CLA-2-91:OT:RR:NC:N5:113
Mr. William Beames
Timex Group USA
555 Christian Road Middlebury, CT 06762
RE: The tariff classification and country of origin of watch chokers
Dear Mr. Beames:
In your letter dated October 25, 2024, you requested a tariff classification and country of origin determination ruling. Photographs of the watch choker were submitted for our review. In an email dated October 30, 2024, you provided additional information including product specifications and the production process.
The product under consideration is identified as a watch choker and described as a quartz analog watch head incorporated in a neck choker. The watch head features a rectangular dial with a second hand, a minute hand, and an hour hand. You stated in your email that The watch head is made of stainless steel and contains a movement that is made in Japan. The watch head will have no jewels, one jewel, two jewels, or three jewels in the movement. The choker will be made from leather wrapped in a microfiber. It will be made in China. The watch head and neck choker will be permanently fastened together with a clasp in China and then imported into the United States as one piece.
The watch choker is a composite article that is comprised of a watch head and a neck choker that are classified in different headings. Classification of merchandise under the Harmonized Tariff Schedule of the United States (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 schedules covers the components that comprise the watch choker 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 the watch choker is a composite good, 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 watch head or the neck choker imparts the essential character to the watch choker. It is the role of the constituent materials or components in relation to the use of the good that imparts the essential character. In this case, the function of the watch choker is to tell time, and the watch head performs the function of telling time. Therefore, it is the opinion of this office that the watch head imparts the essential character to the composite article. In accordance with GRI 3(b), the watch choker will be classified in heading 9102, HTSUS, which provides for Wrist watches, pocket watches and other watches, including stop watches, other than those of heading 9101, HTSUS.
The applicable subheading for the watch choker that has no jewels or only one jewel in the movement will be 9102.91.40, HTSUS, which provides for Wrist watches, pocket watches and other watches, including stop watches, other than those of heading 9101: Other: Electrically operated: Other: Having no jewels or only one jewel in the movement. The rate of duty will be 40 cents each plus 6 percent on the case plus 5.3 percent on the battery.
The applicable subheading for the watch choker that has two or three jewels in the movement will be 9102.91.80, HTSUS, which provides for Wrist watches, pocket watches and other watches, including stop watches, other than those of heading 9101: Other: Electrically operated: Other: Other. The rate of duty will be 76 cents each plus 6 percent on the case plus 5.3 percent on the battery.
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 at https://hts.usitc.gov/.
The "country of origin" is defined in 19 CFR 134.1(b) as "the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the 'country of origin' within the meaning of this part.
The courts have held that a substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff'd, 989 F. 2d 1201 (Fed. Cir. 1993); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982).
However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff'd, 702 F.2d 1022 (Fed. Cir. 1983). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987).
Regarding the country of origin of watches, HQ 306338 dated May 14, 2021, stated that CBP's long-standing position has been that the origin of a watch (excluding the strap, band or bracelet) is the country of assembly of the watch movement. Although the addition of the hands, dial, case or watchband may add definition to the timepiece, it does not substantially change the character or use of the watch movement, which is the essence of the watch. The country of assembly of the watch movement in the subject watch head is Japan, therefore, the country of origin of the watch head is Japan. You indicated the country of origin of the neck choker will be China.
To determine whether a substantial transformation occurs when components of various origins are assembled into completed products, all factors such as the components used to create the product and manufacturing processes that these components undergo are considered in order to determine whether a product with a new name, character, and use has been produced. No one factor is decisive, and assembly operations that are minimal will generally not result in a substantial transformation.
Based the information provided in your emails, the country of origin of the neck choker is China, and the country of origin of the watch head is Japan. Regarding the manufacturing/assembly processes performed to arrive at the watch choker in condition as imported into the United States, you indicated that The watch head and neck choker will be permanently fastened together with a clasp in China. The watch head and choker will be assembled in China and then imported into the United States as one piece.
Regarding the country of origin for the watch choker, it is the opinion of this office that the watch head and choker have not undergone enough of a change in China to afterwards emerge with a new name, character, and use that is different from what they possessed prior to the assembly process. Therefore, the minor/minimal assembly operation performed in China which merely attaches/fastens the watch head to the choker does not substantially transform the watch head and choker into a new and different article of commerce with a changed character and use. Since the country of assembly of the watch movement in the subject watch head is Japan, the country of origin of the watch head is Japan.
In our opinion, the choker that will be made from leather wrapped in a microfiber is similar to a wrist strap or band. As stated in HQ 734565 dated October 16, 1992:
Customs has also determined that the country of origin of the watch strap must be separately marked with its country of origin.See HQ 733533, August 3, 1990; HQ 731546, October 27, 1988. This is because the attachment of the watch strap to the watch does not effect a substantial transformation of the watch strap; after attachment, the strap maintains its separate identity.
You indicated that the neck choker will be made in China. Therefore, the country of origin of the choker, which is similar to a watch strap or band, will be China.
Please note that you must separately break out the value of the choker apart from the value of the watch on the entry form. This will enable Customs and Border Protection to assess the proper amount of 301 duties on the choker.
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 and Border Protection 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, please contact National Import Specialist Ann Taub at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division