Newly Released CBP HQ Rulings for March 9
The Customs Rulings Online Search System (CROSS) was updated March 9 with the following headquarters rulings (ruling revocations and modifications will be detailed elsewhere in a separate article as they are announced in the Customs Bulletin):
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H321996: Instruments of International Traffic; 19 U.S.C. § 1322(a); 19 C.F.R. §§ 10.41a(a)(1), 10.41a(a)(2); HTSUS subheading 9803.00.50; Messer Canada Inc; steel cylinder
| Ruling: (1) The cylinders are IITs. (2) Cylinders are classified under 9803.00.50 (3) An IIT bond must be filed for the cylinders. (4) Messer should track the cylinders by individual barcode and report the location of each cylinder, as well as the barcode numbers of any scrapped containers to CBP on a monthly basis. (5) Valve change repairs which only serve to restore the cylinders to their original condition do not increase the value of the cylinders. (6) Repairs outside the U.S. to restore the cylinders’ pre-export condition do not change IIT classification. |
| Issues: (1) Whether these cylinders may be considered IIT? (2) If these cylinders may be considered IIT, would they be classified under HTS 9803.00.50? (3) Would a separate IIT bond be required? (4) Whether tracking the cylinders by individual barcode or a First In First Out method would be an acceptable inventory method? (5) Do valve change repairs increase the value of the affected cylinders? (6) If valve change repairs occur outside the US, does it disqualify the cylinder as IIT? |
| Items: Reusable cylinders made of steel. The cylinders that are filled with various gases in the U.S., exported to Canada, and are returned in a “near-empty” condition. |
| Reason: (1) The subject cylinders are "a substantial container or holder" as required for IITs. The cylinders are also suitable for and capable of repeated use. The subject cylinders hold merchandise independent of the shipping containers in which they are transported. (2) N/A (3) 19 C.F.R. § 10.41a(c) requires that IITs designated under 19 C.F.R. § 10.41a(a) require a bond to be filed on Customs Form 301 containing the bond conditions outlined in 19 C.F.R. § 113.66 prior to their release. (4) Messer has demonstrated the capacity to barcode and track individual cylinders, Messer should track the cylinders by individual barcode and report the location of each cylinder, as well as the barcode numbers of any scrapped containers to CBP on a monthly basis.(5) Replacing the valves with new valves which only serve to restore the cylinders to their original condition after “decay, waste, injury, or partial destruction,” would not increase the value of the cylinders. (6) U.S.-origin products exported in a new condition and then processed abroad to keep the product in operable and serviceable conditions are still entitled to duty-free treatment upon their return to the U.S. |
| Ruling Date: March 7, 2022 |
H322343: Request for Reconsideration; Restricted Merchandise; Switchblade Knives; 15 U.S.C. §§ 1241-1245; 19 C.F.R. §§ 12.95-12.103; Battenfeld Technologies, Inc.
| Ruling: The subject merchandise is a switchblade knife within the meaning of the Switchblade Knife Act. It does not fall within the exception found in 15 U.S.C. § 1244(5). The knife is prohibited entry into the U.S and will be retained by CBP and appropriately destroyed. |
| Issue: whether the subject knife is admissible into the United States under the provisions of the Switchblade Knife Act, 15 U.S.C. §§ 1241 to 1245, or 19 C.F.R. § 12.95(a) |
| Item: A folding knife composed of a two-piece, blue and black colored steel grip, and a tapered, single edged blade that operates under spring pressure. The blade is sharpened on one side and tapers toward a sharp tip. The grip with the blade retracted in the closed position is approximately 4 inches long and 1 inch wide at its widest point. With the blade fully extended out in the fully opened position, the entire knife is approximately 7 inches long. The blade of the knife in the opened position is approximately 3 inches long. The knife has a gray metal thumb slider that protrudes from one side of the knife and operates in a semicircular track along the inside the grip. Applying pressure with one’s thumb away from one’s palm while holding the knife deploys the blade out of the grip into the fully opened position with ease and great speed. No additional exertion is needed to open the knife once the slider is moved. The blade is then locked open by a spring mechanism that prevents closure until the spring is moved and released. |
| Reason: The knife at issue exhibits a spring and detent system which biases toward closing the knife. Overcoming this bias is achieved by applying exertion by hand to the thumb slider on the side of the handle, which indirectly causes the cam to exit the notch, at which point the blade springs to the deployed position. This places the knife squarely outside the exception in 15 U.S.C. § 1244(5) because the exertion is not applied by hand to the blade. |
| Ruling Date: March 7, 2022 |
H321226: Internal Advice Request; Computed Value; Cost or Value of Materials and Fabrication and Other Processing
| Ruling: Chamberlain’s computed value calculation should not include costs incurred during a mandatory shutdown during which no merchandise was produced. |
| Issue: whether Chamberlain’s computed value calculations for the first six months of 2020 should include costs incurred during a mandatory shutdown during which no merchandise was produced |
| Item: Garage door openers, gate openers and other perimeter-access products. The maquiladora uses materials and funding from Chamberlain to produce finished products and parts, which are then imported to the U.S. and entered for consumption at the Port of Nogales, Arizona. |
| Reason: Because no production occurred during the government-mandated shutdown period, the costs incurred during that time were not “employed in the production of the imported merchandise” within the meaning of 19 U.S.C. §1401a(e)(1). The maquiladora’s books record the relevant expenses in an extraordinary account rather than as part of the cost of goods sold. |
| Ruling Date: Jan. 7, 2022 |
H310305: Application for Further Review of Protest No. 5301-19-101449; Classification of surveillance kits
| Ruling: The subject kits are classified as 8525.80.30, which provides for: "Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras, digital cameras and video camera recorders: Television cameras, digital cameras and video camera recorders: Television cameras: Other.” |
| Issue: whether the surveillance kits are classified in heading 8521, HTSUS, as “[v]ideo recording or reproducing apparatus…” or in heading 8525, HTSUS, as “… television cameras, digital cameras and video camera recorders…” |
| Items: Two “Network Video Recorder Kits” and one “Digital Video Recorder Kit,” which are Network Security Systems consisting of a network video recorder and four or six network cameras, respectively. Each four megapixel eyeball camera has a 2.8 mm fixed lens, infrared light-emitting diode technology to capture images in low light, and an “Intelligent Video System” that allows the camera to monitor for intrusions, abandoned objects and tampering. The network video recorder contains an embedded quad-core processor, up to 8 MP resolution for preview and playback, and “plug and play” technology allowing the user to connect multiple cameras on the same network. The network video recorder incorporates motion-detection algorithms, alarm triggers and customizable recording functions, allowing the user to program the recorder as desired. Both the cameras and the network video recorder conform to the “Open Network Video Interface Forum” specification to ensure interoperability between network video products, regardless of manufacturer. Dahua’s Digital Video Recorder Kit (Item No. C542E42) contains four 1080p High Definition Composite Video Interface (“HDCVI”) eyeball cameras and one 4-channel 1080p HDCVI digital video recorder. The 1080p cameras offer full HD 1080p video but are designed to accommodate multiple video formats, to ensure compatibility with lower resolution video recorders. Like the cameras included in the network surveillance kits above, each 1080p eyeball camera has a 2.8 mm fixed lens and infrared LED technology to capture images in low light. The digital video recorder contains an embedded processor, and is likewise designed to be compatible with both HDCVI and HD/SD network cameras. |
| Reason: CBP and Dahua agree that the surveillance kits are sets. CBP has issued numerous rulings classifying surveillance systems imported as sets, dating back to 1995. Many of these rulings classify systems incorporating both cameras and recorders. In all these rulings, CBP has classified the merchandise as a set. In all but one of these rulings, CBP has determined that no one component of the set imparts essential character. Both the cameras and the video recorders are needed to achieve the surveillance function of the kit as a whole. As a result, neither the cameras nor the video recorder, taken alone, can impart the essential character of the kit. Therefore, the subject surveillance kits are classified pursuant to GRI 3(c), in the heading which occurs last in numerical order among those under consideration. In this instance, that is the heading applicable to the cameras, heading 8525, HTSUS. |
| Ruling Date: Dec. 9, 2021 |