Printed Foil is not Printed Matter

What is the correct tariff classification for an aluminum foil laminated with plastic that is used as packaging material for pharmaceutical products and medical devices? More to the point of Amcord Flexibles Kreuzlingen v. United States, does it matter if there are words printed on the material?

The merchandise at issue in this case looks like this:

The Court of International Trade previously addressed the classification of this material without the printing in a case called Amcor Flexibles Singen Gmbh v. United States. In that case, the Court determined that the flexible aluminum foil and plastic material was properly classified in Heading 7607 as a product of aluminum. 

The new question presented to the Court is whether the same material, when printed, is transformed into "printed matter" of Heading 4911. If your first reaction to that theory is "come on, that's crazy," just remember that the difference between paper "of a kind used for printing" of 4802 and printed material of 4911is just whether it is printed. So hold that thought.

Plaintiff's theory is based on Aero Rubber, a case holding that those silicone bracelets (or similar bands) with words or numbers embossed on them are printed matter of Heading 4911 when the words or numbers are not merely incidental to the primary use of the product. Printing is not merely incidental when it conveys a message or information. In contrast, if the words, numbers or other symbols are merely decorative and do not convey information, then the bracelets are classified as articles of Heading 3926. The Formpack material at issue in this case has information printed on it. That seems to make Aero Rubber relevant. 

It is, however, not relevant. The "merely incidental" test comes from Section VII, Note 2, which states: "Except for the goods of heading 3918 or 3919, plastics, rubber, and articles thereof, printed with motifs, characters or pictorial representations, which are not merely subsidiary to the primary use of the goods, fall in chapter 49." On its face, this note distinguishes between articles of plastic and rubber on the one hand and printed matter of Chapter 49 on the other hand. The Formpack material is not classifiable in Section VII as an article of plastic or rubber and, therefore, the Section Note is not relevant.

Plaintiff also argued that the printing on the Formpack was sufficient to implicate Chapter 76, Note 1(d), the current version of which (Section XV Note 9(d)) provides that: 

Headings for plates, sheets, strip, and foil apply, inter alia, to plates, sheets, strip, and foil with patterns (for example, grooves, ribs, checkers, tears, buttons, lozenges) and to such products which have been perforated, corrugated, polished or coated, provided that they do not thereby assume the character of articles or products of other headings.

This note raises the possibility that the printing on the Formpack was sufficient to give it the character of printed matter of Heading 4911. If true, that would preclude classification in Heading 7607. 

Classifiers should not how this is playing out. The plaintiff is facing a potentially unfavorable rate of duty. To look for a reasonable way of legally reducing that liability, the plaintiff is properly focused on the text of the notes, which are legally binding on Customs and on the Court, to the extent they apply.

For Plaintiff, the unfortunate news is that the Court disagreed that this note helps. At what point would printing on aluminum foil transform it into printed matter? The Court reasonably concludes the answer is when the printing "subsumes the foil" to the point that it would no longer be described as foil. Think about paper. Naked paper is paper. Printed paper is a book, a picture, a brochure, or some other example of printed matter. At that point, the printing is more important than the paper itself. That is in contrast to paper that, for example, is printed with a watermark showing the manufacturer or the logo of the seller. That mark is clearly communicating something, but the paper remains paper. Here, the Court found that the printing on the Formpack foil did not convert it into printed matter and, for what it is worth, also did not convert it into labels.

Moving on . . . .

That leaves us with merchandise classifiable in Heading 7607. Normally, this is where the case ends because once you have arrived at the Heading, identifying the correct tariff item is easy. That is not the case here. Instead, there are two competing tariff items.

The first is 7607.20.10 (3.7%), in short, foil, backed, "covered or decorated with a character, design, fancy effect or pattern." The second is 7607.20.50 (free), which covers foil, backed, other. This takes the Court back to examining the printing to determine whether it constitutes "a character, design, fancy effect or pattern." The Court found that repeated blocks of text are not within the meaning of "a character, design, fancy effect or pattern" as those terms imply a decorative rather than informative motif. The fact that the text is repeated and forms a pattern on the uncut product was not sufficient to convert the material to a product of 7607.20.10.

That is a win for the Plaintiff. And, at no point did the Court have to step outside of General Rule of Interpretation 1. That is how most classification disputes play out. The general lesson is that if you are debating essential character or relative specificity, there is a better than decent chance that you are heading down the wrong path. You might need to get there, but be wary of stepping beyond GRI 1.