Ruling of the Week 8: Those Annoying Rubber Bracelet Things
In every profession, there are senior statesmen and women who have been around a long time and share their wisdom with the young whippersnappers. When I was a young whippersnapper customs lawyer, there were several at Barnes, Richardson & Colburn where I worked and continue to work. In particular, Bob Burke and Jim O'Kelly were and remain in that category. Outside of my firm, one of the guys who held that position was Bill Outman of Baker & McKenzie. Bill was recently the recipient of a CBP ruling that merits a brief discussion. Bill, this one is for you.
HQ H236523 (July, 2, 2014), is a request to Customs and Border Protection to reconsider the classification of various styles of silicone bands. These are similar to, but not in all cases the same as, those charity and awareness bracelets people wear. Some were sized to be worn as rings, rather than around the wrist. Importantly, some were not intended to be worn at all but were intended to be used as bindings for printed material or for sets of shirts and caps. Most were printed with some text or design.
The reason this ruling is interesting is that it follows directly from the GRK decision we recently discussed here. In that case, the U.S. Court of Appeals for the Federal Circuit reiterated an old notion that the use of a product can be used as evidence of proper classification in an eo nomine tariff provision. That notion is inconsistent with the conventional wisdom that the use of imported goods is only relevant when the tariff makes it relevant, which would be in a so-called "use provision." An eo nomine provision, on the other hand, describes the product by name, which is usually independent of use. Salt, for example, is salt whether used in cooking or on a frozen driveway. [Note: don't send me email about the tariff classification of salt. That is an example of English, not legal advice on how to classify salt.]
The silicone bands in Bill's ruling clearly have two different uses. Some are imitation jewelry and some are for binding things together like regular office supply rubber bands, only nicer.
The classification issue is that if the silicone bands are classifiable as imitation jewelry (Heading 7117), they are precluded from classification as articles of rubber in Chapter 39 by Chapter Note 2. The problem is that while the products are very similar in construction, the printed or embossed designs or lack thereof indicate that some of them are decidedly not jewelry. How to make a consistent classification analysis?
Like the court in GRK, Customs and Border Protection looked back to an old case call United States v. Quon Quon, 46 CCPA 70 (1959), in which the old Court of Customs and Patent Appeals said that use is :of paramount importance" in determining the identify of a manufactured article. [Editor's Note: Is Quon Quon a character in the Star Wars universe?]
When you look at it that way, it becomes obvious which of these silicone bands are jewelry and which are not. Or does it? Frankly, it is a little hard to tell without pictures. There seems to have been a lot of weight given to how the importer described the goods and their intended uses. Customs and Border Protection, which had samples of the goods, made the call based on design, lettering, and stated intended purpose.
I'm still not 100% comfortable with this approach under the Harmonized System, as opposed to the old TSUS, which was in place when Quon Quon was decided. I don't like it because it adds an element of subjectivity to tariff classification and makes superficial differences like printing determinative of classification.
What was the alternative? That's the hard question. Some of these are clearly jewelry, in that they are intended to be worn as decoration. That takes me back to my GRK analysis. Maybe, the right thing to do is to treat "Jewelry" not as an eo nomine description at all but as a description that necessarily includes as an intended use personal adornment. That's what I said about wood screw, which implies use in wood. If jewelry is, under my unorthodox and possibly crazy analysis, actually a use provision, then this whole issue goes away. Under that approach, the HTSUS mandates a consideration of use and the classifications for these silicone bands would vary accordingly.
HQ H236523 (July, 2, 2014), is a request to Customs and Border Protection to reconsider the classification of various styles of silicone bands. These are similar to, but not in all cases the same as, those charity and awareness bracelets people wear. Some were sized to be worn as rings, rather than around the wrist. Importantly, some were not intended to be worn at all but were intended to be used as bindings for printed material or for sets of shirts and caps. Most were printed with some text or design.
The reason this ruling is interesting is that it follows directly from the GRK decision we recently discussed here. In that case, the U.S. Court of Appeals for the Federal Circuit reiterated an old notion that the use of a product can be used as evidence of proper classification in an eo nomine tariff provision. That notion is inconsistent with the conventional wisdom that the use of imported goods is only relevant when the tariff makes it relevant, which would be in a so-called "use provision." An eo nomine provision, on the other hand, describes the product by name, which is usually independent of use. Salt, for example, is salt whether used in cooking or on a frozen driveway. [Note: don't send me email about the tariff classification of salt. That is an example of English, not legal advice on how to classify salt.]
The silicone bands in Bill's ruling clearly have two different uses. Some are imitation jewelry and some are for binding things together like regular office supply rubber bands, only nicer.
The classification issue is that if the silicone bands are classifiable as imitation jewelry (Heading 7117), they are precluded from classification as articles of rubber in Chapter 39 by Chapter Note 2. The problem is that while the products are very similar in construction, the printed or embossed designs or lack thereof indicate that some of them are decidedly not jewelry. How to make a consistent classification analysis?
Like the court in GRK, Customs and Border Protection looked back to an old case call United States v. Quon Quon, 46 CCPA 70 (1959), in which the old Court of Customs and Patent Appeals said that use is :of paramount importance" in determining the identify of a manufactured article. [Editor's Note: Is Quon Quon a character in the Star Wars universe?]
When you look at it that way, it becomes obvious which of these silicone bands are jewelry and which are not. Or does it? Frankly, it is a little hard to tell without pictures. There seems to have been a lot of weight given to how the importer described the goods and their intended uses. Customs and Border Protection, which had samples of the goods, made the call based on design, lettering, and stated intended purpose.
I'm still not 100% comfortable with this approach under the Harmonized System, as opposed to the old TSUS, which was in place when Quon Quon was decided. I don't like it because it adds an element of subjectivity to tariff classification and makes superficial differences like printing determinative of classification.
What was the alternative? That's the hard question. Some of these are clearly jewelry, in that they are intended to be worn as decoration. That takes me back to my GRK analysis. Maybe, the right thing to do is to treat "Jewelry" not as an eo nomine description at all but as a description that necessarily includes as an intended use personal adornment. That's what I said about wood screw, which implies use in wood. If jewelry is, under my unorthodox and possibly crazy analysis, actually a use provision, then this whole issue goes away. Under that approach, the HTSUS mandates a consideration of use and the classifications for these silicone bands would vary accordingly.
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