CLA-2-71:OT:RR:NC:N4:433
Jennifer R. Diaz, Esq.
Diaz Trade Law
12700 Biscayne Blvd., 301
North Miami, FL 33181
RE: The tariff classification and status under the United States-Korea Free Trade Agreement (UKFTA) of gold and silver coins from Korea.
Dear Ms. Diaz:
In your letter dated September 19, 2018, on behalf of Gainesville Coins LLC., you requested a ruling on the classification and status of gold and silver coins from Korea under the UKFTA. Illustrative literature and digital photographs of the gold and silver coins were submitted.
The “South Korean Tiger Bullion Coins” issued in 2016, 2017, and 2018 are the first group of items under consideration. The coins are 99.9% gold, uncirculated, and come in one-quarter (1/4) troy ounce, one-half (1/2) troy ounce, and one (1) troy ounce weights.
The 2016 coins obverse (face) feature a forward-facing Korean tiger, the words “Korean Tiger” and a ring of tiger stripes surrounding the tiger. The reverse of the coin depicts an artistic representation of the Korean peninsula in Hangul (the Korean alphabet), the weight, the year, the composition and a latent security feature.
The 2017 coins obverse (face) features a Korean tiger, the year, and the weight. The reverse of the coin depicts an artistic representation of the Korean peninsula in Hangul (the Korean alphabet), the composition, a ring of tiger stripes surrounding the peninsula, and a latent security feature.
The 2018 coins obverse (face) features a Korean tiger next to bamboo bushes, the date, weight and the words “Korean Tiger.” The reverse of the coins depicts an artistic representation of the Korean peninsula in Hangul (the Korean alphabet), the composition, a ring of tiger stripes surrounding the peninsula, and a latent security feature. You state “2018 is the inaugural release of the South Korean Tiger Bullion Coins in a silver series as well as its gold series.”
The “South Korean Chiwoo Cheonwang Bullion Coins” issued in 2016, 2017, and 2018 are the second group of items under consideration. The coins come in (1) troy ounce weight of 99.9% pure silver and are uncirculated. The coins also come in one-tenth (1/10) and one (1) troy ounce weight of 99.9% pure gold and are also uncirculated.
The 2016 coins obverse (face) feature the shield of Chiwoo Cheonwang above a latent security feature, the Korean Minting and Security Printing Corporation (hereinafter “KOMSCO”) logo, date, fineness, denomination, and Republic of Korea. The reverse of the coin depicts an artistic representation of Chiwoo Cheonwang in military dress with spear and shield.
The 2017 coins obverse (face) feature the shield of Chiwoo Cheonwang above a latent security feature, the KOMSCO logo, date, fineness, denomination, and Republic of Korea. The reverse of the coin depicts an artistic representation of Chiwoo Cheonwang in military dress with spear and shield on horseback.
The 2018 coins obverse (face) feature the shield of Chiwoo Cheonwang above a latent security feature, the KOMSCO logo, date, fineness, denomination, and Republic of Korea. The reverse of the coin depicts an artistic representation of Chiwoo Cheonwang in military dress wielding a sword in battle.
In consideration of the illustrative literature and digital photographs submitted, you are inclined to classify the gold and silver coins respectively in subheadings 7118.90.0019 and 7118.90.0055.
Coins are provided for, eo nomine, in heading 7118, Harmonized Tariff Schedule of the United States (HTSUS). As described by the Explanatory Notes (ENs) to heading 7118, the scope of the heading includes coins issued by government control that are legal tender. As such, the subject merchandise’s classification also hinges on whether the coins meet the definition of “legal tender.” The phrase “legal tender” is not defined in either the tariff schedule or the ENs, and as such CBP is permitted to draw on dictionaries and other lexicographic materials. See, e.g., Lonza v. United States, 46 F.3d. 1098; 1995 U.S. App. LEXIS 1821; 16 Int’l Trade Rep (BNA) 2551.
The Oxford English Dictionary defines “legal tender” as “coin or other money, which a creditor is bound by law to accept, when tendered in payment of a debt.” According to Webster’s College Dictionary, “legal tender” is “money that may be legally offered in payment of an obligation and that a creditor must accept.” According to a numismatic dictionary, non-circulating legal tender is “a coin struck by the national issuing authority mainly to be sold to collectors. The coins also have a face value and can be spent in the country of issue.” See http://www.predecimal.com/dictionary. htm. In this case, the South Korean Tiger Bullion Coins and the South Korean Chiwoo Cheonwang Bullion Coins are issued by the recognized government mint of South Korea, are released through a recognized monetary authority (Korean Minting and Security Printing Corporation), and although not in active circulation like nominal value coins and bills, can be used upon conversion in settlement of debt and purchases. Consequently, the South Korean Tiger Bullion Coins and the South Korean Chiwoo Cheonwang Bullion Coins are classifiable in heading 7118, HTSUS.
The applicable subheading for the “Gold” South Korean Tiger Bullion Coins and South Korean Chiwoo Cheonwang Bullion Coins will be 7118.90.0019, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Coin: Other: Gold: Other.” The rate of duty will be free. Furthermore, the applicable subheading for the “Silver” South Korean Tiger Bullion Coins and South Korean Chiwoo Cheonwang Bullion Coins will be 7118.90.0055, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Coin: Other: Other.” The rate of duty will be 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 World Wide Web at https://hts.usitc.gov/current.
GN 33 (b), HTSUS, sets forth the criteria for determining whether a good is originating under the UKFTA. GN 33 (b), HTSUS, (19 U.S.C. § 1202) states:
For the purposes of this note, subject to the provisions of subdivisions (c), (d), (n) and (o) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good of a UKFTA country under the terms of this note if–
(i) the good is wholly obtained or produced entirely in the territory of Korea or of the United States, or both;
(ii) the good is produced entirely in the territory of Korea or of the United States, or both, and- -
(A) each of the nonoriginating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (o) of this note; or
(B) the good otherwise satisfies any applicable regional value-content or other requirements set forth in such subdivision (o); and
satisfies all other applicable requirements of this note and of applicable regulations; or
(iii) the good is produced entirely in the territory of Korea or of the United States, or both, exclusively from materials described in subdivision (i) or (ii), above.
For the purpose of this note, the term “UKFTA country” refers only to Korea or to the United States.
In your submission you state “the coins were entirely manufactured in South Korea by the Korean Minting and Security Printing Corporation, the official South Korean Mint.” Your further state “The subject merchandise are gold and silver bullion coins issued by the official Korean Mint, KOMSCO.” Next, the coins are imported into the United States by Gainesville Coins LLC. to be then sold to purchasers. Last, via email, an Assistant Manager from KOMSCO confirmed the raw materials were procured and the coins manufactured in South Korea.
A general manufacturing process is as follows: (1) gold and silver ore are extracted from the earth by mining resulting in rocks that are then crushed into grains the size of sand; (2) chemical solutions are added so that the gold and silver ore react resulting in solids that are then collected and heated in a smelter whereby the heavier minerals (gold and silver) settle at the bottom; (3) the molten gold and silver are then poured into molds and allowed to cool resulting in (gold and silver) ingots that is also known as dore; (4) the dore is refined into high purity by a bullion manufacturer using pyro-metallurgical chlorination ( known as “The Miller Process”), electrolysis (known as “The Wohlwill Process”), or some other method of purification; (5) after purification the metals are heated in a furnace, coiled, and cut into blanks; (6) a numismatic artist creates a coin design using plaster models to produce a die which is then cut by an engraving machine; (7) gold and silver blanks are inserted into a stamping machine resulting in finished coins; (8) a final step of the manufacturing process is inspection and quality control.
Based on the information provided, the gold and silver coins qualify for the UKFTA preferential treatment, because they meet the requirements of the HTSUS, General Note 33(b)(i). The merchandise will therefore be entitled to a free rate of duty under the UKFTA upon compliance with all applicable laws, regulations and agreements.
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 Dharmendra Lilia at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division