spite of only 13 cars being built, Porsche’s use of the Dauer 962 was for competition at the 1994 Le Mans 24 Hours race. The 24 Hours of Le Mans (French: 24 Heures du Mans) is the world’s oldest active sports car race in endurance racing, held annually since 1923 near the town of Le Mans, France. Sports car racing is a form of circuit auto racing with sports cars that have two seats and enclosed wheels; they may be purpose-built (Prototype) or related to road-going models (GT). Le Mans is one of the most prestigious automobile races in the world and is often called the Grand Prix of “Endurance and Efficiency.” This event represents one leg of the Triple Crown of Motorsport with the other events being the Indianapolis 500 and the Monaco Grand Prix.
Although Porsche used some of Dauer’s “development work,” the entire program to make a new and competitive 962 for the 24 Hours Le Mans was undertaken by Porsche’s race department employees at Weissach. Porsche completed three Dauer sport cars for the 1994 running of the 24 Hours Le Mans: the Dauer LM GT 001 (chassis 962-169), Dauer LM GT 002 (chassis 962-173), and the Dauer LM GT 003 (chassis 962-176). However, only the Dauer LM GT 002 (chassis 962-173) and the Dauer LM GT 003 (chassis 962-176) competed in the 24 Hours Le Mans. All three of the cars were retired after this race because of the organizing body for the annual Le Mans 24 Hours race, the Automobile Club de l'Ouest (English: Automobile Club of the West), sometimes abbreviated to ACO, changing its regulations and rules pertaining to the class of sport cars known as GT.
It is recorded in the 1994 annals of Le Mans’ history, June 19, 1994, that the Porsche, Dauer LM GT 003 (chassis 962-176) was the overall winner, taking 1st place completing 345 laps, and that the Porsche, Dauer LM GT 002 (chassis 962-173) took 3rd place. We note that the three drivers of the Dauer LM GT 003 (chassis 962-176), Mauro Baldi, Yannick Dalmas and Hurley Haywood are all known and accomplished race car drivers of their time. Baldi and Dalmas, although no wins or podiums, also competing in Formula One racing.
Classification under the Harmonized Tariff Schedule of the United States (HTSUS) is made in accordance with the General Rules of Interpretation (GRIs). 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.
The HTSUS provisions under consideration in this case are as follows:
Heading 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:
Heading 9705: Collections and collectors’ pieces of zoological, botanical, mineralogical, anatomical, historical, archeological, paleontological, ethnographic or numismatic interest:
Legal Note 4 to Chapter 97, HTSUS, states, in relevant part:
(a) 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.
When interpreting and implementing the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, while neither legally binding nor dispositive, provide a guiding commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. CBP believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The ENs to heading 9705, HTSUS, state: These articles are very often of little intrinsic value but derive their interest from their rarity, their grouping or their presentation. The heading in pertinent part includes:
(B) Collections and collectors’ pieces of historical, ethnographic, paleontological or archaeological interest, for example: (1) 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.” There exists no strict standard or enumerated criteria for articles classified in heading 9705, HTSUS. The word “historic” is not defined by the tariff, nor by the ENs, and the dictionary definition is quite broad. The Online Oxford English Dictionary for the meaning of “historic” states: at A. n., 1., “A historical work or subject; a history. Now rare” and at B. adj., 1., “Relating to history; concerned with past events.”
In light of this, we turn to the ENs to inform and shape our understanding of the scope of the heading, but with the caveat that the ENs are used for guidance only in interpretation of the HTSUS. The ENs explain the scope of headings, often by means of exemplars, of which these examples are not necessarily all inclusive or all restrictive. The ENs should not restrict or expand the scope of headings, rather, they should describe and elaborate on the nature of goods falling within those headings, as well as the nature of goods falling outside of those headings. Thus, items purporting to be classified in heading 9705 must be examined on a case-by-case basis, considering all the relevant factors involved.
Pursuant to the ENs, articles of “historical interest” classified in heading 9705, HTSUS, are done so by virtue of their rarity, age, grouping and/or presentation, connection to a specific historical event or era or point in time, and belongings of famous persons. Automobiles present an interesting conundrum in a heading 9705, HTSUS, analysis, as cars and sport cars (even luxury ones) are generally mass-produced for commercial consumption. Goods produced as a commercial undertaking to commemorate, celebrate, illustrate, or depict an event or any other matter, whether or not production is limited in quantity or circulation, do not fall in heading 9705, HTSUS, as collections or collectors’ pieces of historical interest unless the goods themselves have subsequently attained that status by reason of their age or rarity. With that said, in circumstances where an automobile is very rare, nearly one of a kind, not mass produced for commercial purposes and satisfies the condition for items of historical significance, then that car may be considered collectors’ items for tariff classification purposes.
We find that the Porsche, Dauer 962, Chassis No. 962-176, as well as the other two chassis, are not mass produced and therefore are not considered a commercial undertaking. The purpose of the three sport cars, although short lived, was to compete at GT sponsored racing events; to that end, the Dauer 962, Chassis No. 962-176, finished in its only race with a first place victory that was recorded in the history books of GT racing, of which the 24 Hours Le Mans is a part of. Even though not necessary, the well-known and accomplished race car drivers have obtained the status of being famous in their time. The rarity of the car being one of three, the famous drivers who drove the car to victory, the multi-million dollar price tag, and more importantly, the car itself being recording in the history books of GT racing, places the car within the category of a collectors’ pieces of historical interest.
The applicable subheading for the Porsche, Dauer 962, Chassis No. 962-176, will be 9705.00.0070, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Collections and collectors’ pieces of zoological, botanical, mineralogical, anatomical, historical, archeological, paleontological, ethnographic or numismatic interest: Archaeological, historical, or ethnographic pieces.” The rate of duty will be 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 World Wide Web at https://hts.usitc.gov/current.
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 [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division