CLA-2-44:OT:RR:NC:4:434
Richard Bennett
Seiko Watch of America
1111 Macarthur Blvd.
Mahwah, NJ 07430
RE: The tariff classification of watch displays from China
Dear Mr. Bennett:
In your letter, dated September 28, 2023, you requested a tariff classification ruling for various watch displays. Samples and a description of each item were submitted for our review.
Item A is a tray designed for displaying watches in a retail store. The tray is made of medium density fiberboard (MDF) covered with polyurethane (PU) plastic sheeting measuring approximately 12” wide by 16.75” long by 3.5” high. In the tray is an insert of PU covered MDF with sixteen indentations designed to hold “cushions.” The removeable cushions are pieces of MDF and foam covered with PU sheeting. When in use a watch will be positioned around each cushion and set in the tray for display.
You propose classification of Item A in subheading 4420.90.8000, Harmonized Tariff Schedule of the United States (HTSUS). We agree.
The applicable subheading for Item A, the display tray with removeable cushions, will be 4420.90.8000, HTSUS, which provides for “Wood marquetry and inlaid wood; caskets and cases for jewelry or cutlery and similar articles, of wood, statuettes and other ornaments, of wood; wooden articles of furniture not falling within chapter 94: Other: Other.” The rate of duty will be 3.2 percent ad valorem.
Item B is identified as three watch blocks (small, medium and large). Each article consists of a base made of MDF covered with PU and a C-shaped clip/holder mounted to the top of the base. The C-shaped clip/holder is predominately made of steel with a small plastic component (70% steel and 30% plastic). Each item is composed of 60% steel, 30% MDF and 10% PU.
In your request, you proposed classification for the watch display identified as Item B under 4420.90.8000, HTSUS, which provides for“ Wood marquetry and inlaid wood; caskets and cases for jewelry or cutlery and similar articles, of wood, statuettes and other ornaments, of wood; wooden articles of furniture not falling within chapter 94: Other.” We disagree.
Item B is comprised of steel, MDF, and PU components that are classified in different headings. Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRIs), taken in order. GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. Since no one heading in the tariff schedule covers the steel, MDF, and PU/plastic components that comprise the item in combination, GRI 1 cannot be used as a basis for classification. GRI 3(b) provides that mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale shall be classified as if they consisted of the material or component which gives them their essential character.
As Item B is a composite article, we must apply rule GRI 3(b), which provides that composite goods are to be classified according to the component that gives the goods their essential character. Explanatory Note (EN) VIII to GRI 3(b) explains 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 the use of the goods.” We must determine whether the steel, MDF or PU plastic component imparts the essential character to watch display Item B. It is the role of the constituent materials or components in relation to the use of the good that imparts the essential character for the display. In this case, the C-shaped clip/holder holds the watch and keeps the watch in a round shape for display. Also, based on the breakdown of materials by weight, the steel predominates by weight over the MDF and PU plastic. Therefore, it is the opinion of this office that the C-shaped clip/holder that is predominantly comprised of steel imparts the essential character to the composite article. In accordance with GRI 3(b), watch display Item B will be classified under heading 7326, HTSUS, which provides for other articles of iron or steel.
The applicable subheading for watch display Item B will be 7326.90.8688, HTSUS, which provides for other articles of iron or steel, other, other…other. The rate of duty will be 2.9 percent ad valorem.
Item C is a watch display comprised of a wedge of MDF covered with PU, a small ramp of zinc steel covered with PU, and a small holder with the loop to hold the watch in place. You indicated the watch display is comprised of 25% zinc steel (0.3kg), 65% MDF (0.7kg), and 10% PU (0.1kg).
In your request, you proposed classification for the watch display identified as Item C under 7326.90.8688, HTSUS, which provides for other articles of iron or steel, other…other. We disagree.
As the watch display is a composite article, we must apply rule GRI 3(b), which provides that composite goods are to be classified according to the component that gives the goods their essential character. We must determine whether the MDF, zinc steel or PU component imparts the essential character to the watch display. It is the role of the constituent materials or components in relation to the use of the good that imparts the essential character of this display. In this case, we do not believe the role of the small zinc steel ramp imparts the essential character to the watch display. Also, based on the breakdown of materials by weight, the zinc steel does not predominate by weight over the MDF. Therefore, it is the opinion of this office that the metal (zinc steel) does not impart the essential character to the composite article. In accordance with GRI 3(b), the watch display will not be classified under heading 7326, HTSUS, which provides for other articles of iron or steel. Rather, the MDF, which predominates by weight and bulk, while also providing the substantial shape and structure of the display, imparts the essential character.
The applicable subheading for Item C, the display ramp, will be 4420.90.8000, HTSUS, which provides for “Wood marquetry and inlaid wood; caskets and cases for jewelry or cutlery and similar articles, of wood, statuettes and other ornaments, of wood; wooden articles of furniture not falling within chapter 94: Other: Other.” The rate of duty will be 3.2 percent ad valorem.
Item D are described as four metal signs used to "call-out" the items being displayed. These are L-shaped, self-standing, tabletop metal signs that are imported with words printed in white on the front. The signs are printed with the following words or phrases in English and Japanese "Arita Porcelain," "Urushi," "Enamel," and "Shippo Enamel.” Each sign measures 50 mm wide by 20 mm high by 10 mm deep. You propose classification in subheading 8310.00.0000, HTSUS. We agree.
The applicable subheading for Item D, the four metal, L-shaped signs with the words "Arita Porcelain", "Urushi", "Enamel" and "Shippo Enamel" printed on them will be 8310.00.0000, HTSUS, which provides for Sign plates, name plates, address plates and similar plates, numbers, letters and other symbols, and parts thereof, of base metal, excluding those of heading 9405. The rate of duty will be Free.
Item E is all of the above display items intended to be sent together, free of charge, to stores that sell Seiko watches. The stores will use the various displays to market the watches. Per the photos supplied, the items are individually wrapped in plastic bags and placed in shipping boxes. They are not packaged together for retail sale and are not intended to be sold. You propose that the goods constitute a set for classification purposes. However, as imported, the items are not “put up in a manner suitable for sale directly to users without repacking” as required under the definition of sets laid out in Explanatory Note X to GRI 3(b). Therefore, each item must be classified separately.
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 World Wide Web at https://hts.usitc.gov/current.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheadings 4420.90.8000, 7326.90.8688, and 8310.00.0000, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, 9903.88.03, in addition to subheadings 4420.90.8000, 7326.90.8688, and 8310.00.0000, HTSUS, listed above.
The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading.
For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
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 Charlene Miller at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division