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HQ H007655




September 28, 2007

CLA-2 OT: RR: CTF: TCM H007655 ADK

CATEGORY: CLASSIFICATION

TARIFF NO.: 7116.20.0500

Althea Nicholas-Wood
Liz Claiborne Inc.
1 Claiborne Ave.
North Bergen, NJ 07047

RE: Classification of jewelry; Reconsideration of New York Ruling Letters (NY) N003697 and NY N003975

Dear Ms. Nicholas-Wood:

This letter is in response to your request of January 31, 2007, for reconsideration of NY N003697, dated December 4, 2006, and NY N003975, dated December 18, 2006. In those rulings, United States Customs and Border Protection (CBP) determined that the subject articles were classifiable under subheading 7117.19.9000, Harmonized Tariff Schedule United States Annotated (HTSUSA). We have reviewed NY N003697 and NY N003975 and found them to be in error.

Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. §1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed revocation was published on July 25, 2007, in the Customs Bulletin, Volume 41, No. 31. No comments were received in response to this notice.

FACTS:

In N003697, three necklaces were under consideration. The first, Style ULRU0090 was made of a leaf-shaped pendant of base metal and chain with one tiger’s eye stone

Tiger’s Eye is a variety of semiprecious quartz. See Encyclopedia Britannica online at www.britannica.com. The second, Style UKRU0091 was made of a base metal circular pendant with wood, plastic and intermittent gold tone plastic beads with one tiger’s eye stone, strung on textile thread. The third, Style UKRU0129 was made of a base metal circular pendant and beads strung on a leather cord with one tiger’s eye bead. According to the importer, Liz Claiborne, Inc. (Liz Claiborne), the subject necklaces were all valued at less than $40 each.

In NY N003975, two items were under consideration. The first, style A9-1109-CD-8, was a bracelet with a base metal chain, large glass stones, mini gold tone plastic beads and one cubic zirconium A semi-precious “synthetic gemstone of zirconia resembling a diamond.” See Merriam Webster Dictionary, www.m-w.com. See Explanatory Notes to heading 7104, HTSUS. stone on the tail chain. The second, style A9-1109-CD-5, was a necklace with a base metal chain and pendant, one glass pendant and one cubic zirconium stone on the tail chain. According to Liz Claiborne, the subject necklace and bracelet were valued at less than $40 each.

In both rulings, the imports were classified under subheading 7117.19.9000, HTSUSA, which provides for “[I]mitation Jewelry: Of base metal, whether or not plated with precious metal: Other: Other: Other.” Liz Claiborne asserts that the jewelry is properly classifiable under subheading 7116.20.15.00, HTSUSA, which provides for: “articles of natural or cultured pearls, precious or semi-precious stones (natural, synthetic or reconstructed): Of precious or semiprecious stones (natural, synthetic or reconstructed): Articles of jewelry: Other.”

ISSUE:

What is the proper classification, under the HTSUS, for the jewelry containing semi-precious stones?

LAW AND ANALYSIS:

Classification under the HTSUSA is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined 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, the remaining GRIs 2 through 6 may then be applied in order.

There is no dispute that the subject imports are classifiable in chapter 71. At issue is whether the various items are classifiable as imitation jewelry or as articles of semi-precious stones. The HTSUS provisions under consideration are as follows:

7116 Articles of natural or cultured pearls, precious or semi-precious stones (natural, synthetic or reconstructed):

7116.20 Of precious or semiprecious stones (natural, synthetic or reconstructed):

Articles of jewelry:
7116.20.0500 Valued not over $40 per piece

7116.20.1500 Other

7117 Imitation jewelry:
Of base metal, whether or not plated with previous metal:

7117.19 Other:

Other:

7117.19.9000 Other.

In addition to the terms of the headings, classification of goods under the HTSUS is governed by any applicable section or chapter notes. Chapter 71, Note 9 provides, in pertinent part:

For the purposes of heading 7113, the expression “articles of jewelry” means:

(a) Any small objects of personal adornment (for example, rings, bracelets, necklaces, brooches, earrings, watch chains, fobs, pendants, tie pins, cuff links, dress studs, religious or other medals and insignia):

Chapter 71, Note 11 provides, in pertinent part:

For the purposes of heading 7117, the expression ”imitation jewelry” means articles of jewelry within the meaning of paragraph (a) of note 9 abovenot incorporating natural or cultured pearls, precious or semiprecious stones (natural, synthetic or reconstructed).

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80. The ENs under consideration are as follows:

The EN to heading 7116, HTSUS (EN 7116), provides, in pertinent part:

The heading covers all articleswholly of natural or cultured pearls, precious or semi-precious stones, or consisting partly of natural or cultured pearls or precious or semi-precious stones, but not containing precious metals or metals clad with precious metal

It thus includes:

(A) Articles of personal adornment and other decorated articlescontaining natural or cultured pearls, precious or semi-precious stones, set or mounted on base metal (whether or not plated with precious metal), ivory, wood, plastics etc.

(Emphasis in original)

The EN to heading 7117, HTSUS (EN 7117), provides, in pertinent part:

For the purposes of this heading, the expression imitation jewellery[does] not incorporate precious metal or metal clad
with precious metalnor natural or cultured pearls, precious or semi-precious stones (natural, synthetic or reconstructed). (Emphasis in original)

In both In NY N003697 and NY N003975, the items under consideration were composite goods, consisting of at least two different materials. According to GRI 3 (b), most composite goods are to be classified “as if they consisted of the material or component which gives them their essential character.” The term ‘essential character,’ refers to “the attribute which strongly marks or serves to distinguish what an article is; that which is indispensable to the structure, core or condition of the article.” HQ 956538, Dated November 29, 1994; See also Better Home Plastics Corp. v. United States, 20 CIT. 221; 916 F. Supp. 1265 (1996). “When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.” GRI 3(c).

In NY N003697, CBP determined that the essential character of the three necklaces was the base metal. Pursuant to GRI 3(b), the necklaces were classified under heading 7117, HTSUS as “articles of imitation jewelry: of base metal.” In NY N003975, CBP determined that none of the component parts for either article imparted the essential character. Pursuant to GRI 3(c), the pieces were classified under heading 7117, HTSUS which was the heading which occurred last in numerical order.

We now find that the application of GRI 3 in both cases was in error. While the vast majority of composite goods are classified according to GRI 3, its application here is unnecessary. The relevant heading terms and corresponding ENs are broad enough to encompass this merchandise by application of GRI 1.

The subject articles were originally classified in heading 7117, HTSUS, as “imitation jewelry.” According to chapter 71 legal note 11, articles containing precious or semi-precious stones are not considered “imitation jewelry.” See also EN 71.17. All of the items under consideration contain semi-precious stones. The three necklaces of NY N003697, all feature tiger’s eyes, and the necklace and bracelet of NY N003975, each feature a cubic zirconia. By application of legal note 11 to chapter 71, the subject imports are excluded from heading 7117, HTSUS.

We next consider heading 7116, HTSUS. According to the EN, heading 7116, HTSUS, covers articles of personal adornment articles containing semi-precious stones, set or mounted on base metal. The subject imports satisfy this definition. Each is an article of personal adornment that contains a semi-precious stone. Furthermore, these stones are mounted on base metal chains. Accordingly, the articles are classifiable under heading 7116, HTSUS. Specifically, they are classifiable under subheading 7116.20 as “Articles ofsemi-precious stones:Of precious or semiprecious stones”

The importer, Liz Claiborne, asserts that the items are classifiable as “articles of jewelry” under subheading 7116.20.15, HTSUS. The legal notes to chapter 71 offer guidance as to the definition of the term “jewelry.” According to note 9(a) Although this note refers specifically to headings 7113 and 7117, HTSUS, it provides guidance in the present matter because it offers an official HTSUS interpretation of the term “articles of jewelry.” See HQ 958831, dated April 1, 1997., articles of jewelry include “any small objects of personal adornment (for examplebracelets, necklaces.” Under consideration are four necklaces of semi-precious stones and one bracelet of semi-precious stones. The subject articles therefore satisfy this definition eo nomine. While we concur with Liz Claiborne’s determination at the 6-digit level, we disagree at the 8-digit level. Because each of the items is valued at less than $40, the more specific subheading is 7116.20.0500, HTSUSA, which provides for “Articles of jewelry: Valued not over $40 per piece.” They are not classifiable under subheading 7116.20.1500, HTSUSA, which provides more generally for “Articles of jewelry: Other.”

HOLDING:

By application of GRI 1, the subject articles of jewelry are classifiable under heading 7116, HTSUS. Specifically, they are classifiable under subheading 7116.20.0500, HTSUSA, which provides for: “Articles of natural or cultured pearls, precious or semi-precious stones (natural, synthetic or reconstructed): Of precious or semiprecious stones (natural, synthetic or (reconstructed): Articles of jewelry: Valued not over $40 per piece.” The 2007 column one rate, general rate of duty is 3.3 percent ad valorem.

EFFECT ON OTHER RULINGS:

NY N003697, dated December 4, 2006, and NY N003975, dated December 18, 2006 are hereby revoked. In accordance with 19 USC §1625(c), this ruling will become effective 60 days after publication in the Customs Bulletin.

Sincerely,

Myles B. Harmon, Director
Commercial and Trade Facilitation Division

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