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HQ 964709




February 8, 2001

CLA-2 RR:CR:GC 964709 nel

CATEGORY: CLASSIFICATION

TARIFF NO.: 7116.10.2500

Area Port Director
U. S. Customs
605 W. 4th Avenue
Anchorage, AK 99501

RE: Protest 3195-00-100090; cultured pearls

Dear Port Director:

This is our decision on Protest 3195-00-100090, timely filed by counsel, on behalf of Fritz Companies, Inc., on June 21, 2000, against your classification decision regarding merchandise described as cultured pearls, under the Harmonized Tariff Schedule of the United States (HTSUS). The entry dated May 12, 1999, was liquidated March 24, 2000.

FACTS:

The merchandise is described as unstrung, unadorned cultured pearls, imported without clasps, settings, mountings, or other metal material accompanying the shipment. These pearls were temporarily strung on wire for transport to the United States, and, according to the protestant, need to be restrung, individually knotted, and fitted with a clasp before being sold to consumers.

Examination of the pearls at issue revealed that the pearls were strung in a design pattern, described as a large round pearl at the center, which is flanked by smaller, slightly teardrop shaped pearls that taper off in size to the end of the incomplete necklace. In addition to the graduated size of the pearls, each individual pearl is strung in a specific direction with the teardrop pointing outward from the central large pearl.

Protestant entered the merchandise as “temporarily strung” cultured pearls under subheading 7101.22.3000, HTSUS, which provides for: Pearls, natural or cultured, whether or not worked or graded but not strung, mounted or set; pearls, natural or cultured, temporarily strung for convenience of transport: Cultured pearls: Worked: Graded and temporarily strung for convenience of transport.

Customs classified the merchandise, at liquidation, as an article of strung pearls with a design pattern under subheading 7116.10.2500, HTSUS, which provides for: Articles of natural or cultured pearls, precious or semiprecious stones (natural, synthetic or reconstructed): Of natural or cultured pearls: Cultured.

ISSUE:

What is the tariff classification of a set of cultured pearls, temporarily strung with a design pattern, under the HTSUS.

LAW & ANALYSIS:

The General Rules of Interpretation (GRIs) taken in their appropriate order provide a framework for classification of merchandise under the HTSUS. The majority of imported goods are classified by application of GRI 1; that is, according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, then the remaining GRIs may be applied.

GRI 2(a) provides, in part, that any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article.

The Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System constitute the official interpretation of the Harmonized System at the international level. Though not dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS. Customs believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127-28 (Aug. 23, 1989).

The following headings are relevant to the classification of the temporarily strung cultured pearl merchandise under protest:

7101, HTSUS, which provides for: Pearls, natural or cultured, whether or not worked or graded but not strung, mounted or set; pearls, natural or cultured, temporarily strung for convenience of transport.

7116, HTSUS, which provides for: Articles of natural or cultured pearls, precious or semiprecious stones (natural, synthetic or reconstructed).

Heading 7101, HTSUS, covers cultured pearls whether unworked, i.e., as gathered and merely cleansed (for example, by means of salt and water), or worked, i.e. ground to remove defective parts, drilled or sawn (e.g., half or three-quarter pearls). The pearls of this heading may be temporarily strung for convenience of transport. See EN 71.01.

Heading 7116, HTSUS, covers all articles (with some exceptions that are not relevant here) wholly of natural or cultured pearls, but not containing precious metals or metals clad with precious metals. This heading also includes pearls or stones graded according to size, quality, shade, etc., and constituting an article ready for use as jewelry. But this heading excludes ungraded or graded pearls strung temporarily for facility of transport without any setting or fitting of metal or other material; these fall in heading 7101, HTSUS. See EN 71.16.

Based upon examination of the merchandise, the cultured pearls have been strung in a specifically designed pattern, not merely for convenient transport. Therefore, they are excluded from heading 7101, HTSUS.

While the temporarily strung cultured pearls do not constitute a completed article ready for use as jewelry, they are graded, arranged in a design pattern, and strung not merely to facilitate their transport. They appear to be an incomplete or unfinished pearl necklace. According to GRI 2(a), an incomplete or unfinished article, which has, as presented, the essential character of the complete or finished article, is classified under the same HTSUS heading as the completed article. See EN (I) to GRI 2(a). These temporarily strung cultured pearls are in a specific design that requires only the replacement of the string and the addition of a clasp to have a completed necklace. Having the essential character of a necklace, they are articles of cultured pearls that are excluded from heading 7101, HTSUS, and provided for under heading 7116, HTSUS, by GRI 2(a).

The cultured pearls, temporarily strung with a design pattern, are classified under subheading 7116.10.2500, HTSUS, which provides for: Articles of natural or cultured pearls, precious or semiprecious stones (natural, synthetic or reconstructed): Of natural or cultured pearls: Cultured.

HOLDING:

Protest 3195-00-100090 should be DENIED.

In accordance with Section 3(A)(11)(b) of Customs Directive 099-3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, Notice of Action, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.

Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page of the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,


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