OT:RR:CTF:CPMM H268650 MAB
Mr. Anurag Chopra
Marathon Tools, Inc.
10432 Balls Ford Road, #300
Manassas, Virginia 20109
RE: Revocation of NY L83439; Classification of wood fence post bracket assembly
Dear Mr. Chopra:
On March 25, 2005, U.S. Customs and Border Protection (CBP) issued New York Ruling Letter (“NY”) L83439 to you on behalf of Marathon Tools, Inc., classifying a wood fence post bracket assembly in heading 7326 of the Harmonized Tariff Schedule of the United States (HTSUS). After reviewing NY L83439, we have found that ruling to be in error with respect to the tariff classification.
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 proposing to revoke NY L83439 was published on April 24, 2019, in Volume 53, Number 12, of the Customs Bulletin. One comment was received in response to this Notice, and is addressed in the ruling below.
FACTS:
The merchandise at issue is a wood fence post bracket assembly. The item is used to support a live wire on an electrified fence. It is composed of a wood fence post bracket, a corresponding locknut, and a bobbin.
The wood fence post bracket is an L-shaped, zinc-plated, steel rod measuring approximately three-eighths (3/8) of an inch in diameter and eight (8) inches in length. One end of the rod has coarse (wood screw) threading and a sharp point, which is designed to screw into a wood fence post or a tree. The rod is bent at an approximate right angle roughly six (6) inches from the point. The opposite end of the rod is not pointed and has fine (machine screw) threading to accommodate the locknut. The net weight of the wood fence post bracket is approximately 112 grams. The locknut is made of zinc-plated steel and an injection molded nylon insert. It is designed to hold the plastic bobbin in place when torqued onto the fine thread of the wood fence post bracket. The net weight of the locknut is approximately 11 grams. The insulator bobbin is made of injection molded plastic. It measures approximately one and three-fifths (1-3/5) inches in diameter and one (1) inch in width. When in use, fence wire passes through the bobbin’s groove. The net weight of the insulator bobbin is approximately 20.26 grams.
In NY L83439, CBP classified the instant wood fence post bracket assembly in heading 7326, HTSUS, which provides for “Other articles of iron or steel.”
ISSUE:
Whether the wood fence post bracket assembly is considered “Other articles of plastics and other materials of heading 3901 to 3914” of heading 3926, HTSUS, or “Screws, bolts, nuts…and similar articles, of iron and steel” of heading 7318, HTSUS, or “Other articles of iron or steel” of heading 7326, 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.
GRI 3 provides, in pertinent part, that when goods are prima facie, classifiable under two or more headings, classification shall be effected by the following:
(a) [t]he heading which provides the most specific heading shall be preferred to headings providing a more general description. However, … when two or more headings each refer to part only of the items in a set, those headings are to be regarded as equally specific, even if one of them gives a more complete or precise description of the goods. (b) … goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character … (c) [w]hen 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.
The 2018 HTSUS provisions under consideration are as follows:
3926 Other articles of plastics and articles of other materials of heading 3901 to 3914:
**********
7318 Screws, bolts, nuts, coach screws, screw hooks, rivets, cotters, cotter pins, washers (including spring washers) and similar articles, of iron or steel:
**********
7326 Other articles of iron or steel:
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not legally 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. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
Explanatory Note VII to GRI 3(b) states 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.
In NY L83439, CBP classified the instant wood fence post bracket assembly in heading 7326, HTSUS, by application of GRI 1. However, we find the analysis used for classifying the instant article is incorrect. The wood fence post bracket assembly is a composite good consisting of different components (i.e., the wood fence post bracket made of steel with corresponding locknut and plastic bobbin), each of which, if imported separately, would be classifiable under different tariff headings. Accordingly, we find that the classification of this product should be determined on the basis of GRI 3(b) or 3(c) and not GRI 1.
Thus, we will first consider the correct classification of the wood fence post bracket made of steel with corresponding locknut.
Heading 7326, HTSUS, covers a wide range of iron or steel articles that are not more specifically provided for elsewhere in the HTSUS, whereas heading 7318 provides for more specific articles. In particular, subheading 7318.15.50, HTSUS, provides for threaded studs made of iron or steel, whether or not with their nuts or washers.
The definition of a stud was addressed in Informed Compliance Publication (ICP) “What Every Member of The Trade Community Should Know About: Fasteners of Heading 7318” (April 2012). CBP defined a stud as “a threaded fastener with one end anchored or fixed in place to provide a projection to which something may be attached by a nut or other fastener.” Id. at 11.
It is our determination that the wood fence post bracket made of steel in the instant case meets the definition of a stud as described in the aforementioned ICP. One end of the bracket (or rod) has coarse (wood screw) threading and a sharp point which is designed to screw into a wood fence post or a tree. The opposite end of the bracket (or rod) is not pointed and has fine (machine screw) threading to accommodate the locknut and bobbin. Therefore, the instant wood fence post bracket made of steel is classified in heading 7318, HTSUS, and specifically in subheading 7318.15.50, HTSUS, as “Screws, bolts, nut,…and similar articles, of iron or steel: Threaded articles: Other screws and bolts, whether or not with their nuts or washers: Studs.” Because the instant wood fence post bracket made of steel is described more specifically in another heading, it is not classified in heading 7326, HTSUS.
We note that in N265109, dated June 12, 2015, CBP classified a similar wood fence post bracket and corresponding locknut made of steel in heading 7318, HTSUS, and specifically in subheading 7318.15.50, HTSUS. We concur with this classification.
The fact that the instant L-shaped rod is bent at a right angle does not preclude its classification as a stud in heading 7318, HTSUS. In N059835, dated May 20, 2009, CBP classified a threaded steel foundation rod with a right angle bend at one end in heading 7318, HTSUS, and specifically in subheading 7318.15.50, HTSUS.
In NY G81864, dated September 11, 2000, CBP classified a steel extension bracket for an electric fence in subheading 7326.90.85, HTSUS. This L-shaped bracket measured eight (8) inches long by three (3) inches wide and had a plastic clip at its tip to fold an electric wire six (6) inches from the fence post. Although it served a similar function, we note that this article differed significantly from the instant merchandise because it did not meet the definition of a stud of heading 7318, HTSUS.
In regard to the classification of the plastic bobbin, it falls under chapter 39 (“Plastics and Articles Thereof”), and is classified in heading 3926, HTSUS, as “Other articles of plastic…” Specifically, it is classified in subheading 3926.90.9996, HTSUSA, as “Other articles of plastics…Other: Other…Other.” (See NY N170381, dated June 20, 2011, classifying plastic bobbins from China in subheading 3926.90.99, HTSUS.)
According to GRI 3(b), composite goods consisting of different materials or made up of different components shall be classified as if they consisted of the material or component which gives them their essential character. Although the GRIs do not provide a definition of “essential character,” EN (VIII) of GRI 3(b) provides guidance. According to this EN, the essential character may 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.
Based on a physical examination of the instant article and information provided by the importer, the steel rod and locknut predominate by weight, bulk, and value over the plastic insulator bobbin. However, the plastic bobbin performs an essential role of holding a live wire on an electrified fence.
In Headquarters Ruling Letter (HQ) H013681, dated June 27, 2008, CBP classified screw and anchor sets comprised of plastic anchors and steel screws in heading 7318, HTSUS, by application of GRI 3(c). CBP noted that the plastic anchors expand and grip the surface of a wall as the screw is tightened. The anchors provide strength and stability, which reinforce the set’s ability to support and mount heavy items. However, without the mounting capability of the screw, the anchor could not function. Although the effectiveness of the set would be greatly reduced without the anchor, standing alone, the screw has the independent ability to mount or fasten articles to a wall. CBP determined that both the screw and anchor were equally essential in performing the primary purpose of the set, and accordingly, neither imparted the essential character.
We find the rationale CBP employed in HQ H013681 to be persuasive in determining the instant case. (See also HQ 953095, dated April 15, 1993, NY I83699, dated June 25, 2002, and NY I84859, dated August 8, 2002; these rulings reflect CBP’s consistent classification of substantially similar screw/anchor kits under heading 7318, HTSUS.)
It is therefore our view that neither component of the instant wood fence post bracket assembly imparts the essential character of the subject merchandise. The plastic bobbin performs the role of holding and insulating the electrified wire, while the steel stud and locknut perform the role of securely mounting the bobbin to a fence or tree. Although the bobbin is the only component that comes in physical contact with the wire, it could not perform its intended function without the strength and support provided by the stud and locknut. Although the stud and locknut make up the greater weight, bulk, and value, without the bobbin, the stud alone cannot carry out the specific activity or function of supporting a live wire on an electrified fence. Thus, CBP regards the stud with locknut and the bobbin to be equally essential to the use of the article. Accordingly, GRI 3(b) is not applicable and we must turn to GRI 3(c).
GRI 3(c) provides that when goods cannot be classified by reference to GRI 3(a) or 3(b), they are to be classified in the heading that occurs last in numerical order among those which equally merit consideration. If imported separately, the stud and locknut would be classified together in heading 7318, HTSUS, while the plastic bobbin would be classified in heading 3926, HTSUS. Consequently, by application of GRI 3(c), we find that the correct classification of wood fence post bracket assembly is under heading 7318, HTSUS, as, “[s]crews, bolts, nuts, coach screws, screw hooks, rivets, cotters, cotter pins, washers (including spring washers) and similar articles of iron or steel.”
The comment received in response to this notice agrees that we reached the correct classification of the wood fence post bracket assembly but suggests that we include GRI 2(b) in our analysis due to the multiple materials under consideration. GRI 2(b) states in pertinent part that the classification of goods consisting of more than one material or substance shall be according to the principles of GRI 3. As described above, the two components of the wood fence post bracket assembly are the plastic bobbin and the steel stud and locknut. We therefore agree with the commenter that GRI 2(b) should be included in our analysis as it directs us to apply GRI 3.
HOLDING:
By application of GRIs 1, 2(b) and 3(c), the wood fence post bracket assembly is classified in heading 7318, HTSUS. Specifically, it is provided for in subheading 7318.15.5090, HTSUSA, which provides for: “Screws, bolts, nuts, coach screws, screw hooks, rivets, cotters, cotter pins, washers (including spring washers) and similar articles. Of iron or steel: Threaded articles: Other screws and bolts, whether or not with the nuts or washers: Studs: Other: Other.” The column one, general rate of duty is 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 the internet at www.usitc.gov/tata/hts/.
The merchandise in question may be subject to antidumping duties or countervailing duties (AD/CVD). We note that the International Trade Administration in the Department of Commerce is not necessarily bound by a country of origin or classification determination issued by CBP, with regard to the scope of antidumping or countervailing duty orders. Written decisions regarding the scope of AD/CVD orders are issued by the International Trade Administration and are separate from tariff classification and origin rulings issued by CBP. The International Trade Administration can be contacted at http://www.trade.gov/ia/. A list of current AD/CVD investigations at the United States International Trade Commission can be viewed on its website at http://www.usitc.gov. AD/CVD cash deposit and liquidation messages can be searched using ACE, the system of record for AD/CVD messages, or the AD/CVD Search tool at http://addcvd.cbp.gov/index.asp?ac=home.
EFFECT ON OTHER RULINGS:
NY L83439, dated March 25, 2005, is REVOKED.
In accordance with 19 U.S.C. § 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division