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CBP Ruling Revocations and Modifications on Classification, Marking, Valuation

Wednesday, May 03, 2017
Sandler, Travis & Rosenberg Trade Report

The following proposed and final revocations and modifications of U.S. Customs and Border Protection rulings are included in the May 3, 2017, Customs Bulletin and Decisions. Comments on the proposed revocations and modifications are due no later than June 2 and the final revocations and modifications will be effective for goods entered or withdrawn from warehouse for consumption on or after July 3.

Flip Caps. CBP is proposing to reclassify aluminum ferrule/plastic button combinations used as closures for glass vials used as repositories for medicinal products as base metal parts of seals under HTSUS 8309.90.00 (2.6 percent duty) rather than as plastic caps under HTSUS 3923.50.00 (5.3 percent duty). CBP states that the components of this item are classifiable in different headings but neither can be said to impart the item’s essential character. Therefore, under GRI 3(c), the item is classified under the heading that occurs last in numerical order. Ruling NY N260351 would be modified to reflect this change.

Dried Algae Powder. CBP is proposing to reclassify dried algae powder as other dead single-cell microorganisms under HTSUS 2102.20.6000 (3.2 percent duty) rather than as other algae under HTSUS 1212.20.00 (duty-free). Ruling NY N128055 would be revoked to reflect this change.

Valuation. In ruling HQ H271308 CBP determined that certain commission payments made by the importer to purported agents should be included in the price actually paid or payable because the information presented did not indicate the parties were bona fide agents. In addition, CBP determined that payment for fabric development, inspection fees, and advance payments should be included in the price actually paid or payable. CBP states that this ruling (a) erred in stating that a purported agent instructed the importer’s customers when to make payment and (b) misconstrued an argument regarding the purported agent’s services as a buying agent for the importer and stated that in that situation the importer was the seller. CBP is now proposing to modify ruling HQ H271308 to correct these two misstatements.

Yard Waste/Recycling Bags. CBP is reclassifying reusable bags of woven polypropylene strips used for yard waste and recycling as bags of a kind used for packing under HTSUS 6305.32.0010 (8.5 percent duty) rather than as other made up articles under HTSUS 6307.90.9986 (7 percent duty). Ruling HQ H275824 will revoke ruling HQ 955639 to reflect this change.

Reusable Diaper Covers. CBP is reclassifying reusable diaper covers as babies’ garments and clothing accessories under HTSUS 6111.20.60 (8.1 percent duty) and 6111.30.50 (16 percent duty) rather than as diapers under HTSUS 9619.00.21 and 9619.00.05. CBP explains that these items are not diapers because they are not absorbent. Instead, they are composite goods whose essential character is determined by the outer shells rather than the liners. Ruling HQ H271286 will revoke rulings NY N266884 and NY N266899 to reflect this change.

Dental Instruments. In ruling NY A81309 CBP considered the country of origin marking of a dental instrument wherein the handle was imported from Pakistan and then assembled with a U.S.-made working end. CBP determined that the handle retained its own identity and that its country of origin for marking purposes was Pakistan. It is now CBP’s position that the handle is substantially transformed in the U.S. and is therefore excepted from marking; instead, the outermost container in which the handles ordinarily reach the ultimate purchaser must be marked. Ruling HQ H278602 will revoke ruling NY A81309 to reflect this change.

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