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HQ 951197


June 24, 1992

CLA-2 CO:R:C:M 951197 NLP

CATEGORY: CLASSIFICATION

TARIFF NO.: 7103.10.20; 7103.99.50

District Director of Customs
P.O. Box 789
Great Falls, MT 59403

RE: Protest 3307-92-100001; unworked semi-precious stones; rhodolite; tanzanite; subheading 7103.10.40; Explanatory Notes 71.02 and 71.03; 19 CFR 10.172

Dear Sir:

The following is our decision regarding the Protest and Request for Further Review of Protest No. 3307-92-100001, dated January 6, 1992. At issue is the classification of semi-precious stones under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

Based on the information before us, it appears that two types of semi-precious stones are subject to protest. The first type consists of rhodolite and tanzanite stones. The stones in this group are identified by the letter "A" on the invoice from Tuckman mines, dated September 5, 1991. We will refer to these stones as group A. The second type involves only one semi- precious stone: a tanzanite stone that has a carat weight of 40.60 and a higher value than the other tanzanite stones. This stone is referred to as "D" on the invoice from Tuckman mines, dated September 5, 1991.

The rhodolite and tanzanite stones in group A were entered and liquidated under subheading 7103.10.40, HTSUS, as semi- precious stones that are simply sawn or roughly shaped. The tanzanite stone (D) was entered and liquidated under subheading 7103.99.50, HTSUS, which provides for other semi-precious stones that have been otherwise worked. Duty-free treatment for this stone under the Generalized System of Preferences (GSP) was denied.

It is the importer's argument that the rhodolite and tanzanite in group A are classified in subheading 7103.10.20, HTSUS, as unworked semi-precious stones. The tanzanite stone (D) should be entitled to entry free of duty pursuant to the GSP as it is a product of Tanzania.

ISSUE:

Are the rhodolite and tanzanite stones in group A classified in subheading 7103.10.20, HTSUS, as unworked semi-precious stones, or in subheading 7103.10.40, as simply sawn or roughly shaped semi-precious stones?

Is the tanzanite stone (D) entitled to duty-free treatment under the GSP?

LAW AND ANALYSIS:

The classification of merchandise under the HTSUS is governed by the General Rules of Interpretation (GRI's). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.

Heading 7103, HTSUS, provides for "Precious stones (other than diamonds) and semi-precious stones, whether or not worked or graded but not strung, mounted or set; ungraded precious stones (other than diamonds) and semi-precious stones, temporarily strung for convenience of transport." Explanatory Note (EN) 71.03 of the Harmonized Commodity Description and Coding System (HCDCS), page 953, states that "[t]he provisions of the second paragraph of the Explanatory Note to heading 71.02 apply, mutatis mutandis, to this heading." EN 71.02 states on page 952 that heading 7102, HTSUS, "covers unworked stones, and stones worked, e.g., by cleaving, sawing, bruting, faceting, grinding, polishing, drilling, engraving (including cameos, and intaglios), preparing as doublets, provided they are neither set or mounted."

Unworked semi-precious stones of subheading 7103.10.20, HTSUS, are stones that are unworked and are in the same condition as when they were mined from the earth. The "other" semi- precious stones of subheading 7103.10.40, HTSUS, are stones that have been "simply sawn or roughly shaped".

It is the importer's argument that the rhodolite and tanzanite are classified as unworked semi-precious stones in subheading 7103.10.20, HTSUS. The importer contends that the stones are imported into the United States in their natural state. They are in the exact condition as when they were taken out of the mine, they resemble gravel and they are not polished.

Moreover, the importer argues that the fact that the submitted Certificate of Origin, from the Arusha Chamber of Commerce and Agriculture, dated September 6, 1991, describes the goods as "Rough & polished gemstones" should not disqualify the stones from being classified as unworked semi-precious stones. The importer states that the term "rough" means that the gemstones are not worked and they are in the same condition as when they were removed from the mines. Tanzanite, in its natural condition, has a crystal form and, as a result, looks polished. The importer states that this may be one reason why the Certificate of Origin uses the word "polished" in relation to the stones.

Based on the information provided by the importer, it is our position that the rhodolite and tanzanite stones in group A are classified as unworked semi-precious stones in subheading 7103.10.20, HTSUS. The tanzanite stone (D) appears to have been correctly classified in subheading 7103.99.50, HTSUS. The substantial value of this stone, as stated on the invoice from Tuckman mines, and the fact that the weight of this stone is expressed in carats rather than in grams indicates to us that this stone has been otherwise worked beyond being simply sawn or roughly shaped.

Articles from Tanzania classified in subheading 7103.99.50, HTSUS, are entitled to entry free of duty under the GSP, provided the importer meets the requirements set forth in 19 CFR 10.172- 178. The decision to grant duty-free treatment rests soley with the district director upon his satisfaction that the requirements of 19 CFR 10.172-178 have been met. Therefore, if you are satisfied that the protestant has provided the necessary documentation in accordance with the pertinent regulations, the tanzanite stone should be afforded duty free treatment under the GSP.

HOLDING:

The protest should be approved concerning the semi-precious stones in group A. Concerning the tanzanite stone (D), if you are satisfied that the protestant has met the requirements set forth in 19 CFR 10.173 through 19 CFR 10.178, then you should approve that portion the protest. A copy of this decision should be attached to the Customs Form 19 and provided to the protestant as part of the notice of action on the protest.

Sincerely,

John Durant, Director
Commercial Rulings Division

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