MAR/CLA-2-91:OT:RR:NC:N4:414
TARIFF NOS.: 9111.10.00; 9111.20.20; 9111.20.40; 9111.80.00; 9113.20.20; 9113.20.40; 9114.30.40; 9114.30.80; 9114.90.40
Mr. Michael O’Rourke
Rode & Qualey
55 West 39th Street
New York, NY 10018
RE: Country of origin marking and classification of imported parts of watch movements and watch parts
Dear Mr. O’Rourke:
In your letter dated June 10, 2011, on behalf of Bedrock Manufacturing Co. (Bedrock), you requested a country of origin marking ruling and a tariff classification ruling.
In your letter, you propose marking the containers in which parts of watch movements and parts of watches are imported with the country of origin of the parts, in lieu of marking the parts themselves.
Bedrock intends to import parts of watch movements from Switzerland. Dials, hands and stems and other watch parts will also be imported from Switzerland. Watch cases will be imported from China or from other countries. Metal watch bracelets may be sourced from China. Leather watch straps will be manufactured in the United States.
The watch movement parts will be assembled in the United States into a complete watch movement. According to your letter, assembling the backside of the watch movement is a 27-step process and creating the dial side of the watch movement is a 16-step process. Subsequently, the watch movement will be assembled with other watch parts into a complete watch in the United States.
You state in your letter that individual packages of parts, as imported, will not consist of complete watch movements, unassembled or partially assembled movement sets or all parts necessary to assemble the watch movements. Further, you state that at no time will a specific entry or entries made on the same day, using the same carrier, consist of all the parts necessary to assemble a watch movement.
The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.
Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.41(b), Customs Regulations (19 CFR 134.41(b)), mandates that the ultimate purchaser in the U.S. must be able to find the marking easily and read it without strain. Section 134.1(d) defines the ultimate purchaser as generally the last person in the U.S. who will receive the article in the form in which it was imported. 19 CFR 134.1(d)(1) states that if an imported article will be used in manufacture, the manufacturer may be the ultimate purchaser if he subjects the imported article to a process which results in a substantial transformation of the article. The case of U.S. v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940), provides that an article used in manufacture which results in an article having a name, character or use differing from that of the constituent article will be considered substantially transformed and that the manufacturer or processor will be considered the ultimate purchaser of the constituent materials. In such circumstances, the imported article is excepted from marking and only the outermost container is required to be marked. See, 19 CFR 134.35.
The imported parts of the watch movements and the parts of the watches, for example, the cases, dials, hands, and stems, are substantially transformed as a result of the U.S. processing. Accordingly, the U.S. processor is the ultimate purchaser of the imported watch movement parts and watch parts and under 19 CFR 134.35 only the containers which reach the ultimate purchaser are required to be marked with the country of origin of the watch movement parts and the watch parts.
You have indicated that if metal bracelets are used on the watches, it is likely that they will be sourced from China. Bedrock plans to attach to each finished watch a hand tag or an information booklet, and the hang tag or information booklet will identify the country of origin of the metal bracelets.
In your letter, you indicate that Bedrock proposes to mark the watches on the case back with “Movement Made in USA w/ Swiss Parts” or “Movement Assembled in USA w/ Swiss parts”. Customs has consistently held that the country of origin of a watch is the country of manufacture of the watch movement. However, whether an article may be marked “Made in the USA” or with other similar words, is an issue under the authority of the Federal Traded Commission (FTC). We suggest that you contact the FTC Division of Enforcement, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580 on the propriety of the proposed markings.
Section 134.43(b), Customs Regulations (19 CFR 134.43(b)), in conjunction with section 11.9 Customs Regulations ((19 CFR 11.9), provides that watches must also be marked in accordance with chapter 91, Additional U.S. Note 4 of the Harmonized Tariff Schedule of the United States (HTSUS). The note states:
With the following exceptions, any movement or case provided for in this chapter, whether imported separately or attached to an article provided for in this chapter, shall not be permitted to be entered unless conspicuously and indelibly marked by cutting, die-sinking, engraving, stamping (including by means of indelible ink), or mold-marking (either indented or raised), as specified below. Movements with opto-electronic display only and cases designed for use therewith, whether entered as separate articles or as components of assembled watches or clocks, are excepted from the marking requirements set fort in this note. The special marking requirements [for watches] are as follows:
(a) Watch movements shall be marked on one or more of the bridges or top plates to show: (i) the name of the country of manufacture; (ii) the name of the manufacturer or purchaser; (iii) in words, the number of jewels, if any, serving a mechanical purpose as frictional bearings.
(c) Watch cases shall be marked on the inside or outside of the back to show: (i) the name of the country of manufacture; and (ii) the name of the manufacturer or purchaser.
The imported watch cases are required to be marked in accordance with the special marking requirements of Additional U.S. Note 4 (c) of chapter 91, HTSUS, on the inside or outside of the back to show the name of the country of manufacture, and the name of the manufacturer or purchaser. The country of manufacture in these requirements refers to where the cases are manufactured, not where the watch is made. The special marking must be accomplished by one of the methods specified in the note.
You have also requested a tariff classification ruling on the parts of the watch movements and on the parts of the watches. Regarding the watch parts, you indicate that watch cases, dials, hands and stems will be imported. Also, it is likely that metal watch bracelets will be imported.
The applicable subheading for watch cases of precious metal or metal clad with precious metal will be 9111.10.00, Harmonized Tariff Schedule of the United States (HTSUS), which provides for watches cases and parts thereof: cases of precious metal or of metal clad with precious metal. The rate of duty will be 12 cents each plus 4.8 percent ad valorem.
The applicable subheading for watch cases of base metal which are gold- or silver-plated will be 9111.20.20, Harmonized Tariff Schedule of the United States (HTSUS), which provides for watch cases and parts thereof: cases of base metal, whether or not gold- or silver-plated: gold- or silver-plated. The rate of duty will be 7 cents each plus 5.4 percent ad valorem.
The applicable subheading for watch cases of base metal which are not gold- or silver-plated will be 9111.20.40, Harmonized Tariff Schedule of the United States (HTSUS), which provides for watch cases and parts thereof: cases of base metal, whether or not gold- or silver-plated: other. The rate of duty will be 3.6 cents each plus 7.6 percent ad valorem.
The applicable subheading for other cases will be 9111.80.00, Harmonized Tariff Schedule of the United States (HTSUS), which provides for watch cases and parts thereof: other cases. The rate of duty will be 3.6 cents each plus 7.6 percent ad valorem.
The applicable subheading for the base metal watch bracelets valued not over $5 per dozen will be 9113.20.20, Harmonized Tariff Schedule of the United States (HTSUS), which provides for watch straps, watch bands and watch bracelets, and parts thereof: of base metal, whether or not gold- or silver-plated: straps, bands and bracelets: valued not over $5 per dozen. The rate of duty will be 11.2 percent ad valorem.
The applicable subheading for the base metal watch bracelets valued over $5 per dozen will be 9113.20.40, Harmonized Tariff Schedule of the United States (HTSUS), which provides for watch straps, watch bands and watch bracelets, and parts thereof: of base metal, whether or not gold- or silver-plated: straps, bands and bracelets: valued over $5 per dozen. The rate of duty will be 11.2 percent ad valorem.
The applicable subheading for dials which do not exceed 50 mm in width will be 9114.30.40, Harmonized Tariff Schedule of the United States (HTSUS), which provides for dials: not exceeding 50 mm in width. The rate of duty will be 0.4 cents each plus 7.2 percent ad valorem.
The applicable subheading for dials which exceed 50 mm in width will be 9114.30.80, Harmonized Tariff Schedule of the United States (HTSUS), which provides for dials: exceeding 50 mm in width. The rate of duty will be 4.4 percent ad valorem.
The applicable subheading for the watch hands and stems will be 9114.90.40, Harmonized Tariff Schedule of the United States (HTSUS), which provides for other clock or watch parts: other: for watches. The rate of duty will be 8.8 percent ad valorem
Regarding the classification of the parts of the watch movements, specific information on the parts of the watch movements which will be imported was not provided with your request. In order to classify the parts of the watch movements, a complete description of the parts in their condition as imported, including identification of the movement parts by item numbers and by description, will be required. Also, indicate if any incomplete watch movements or rough watch movements will be imported. Will any assemblies or subassemblies for watch movements, consisting of two or more pieces or parts fastened or joined inseparably together, be imported?
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 http://www.usitc.gov/tata/hts/.
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 Barbara Kiefer at (646) 733-3019.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division