CLA-2-71:OT:RR:NC:N4:433
Amy Hess
Corporate Legal Consultant
World Exchange, Inc.
11205 S. La Cienega Boulevard
Los Angeles, CA 90045
RE: The tariff classification of an earring stud, North American Free Trade Agreement (NAFTA) eligibility, and country of origin.
Dear Ms. Hess:
In your letter dated April 3, 2015, on behalf of Ronald Pratt Company (RPC), you requested a ruling for the tariff classification of an earring stud, the NAFTA eligibility for the earring stud and the country of origin for the earring stud.
Item number B24L100Y-316 is identified as the “Stainless Steel with 24K Gold Plating Tiffany 4 mm Setting.” Each earring stud has a singular, faceted CZ (Cubic Zirconia) stone crimped within a 24K gold plated stainless steel setting. This ruling will apply to all B24L100Y-316, earring studs assembled by identical means.
RPC manufactures 24K stainless steel ear studs with empty settings in the United States and purchases cut, 4 millimeter, faceted CZ stones from a United States supplier, who imports the gemstones duty-paid from China. Each setting is designed to hold one, 4 mm CZ. The CZ is attached to the stud using a manually operated crimping machine. RPC intends to ship the stainless steel 24K gold plated settings and the CZ stones to Mexico, where the stones will be crimped into the setting using the crimping machine. Upon assembly, the earring studs will be shipped back into the United States by RPC.
In regard to the stud earring with CZ stone, Legal Note 11 to Chapter 71 of the Harmonized Tariff Schedule of the United States (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), HTSUS, for exemplars of articles of jewelry. With case in point, a CZ is a synthetic (simulated) diamond and is categorized under precious gemstones. Accordingly, this item is classifiable, not as imitation jewelry of heading 7117, HTSUS, but rather as precious (synthetic) jewelry in subheading 7116.20, HTSUS.
The applicable subheading for the B24L100Y-316, stud earring(s) with each earring having a singular, faceted CZ stone, will be 7116.20.0580, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Articles of natural or cultured pearls, precious or semi-precious stones (natural, synthetic or reconstructed): Of precious or semiprecious stones (natural, synthetic or reconstructed): Articles of jewelry: Valued not over $40 per piece: Other.” The rate of duty will be 3.3% ad valorem or free under NAFTA.
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/.
To be eligible for tariff preferences under NAFTA, goods, must be “originating goods” within the rules of origin in General Note 12 (b), HTSUS. In this particular case, to be an originating good the stud earring(s) with each earring having a singular, faceted CZ stone must be transformed in the territory of Mexico pursuant to General Note 12 (b) (ii), (A), which states: (A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein. General Note 12 (t), Chapter 71, Note 2 to the HTSUS, is applicable. The rule states at Note 2: A change to headings 7113 through 7118 from any heading outside that group. We note that the CZ stones of Chinese origin are classified in heading 7104, HTSUS, and as such are classified outside of headings 7113 through 7118, resulting in the earring stud(s) being NAFTA originating.
Part 134, Customs Federal Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. In Section 134.1 (b), the country of origin of an article is defined as 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 for country of origin marking purposes. 19 CFR 134.1 (b) is not applicable for NAFTA goods, as country of origin will be determined in accordance with 19 CFR 102 – Rules of Origin.
19 CFR, Subpart B – Rules of Origin, § 102.11, General rules, (3) states: “Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in § 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied. Subpart A, General, – § 102.1 (e) defines the meaning of “foreign material” to be a material whose country of origin as determined under these rules is not the same country as the country in which the good was produced. As such, the 24K stainless steel ear studs with empty settings manufactured in the United States and classified in heading 7117 and the CZ stones of Chinese origin classified in heading 7104 are both considered foreign materials.
19 CFR, Section 102.20, “specific rule by tariff classification,” states: for 7116 – A change to heading 7116 from any other heading, except that pearls strung but without the addition of clasps or other ornamental features of precious metals or stones, shall have the origin of the pearls. A review of the criteria of § 102.17 “Non-qualifying operations” does not appear to be applicable to the merchandise concerned. Due to the fact that the 24K stainless steel ear studs with empty settings are classified in heading 7117 and the CZ stones of Chinese origin are classified in a heading 7104, both being of foreign materials and classified outside of heading 7116, the stud earring(s) with each earring having a singular, faceted CZ stone, meet the specific rule by tariff classification as provided. Accordingly, the earring stud(s) are country of origin Mexico.
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 E-mail address: [email protected].
Sincerely,
Gwenn Klein Kirschner
Director
National Commodity Specialist Division