CLA-2-71:OT:RR:NC:N4:433
Marie Ambeck-Madsen
KKArt / Kyoto Tango
Kongensgade 60
Odense, 5100
Denmark
RE: The tariff classification; country of origin/marking; and applicability of trade programs for bracelets assembled in Denmark.
Dear Ms. Ambeck-Madsen:
In your letter dated November 2, 2017, on behalf Kyoto Tango, you requested a binding ruling for classification, country of origin/marking and the applicability of trade programs. Illustrative literature and description were received.
Internet research indicates that the submitted bracelets are marketed and sold as the “Kyoto Tango” bracelets. Each bracelet is made with six acrylic tubular beads in various color combinations strung on an elastic chord. The bracelets are available with only six acrylic beads, or with one, two or three of the six acrylic beads plated in gold, silver or copper. The “Kyoto Tango” bracelets are individually packed in cardboard boxes ready for retail sale. Cost and weight breakdowns were not provided.
Classification under the Harmonized Tariff Schedule of the United States (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.
Legal Note 2 (a) to Chapter 71 of the HTSUS provides headings 7113, 7114, 7115 do not cover articles in which precious metal or metal clad with precious metal is present as minor constituents only, such as minor fittings or minor ornamentation (for example, monograms, ferrules and rims), and paragraph (b) of the foregoing note does not apply to the merchandise concerned.
Legal Note 11 to Chapter 71 of the HTSUS provides that for the purposes of heading 7117, the expression “imitation jewelry” means articles of jewelry within the meaning of paragraph (a) of note 9 above (but not including buttons or other articles of heading 9606, or dress combs, hair slides or the like, or hairpins, of heading 9615), not incorporating natural or cultured pearls, precious or semiprecious stones (natural, synthetic or reconstructed) nor (except as plating or as minor constituents) precious metal or metal clad with precious metal. See Legal Note 9 (a) to Chapter 71, HTSUS, for a complete listing of exemplars concerning the expression “articles of jewelry” as it relates to the expression “imitation jewelry” – rings, bracelets, necklaces and earrings are a partial listing of those exemplars covered under imitation jewelry.
You requested 7115.90.30, 7115.90.40 and 7115.90.60, HTSUS, for the “Kyoto Tango” bracelets strung with acrylic beads plated with gold, silver or copper. Plating is a manufacturing process in which a thin layer of metal coats a substrate by means of electroplating, or chemical solutions, such as immersion plating or autocatalytic chemical plating. The plating, even of precious metal over acrylic beads, does not confer onto the bracelets the term of being of “precious metal” – see Legal Notes: 4 (a); 5 (a), (b) and (c); and 11 to Chapter 71 of the HTSUS. Accordingly, the acrylic beads made into bracelets are considered imitation jewelry classifiable in heading 7117, HTSUS.
The applicable subheading for “Kyoto Tango” bracelets will be 7117.90.7500, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Imitation jewelry: Other: Other: Valued over 20 cents per dozen pieces or parts: Other: Of plastics.” The rate of duty will be free.
You presented a set of circumstances wherein the acrylic beads are manufactured in China and the elastic chord is manufactured in France. The beads and elastic chords are exported to Denmark where the gold, silver and copper plating takes place, along with the assembly of the bracelets.
Section 304 of the Tariff Act of 1930 (19 U.S.C. §1304), provides that unless excepted, every article of foreign origin 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.
Congressional intent in enacting 19 U.S.C. §1304 was “that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” See United States v. Friedlaender & Co., 27 CCPA 297 at 302; C.A.D. 104 (1940).
Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements of 19 U.S.C. §1304. Pursuant to 19 CFR 134.1(b), “country of origin” means 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. A substantial transformation results when a new and different article emerges from the processing having a distinctive name, character or use. Alternatively within the same context, a substantial transformation of an article occurs when it is used in manufacture, which results in an article having a name, character, or use differing from that of the article before its processing. See United States v. Gibson-Thomsen Co., Inc., 27 CCPA 269 (1940).
In determining whether the combining of parts or materials constitutes a substantial transformation, the issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 573 F. Supp. 1149 (CIT 1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations which are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. See C.S.D. 85-25, and Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983).
Regarding whether the gold, silver and copper plating of the acrylic beads in Denmark, along with the final assembly of the beads into bracelets in Denmark, constitutes a substantial transformation of the beads into a new and different article of commerce, it is our position that the plating of Chinese origin acrylic beads for decorative purposes is of minor processing and the assembly of the beads into bracelets is of simple combining steps, resulting in the bracelets [not] substantially transforming into new and different articles of commerce with country of origin Denmark. Simple combining, even coupled with the plating of one, two or three acrylic beads, does not substantially transform the beads of Chinese origin. Consequently, the country of origin for the “Kyoto Tango” bracelets is China.
Additionally, you requested if any Free Trade Agreements are applicable for the “Kyoto Tango” bracelets. There are no Free Trade Agreements with China and the United States.
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 https://hts.usitc.gov/current.
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 Neil H. Levy at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division