Classification, Instruments of International Traffic are Topics of Proposed CBP Ruling Changes
© , Sandler, Travis & Rosenberg, P.A. Originally published in the [05/03/2019] issue of the Sandler, Travis & Rosenberg Trade Report. Reprinted by permission.
The following proposed revocations or modifications of U.S. Customs and Border Protection rulings are included in the May 1, 2019, Customs Bulletin and Decisions. Comments are due no later than May 31.
19 USC 1322 and 19 CFR 10.41a allow instruments of international traffic to be released without entry or the payment of duty. CBP states that it has traditionally held that to qualify as an IIT an article must be used as a container or holder in international traffic, substantial, suitable for and capable of repeated use, and used in significant numbers in international traffic.
In ruling HQ H058876 CBP designated certain plastic garment hangers as IIT after concluding that they meet these criteria. Apparel items made overseas are placed on these hangers for transportation to the U.S. After the apparel items are purchased the hangers are returned to the company that owns them, which sorts and inspects them and then ships those that are not damaged to foreign manufacturing locations for reuse.
CBP is now proposing to reverse its previous designation and revoke the ruling. CBP explains that to be used as a holder pursuant to the IIT criteria, the plain meaning of the term “hanger” and prior precedent indicate that a garment hanger must physically suspend the underlying garment during transportation. In this case, however, the garments are hung on the hangers but then folded into cardboard boxes for shipment, meaning the garments are not suspended from the hangers during transport.
CBP is proposing to reclassify women’s footwear fashion boots with a fold-down fleece-like lining under HTSUS 6402.91.70 (90 cents + 37.5 percent duty) rather than under HTSUS 6402.91.4050 (6 percent duty). Ruling NY N196436 would be revoked to reflect this change.
The boots at issue have an inner shaft lined with a fleece-like textile material and an outer sole made up of a rubber or plastic material. The decorative portion of the shaft was designed to be exposed when the shaft is cuffed. The boots feature metal snap buttons that connect the upper portion of the shaft to the mid-quarter of the boot. Once folded down the approximately three-inch exposed shaft is secured by the buttons.
In NY N196436 CBP reasoned that the upper portion of the boots was not designed to be cuffed and therefore concluded that the textile materials constituted less than ten percent of the external surface area of the upper. However, CBP now states that these boots meet three of the four factors it has previously set forth as indicating that a boot is intended to be cuffed.
CBP is proposing to reclassify a dietary supplement that provides weight management under HTSUS 2106.90.98 (6.4 percent duty) rather than under HTSUS 2101.20.90 (8.5 percent duty). Ruling NY N293615 would be modified to reflect this change.
This product contains approximately 59 percent green tea extract and 18 percent guarana. CBP explains that heading 2101 provides for preparations based on extracts of coffee, tea, or mate, with added starches or other carbohydrates, and presented in lump, granular, or powder form. While this supplement meets the first criterion it does not meet the second two.
CBP also states that heading 2106 provides for food supplements based on extracts from plants and containing mixtures of chemicals designed to improve some of the supplements’ characteristics. In this case the tea extract is a plant extract, guarana is a plant ingredient, and several other of the supplement’s ingredients are used to improve its characteristics.