OT:RR:CTF:CPMM:ERB/LMH
Ms. Shelley M. Hooker
International Logistics Manager
APMEX, Inc.
226 Dean A. McGee Avenue
Oklahoma City, OK 73102
RE: Revocation of NY N206343, Revocation of NY N260757; Tariff classification of gold rounds
Dear Ms. Hooker:
U.S. Customs and Border Protection (CBP) issued you New York Ruling Letter (NY) N206343, dated January 16, 2015 and NY N260757, dated January 29, 2015. Both rulings pertain to the tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS), of gold rounds, from Switzerland and New Zealand, respectively. We have since reviewed these rulings and find them to be in error, which is described in detail herein.
On June 15, 2016, pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. 1625(c)(1), as amended by section 623 of Title VI, notice of the proposed action was published in the Customs Bulletin Vol. 50, No. 24. No comments were received in response to that notice.
FACTS:
NY N260757 states the following, in relevant part:
The item is identified as the New Zealand Mint, “1 oz. Gold Kiwi.” Present on the obverse surface of the round are the four stars of the Southern Cross, the word in all capitalized letters “AOTEAROA” – the traditional Maori name for New Zealand, and the words in all capitalized letters 1 OUNCE FINE GOLD .9999. Present on the reverse side of the round is the [sic] New Zealand’s iconic flightless bird (the Kiwi) with head held high to reflect the nation’s optimistic and proud spirit, NZ representing the New Zealand Mint, 1 oz, and the words in all capitalized letters NEW ZEALAND GOLD KIWI. This round is not legal tender, has no engraved nominal value, and the purchasing and selling price are determined by the current spot price for its metal content.
The applicable subheading for the 1oz. Gold Kiwi will be 7115.90.3000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for, “Other articles of precious metal, or of metal clad with precious metal: Other: Other: Of gold, including metal clad with gold.” The rate of duty will be 3.9% ad valorem.
NY N206343 states the following, in relevant part:
The item is identified as the “Valcambi Suisse Minted Gold Round Bar.” The item is a 1 oz., gold “minted” round, weighting 31.10 grams, having a fineness of 999,9. [sic] Present on the obverse surface of the round is the Valcambi’s Hallmark (logo, weight, metal, name, fineness, essayeur fondeur [the official stamp of the refinery that manufactured the bullion] and bar number). Present on the reverse surface of the round is the official Valcambi SA Stamp. This round is not legal tender, has no engraved nominal value, and the selling price is determined by the current spot price for its metal content.
Although called a gold round bar, its shape is in the form of a round coin, and is therefore precluded from being classified in subheading 7115.90.0530, of the Harmonized Tariff Schedule of the United States (HTSUS). Consequently, the Valcambi Suisse Minted Gold Round Bar is classified in subheading 7115.90.30000, HTSUS.
The applicable subheading for the Valcambi Suisse Minted Gold Round Bar will be 7115.90.3000, HTSUS, which provides for “Other articles of precious metal or of metal clad with precious metal: Other: Other: Of gold, including metal clad with gold.” The rate of duty will be 2.9% ad valorem.
ISSUE:
Whether the subject gold rounds are classified as goldsmiths’ wares, of heading 7114, HTSUS, or as other articles of precious metal, in heading 7115, HTSUS.
LAW AND ANALYSIS:
Classification under the 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:
7114 Articles of goldsmiths’ or silversmiths’ wares and parts thereof, of precious metal or of metal clad with precious metal:
7114.19.00 Of other precious metal whether or not plated or clad with precious metal.
***
7115 Other articles of precious metal or of metal clad with precious metal:
7115.90. Other:
7115.90.30 Of gold, including metal clad with gold
Note 4(a) to Chapter 71 states the following:
The expression “precious metal” means silver, gold and platinum.
The subject rounds are made of gold, and classification in Chapter 71 is not in dispute.
Note 10 to Chapter 71 states the following:
For purposes of heading 7114, the expression “articles of goldsmiths’ or silversmiths’ wares” includes such articles as ornaments, tableware, toilet-ware, smokers’ articles and other articles of household, office or religious use.
In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System, which constitute the official interpretation of the HTSUS at the international level, may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg 35127 (August 23, 1989).
The EN 71.14, Subpart (E) states the following, in relevant part:
This heading coves articles of goldsmiths’ or silversmiths’ wares as defined in Note 10 to this Chapter wholly or partly of precious metal or metal clad with precious metal. In general these goods are larger than articles of jewellery of heading 71.13; they include:
***
(E) Other articles for domestic or similar use, for example, busts, statuettes and other figures for interior decoration; jewel cases; table centre-pieces, vases, jardinieres; picture frames; lamps, candelabra, candlesticks, chandeliers; mantelpiece ornaments, decorative dishes and plates, medals and medallions (other than those for personal adornment); sporting trophies; perfume burners, etc.
The EN 71.15 states the following, in relevant part:
This heading is therefore largely confined to articles for technical or laboratory use such as crucibles, cupels and certain spatulas (e.g. of platinum or metals of the platinum group); platinum or platinum alloy in the form of cloth or grill for use as catalysts, etc.; vessels (whether or not lined or heat-insulated), not fitted nor designed to be fitted with mechanical or thermal equipment; electroplating anodes. Gold anodes may be in the form of sheets of pure gold cut to the required size and drilled at two corners for attachment of hooks for suspending them in the electro-plating tank. …
We note at the outset that the rounds at issue are not legal tender. They are not struck by a national issuing authority, they do not have a face value, and they cannot be spent in their country of issue. It is for this reason that heading 7118, HTSUS, which provides for coins, is not being considered. See Headquarters Ruling (HQ) H074995, dated July 29, 2010 (classifying gold and silver coins by differentiating legal tender from commemorative coins), and see NY N016199, dated September 11, 2007 (classifying silver commemorative coins).
The classification of imported merchandise is determined by its condition as imported. Amersham Corp. v. United States, 5 C.I.T. 49, 53 (1982), citing Mitsubishi International Corp. v. United States, 78 Cust. Ct. 4, C.D. 4686 (1977). Note 10 to Chapter 71 defines the relevant text of heading 7114, HTSUS. Specifically, it states that articles of goldsmiths’ wares includes “ornaments”. The term “ornament” is not defined in the tariff, and as such, it must be construed in accordance with its common and commercial meanings. See Nippon Kogasku (USA) Inc., v. United States, 69 C.C.P.A. 89, 673 F.2d 380 (1982). The common meaning of a term used in commerce is presumed to be the same as its commercial meaning. Simod Am. Corp. v. United States, 872 F.2d 1572, 1576 (Fed. Cir. 1989). To ascertain the common meaning of a term, a court may consult, "dictionaries, scientific authorities, and other reliable information sources" and "lexicographic and other materials." C.J. Tower & Sons v. United States, 69 C.C.P.A. 128, 673 F.2d 1268, 1271 (C.C.P.A. 1982); Simod, 872 F.2d at 1576. As the courts are so empowered, it is prudent for CBP to do so as well. Merriam-Webster defines “ornament” as a small fancy object that is put on something else to make it more attractive; a useful accessory; something that lends grace or beauty. Merriam-Webster defines “decorative” as an object which is purely ornamental, as opposed to an object with a utilitarian function.
The ENs to heading 71.14 clarify the tariff text “other articles for domestic or similar use” as including figures for interior decoration, mantelpiece ornaments, medals and medallions, among other listed articles. The myriad listed articles vary in size, shape, and purpose and so it could be challenging to find unifying characteristics beyond aesthetics. However, in this context, the use of the word “etc.” [etcetera] indicates that this list is not exhaustive, but rather is illustrative. Medals and medallions, which are provided for in the ENs, share similar characteristics as commemorative coins insofar as they are for decorative or ornamental use, to be viewed and enjoyed by their owner or guests, or could be given as gifts to memorialize a certain event or milestone. They are unlikely to be hoarded to build wealth or maintain oneself in a downward economy. As such, the subject coins are classified alongside medals and medallions, or decorative ornaments, and are properly classified in heading 7114, HTSUS, as an article of goldsmiths’ wares.
This is consistent with prior CBP rulings on commemorative coins. See NY N200016, dated January 24, 2010; NY N200017, dated January 24, 2010; NY N249940, dated February 20, 2014; NY R01031, dated November 15, 2004; NY A86378, dated August 6, 1996.
Furthermore, the tariff text itself, as well as the EN 71.15, clarifies that heading 7115 is reserved for articles for technical or laboratory use, and the subject coins have no technical or laboratory use. See EN 71.15, and see NY N264210, dated May 19, 2015 (classifying 24K gold flakes in a solution of butylene glycol in subheading 7115.90.3000, HTSUSA, because gold flakes in a solution of 99 grams of butylene glycol which is added to a cosmetic lotion post-importation in the manufacture of skincare products are not an article of goldsmiths’ wares). See also Salem Minerals Inc. v. United States, 34 Int’l Trade Rep. (BNA) 1747, Slip Op. 12-88 (Ct. Int’l Trade June 26, 2012), where the Court of International Trade found that “gold leaf vials filled with clear liquid” lacked any constituent component that a goldsmith would make and that the goods could not be concluded to be more than the sum of their constituent parts. In other words, “taken as a whole, those gold leaf vials do not reach to the level of the work, or the ware, of a goldsmith within the purview of HTSUS heading 7114.” Id * 21. Consequently, the court held that the gold leaf vials were properly classifiable under subheading 7115.90.30, HTSUS.
HOLDING
By application of GRI 1, the subject “Valcambi Suisse Minted Gold Round Bar” and the New Zealand “1 oz. Gold Kiwi” commemorative coins are classified in heading 7114, HTSUS. They are specifically provided for in subheading 7114.19.00, HTSUS, which provides for, “Articles of goldsmiths’ or silversmiths’ wares and parts thereof, of precious metal or of metal clad with precious metal: Of other precious metal whether or not plated or clad with precious metal.” The column one general rate of duty is 7.9% ad valorem.
Duty rates are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided at www.usitc.gov.
EFFECT ON OTHER RULINGS
NY N206343, dated January 16, 2015, and NY N260757, dated February 2, 2015, are hereby REVOKED.
In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after publication in the Customs Bulletin.
Myles B. Harmon, Director
Commercial and Trade Facilitation Division