CAFC Upholds Classification of Luxury Watches in Higher Duty Provision

The Court of Appeals for the Federal Circuit ruled July 30 that the Court of International Trade properly classified certain luxury watches.

According to the CAFC, the watches at issue are all made of 18-karat gold and have transparent crystal windows on the front and back. The front window allows the wearer to view the dials that display the time, while the back window (which makes up a significant part of the back of the watch) reveals the movement and protects the watch from damage.

HTSUS heading 9101 covers wrist watches with cases wholly of precious metal, while heading 9102 (which carries a higher duty rate) covers wrist watches other than those falling within heading 9101. The CAFC states that the core dispute in this case is whether the presence of a crystal window on the back of the watches results in the watch cases not being made wholly of precious metal.

The CAFC agreed with the CIT that the back crystals are part of the watch cases. As a result, the CAFC upheld the CIT’s determination that the watch cases include parts not made of precious metals and that the watches are therefore properly classified under HTSUS 9102.