In ruling NY N320917 (September 2, 2021), Customs and Border Protection (CBP) discussed the classification of four wine preservation systems. A breakdown of the four products is provided below:

• Model Three SL: consists of a Coravin Model Three device, a needle clearing tool, a bottle bag, and in some instances a screw cap;
• Model Three Plus: consists of a Coravin Model Three device, an aerator, two screw caps, a needle clearing tool, and a bottle bag;
• Model Pivot: consists of a Coravin Pivot device, two pivot stoppers, and a bottle bag; and
• Model Pivot Plus: consists of a Coravin Pivot device, a pivot aerator, two pivot stoppers, and a bottle bag.

All four products are to be repackaged with gas argon capsules upon importation. CBP found that the items do not represent a set in accordance with Explanatory Note X due to the fact that the system is repacked to include the argon gas capsules upon importation. As such, CBP classified each item separately.

Both Model Three and Model Pivot devices are primarily plastic, handheld devices that are used to compress argon gas in order to allow a user to pour wine from an unopened wine bottle. With the Model Three device, a user aligns the SmartClamps™ over the bottle’s neck and pushes on the handle to insert the thin metal needle through the cork and into an unopened wine bottle. Once inserted, the needle facilitates the flow of argon gas from the device into the bottle and draws wine out. The device also comes with a hand-operated trigger that allows the user to regulate the flow of the compressed argon gas. In order to pour the wine, a user tilts the bottle towards a glass and presses the trigger button to send argon gas into the bottle and force pressurized wine to flow up the needle to the pouring spout. Once the device and its needle are removed, the cork reseals itself and the argon gas within the bottle prevents the wine from spoiling through oxidization. Alternatively, the Model Pivot device is a single-system where the user replaces the cork of a bottle with a pivot stopper. The user then inserts a gas argon capsule into the Model Pivot device. For this case, the device’s metal insert is pushed through the pivot stopper, where a trigger button at the top of the device allows for the flow of argon gas into the bottle in order to release the wine. Once the device is removed from the bottle, the pivot stopper is closed to seal the wine bottle. CBP determined that the applicable subheading for both devices is 8481.80.5090, HTSUS, which provides for “Taps, cocks, valves and similar appliances, for pipes, boiler shells, tanks, vats or the like, including pressure-reducing valves and thermostatically controlled valves; parts thereof: Other appliances: Hand operated: Of other materials: Other.” The general rate of duty is 3 percent ad valorem.

The bottle bag accessory is designed to be used with a wine bottle to provide protection and containment of glass. It is composed of 100% nonwoven polypropylene textile material and measures 6 inches in width by 11 ½ inches in height. CBP found the applicable subheading to be 6307.90.9891, HTSUS, which provides for “Other made up articles, including dress patterns:  Other:  Other:  Other:  Other:  Other.” The general rate of duty is 7 percent ad valorem.

The stainless-steel needle clearing tool for the Model Three SL and Model Three Plus is used to clear cork from inside the needle. A user can use the tool to push cork down from the top of the eye of the needle in order to clear the pathway. CBP determined that the applicable subheading for the needle clearing tool is 8205.59.5560, HTSUS, which provides for “Handtools (including glass cutters) not elsewhere specified or included; blow torches and similar self-contained torches; vises, clamps and the like, other than accessories for and parts of machine tools; anvils; portable forges; hand- or pedal-operated grinding wheels with frameworks; base metal parts thereof: other handtools (including glass cutters) and parts thereof: other: other: of iron or steel: other: other (including parts).”  The general rate of duty is 5.3 percent ad valorem

The screw cap that come with the Model Three SL and Model Three Plus is made of molded plastic and incorporates a silicone plug into the center to seal the bottle. Alternatively, the two pivot stoppers included with the Model Pivot and Model Pivot Plus systems are composed of silicone and are hollow. The stopper is inserted into the bottle to replace the removed cork and can be opened to insert the Model Pivot device for use. CBP found the applicable subheading for the screw cap and the pivot stoppers to be 3923.50.0000, HTSUS, which provides for “Stoppers, lids, caps and other closures, of plastics.” The general rate of duty is 5.3 percent ad valorem.

Lastly, the aerator (compatible with both the Model Three SL and Model Three Plus) and the Pivot Aerator operate in similar fashion, though this differ in size and angle of the wine spout. Both force wine through their two rings, which aerates the wine. The aerator, which is primarily of plastic material, consists of an inner separator, outer separator, a mid-separator, a screen, and a body. CBP found the aerators to be classifiable under subheading 3926.90.9985, HTSUS, which provides for “Other articles of plastics and articles of other materials of headings 3901 to 3914: Other: Other: Other.” The general rate of duty is 5.3 percent ad valorem.

In ruling NY N320340 (July 30, 2021), Customs and Border Protection (CBP) discussed the classification of three different from Argentina. A breakdown of the three products is provided below:

• Cheddar Sticks: composed of cheddar cheese, wheat flour, water, refined sunflower oil, modified starch, rice flour, salt, hydroxypropyl methylcellulose, pasteurized egg powder, flavoring, guar gum, mono and diglycerides of fatty acids, and annatto extract.
• Provolone Sticks: composed of provolone cheese, mozzarella cheese, wheat flour, water, refined sunflower oil, modified starch, rice flour, salt, hydroxypropyl methylcellulose, pasteurized egg powder, flavoring, spices, carboxymethylcellulose, onion powder, guar gum, mono and diglycerides of fatty acids, and annatto extract.
• Mozzarella Sticks: composed of mozzarella cheese, water, wheat flour, refined sunflower oil, modified starch, rice flour, salt, hydroxypropyl methylcellulose, pasteurized egg powder, flavoring, sugar, carboxymethylcellulose, spices, guar gum, powdered onion, mono and diglycerides of fatty acids, and annatto extract.

All three products are pre-fried and frozen, and will be imported for retail sale in packages that have a net weight of fifty-three ounces.

In its determination, CBP determined that each product could have two different classifications, depending on whether the product entered under quota. If the Cheddar Sticks entered under quota, CBP determined the applicable subheading to be 0406.30.2400, Harmonized Tariff Schedule of the United States (HTSUS), which provides for: “Cheese and curd: Processed (process) cheese, not grated or powdered: Cheddar cheese: Described in additional U.S. note 18 to this chapter and entered pursuant to its provisions.” The rate of duty is 16% ad valorem. If entered outside the quota (i.e. without a valid import license), the subheading would be 0406.30.2800, HTSUS, which provides for: “Cheese and curd: Processed (process) cheese, not grated or powdered: Cheddar cheese: Other.” The rate of duty is $1.227 per kilogram.

For the Provolone Sticks, the applicable subheading if entered under quota is 0406.30.7700, HTSUS, which provides for: “Cheese and curd: Processed (process) cheese, not grated or powdered: Other, including mixtures of the above: Other: Containing, or processed from, Italian-type cheeses (Romano, Reggiano, Parmesan, Provolone, Sbrinz and Goya): described in additional U.S. Note 21 to chapter 4 and entered pursuant to its provisions.” The rate of duty is 10% ad valorem. Outside the quota, the subheading is 0406.30.7900, HTSUS, which provides for: “Cheese and curd: Processed (process) cheese, not grated or powdered: Other, including mixtures of the above: Other: Containing, or processed from, Italian-type cheeses (Romano, Reggiano, Parmesan, Provolone, Sbrinz and Goya): Other.” The rate of duty is $2.146 per kilogram.

Lastly, for Mozzarella Sticks imported under the quota, the applicable subheading is 0406.90.9500, HTSUS, which provides for: “Cheese and curd: other cheese: Other cheeses, and substitutes for cheese, including mixtures of the above: Other, including mixtures of the above (excluding goods containing mixtures of subheadings 0406.90.61 or 0406.90.63): Other: Other: Containing cow’s milk (except soft-ripened cow’s milk cheese): Described in additional U.S. note 16 to chapter 4 and entered pursuant to its provisions.” The general rate of duty is 10% ad valorem. If entered outside of the quota (in this case without a USDA cheese-import license), the applicable subheading would be 0406.90.9700, HTSUS, which provides for: “Cheese and curd: other cheese: Other cheeses, and substitutes for cheese, including mixtures of the above: Other, including mixtures of the above (excluding goods containing mixtures of subheadings 0406.90.61 or 0406.90.63): Other: Other: Containing cow’s milk (except soft-ripened cow’s milk cheese): Other.” The general rate of duty is $1.509 per kilogram.

On August 26, 2021, U.S. Customs and Border Protection (CBP) announced that for FY 2021 between October 1, 2020 and August 6, 2021, the agency had detained approximately $368 million ($367,743,052) worth of cargo in relation to forced labor by issuing Withhold Release Orders (WROs). As noted by the agency’s trade statistics, this represented a total number of 967 detained shipments during this period of time, which marks an increase of 331 stopped shipments from the previous release of statistics in June 2021. In terms of total value of detained cargo, this represented a 562% increase compared to FY 2020 where CBP detained $56 million ($55,541,383) worth of cargo in relation to forced labor.

This increase shows the U.S. government’s continued efforts to exclude goods suspected of using forced labor from entering the United States. During its forced labor investigations, CBP works to identify if any of the International Labour Organization’s (ILO’s) 11 indicators of forced labor exist in an entity’s operations, which include the following:

• Abuse of vulnerability
• Deception
• Restriction of movement
• Isolation
• Physical and sexual violence
• Intimidation and threats
• Retention of identity documents
• Withholding of wages
• Debt bondage
• Abusive working and living conditions
• Excessive overtime

WROs are issued by the U.S. government when information reasonably but not conclusively indicates goods were made in whole or in part using forced labor. Merchandise detained under a WRO order must be exported immediately or a substantial submission made that provides specific information showing that the goods were not made with forced labor. To obtain a release of any shipment that has been subjected to a WRO, a certificate of origin along with this detailed statement regarding the merchandise’s production and supply chain origin must be submitted to CBP. CBP makes a determination on a case-by-case basis.

The latest trade statistics are available here.

For more information on actions Withhold Release Orders (WROs) and forced labor violations, contact our team and see previous posts below.

CBP Issues Withhold Release Order (WRO) on Certain Silica-Based Products from Xinjiang, PRC | International Trade Law (cmtradelaw.com)

Customs Denies Protest and Excludes Shipment of Cotton Garments for Violation of Xinjiang Withhold Release Order (WRO) | International Trade Law (cmtradelaw.com)

In ruling NY N320557 (August 4, 2021), Customs and Border Protection (CBP) discussed the country of origin of five Thin Film Transistor – Liquid Crystal Display (TFT-LCD) modules. All five modules are virtually identical in composition, as they are all composed of a TFT-LCD cell, polarizers, a backlight, a driver and control printed circuit board (PCB), and a flexible PCB for connection. TFT display technology allows for the construction of high-resolution LCD displays, and the modules – once completed – can be incorporated into a variety of consumers display applications.

The manufacturing process for the five modules is also identical. The process begins in Japan where the TFT-LCD cell is manufactured. The TFT is created by depositing transistors onto a substrate through chemical vapor deposition, while the color filter is manufactured by building a color matrix on a glass substrate. The creation process of the cells is then completed when a layer of liquid crystal is deposited between the color filter and TFT as the two part are bonded together, creating a sheet of TFT-LCD cells. As next steps, the sheet of cells is delivered to China to be cut into individual cells. The cut-up cells are then bonded to the printed circuit board assembly (PCBA) – which contains the driver and control circuity – before the polarizers, backlight, and flexible connection PCBA are attached.

In its determination, CBP notes that, as defined under 19 CFR 134.1(b), the country of origin is the “country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the ‘country of origin’ within the meaning of this part.”

CBP also established that “substantial transformation” takes place when a particular product “emerges from a process with a new name, character or use different from that possessed by the article prior to processing.” The agency explained that the completed TFT-LCD cell is what imparts the essential function of the module and that the manufacturing process in Japan is what renders the end-use of the product. Despite the assembly that took place in China, the process did not substantially transform the cell into a new and different article. As such, CBP determined that the country of origin of the five modules is Japan.

In ruling NY N320860 (August 9, 2021), Customs and Border Protection (CBP) discussed the tariff classification of a decorative wreath from China. The 22’’ “Thistle Asymmetrical Wreath” is a decorative door wreath fashioned from a dried grapevine wrapped with metal wiring to hold its shape. Each wreath is decorated with polyester fabric leaves and plastic thistles that wrap approximately two-thirds of the way around the wreath. The heaviest concentration of leaves and thistles is located at the bottom and tapers off up the sides.

The dried grapevines meet the definition of “plaiting materials” as set forth in Note 1 to Chapter 46 of the Harmonized Tariff Schedule of the United States (HTSUS), which states that plaiting materials refers to:

“materials in a state or form suitable for plaiting, interlacing or similar processes; it includes straw, osier or willow, bamboos, rattans, rushes, reeds, strips of wood, strips of other  vegetable material (for example, strips of bark, narrow leaves and raffia or other strips obtained from broad leaves), unspun natural textile fibers, monofilament and strip and the like of plastics and strips of paper, but not strips of leather or composition leather or of felt or nonwovens, human hair, horsehair, textile rovings or yarns, or monofilament and strip and the like of chapter 54.”

The wreath is also considered a composite article because it is made up of plaiting materials (i.e. the grapevines), polyester fabric, plastic, and metal wiring. For its classification, CBP referred to General Rule of Interpretation (GRI) 3(b), which provides that composite articles with different materials are to be classified “as if they consisted of the material or component which gives them their essential character.” CBP found that the grapevines confer the essential character of the wreath because the vines contribute to the wreath’s decorative appeal and provide the wreath with its structure and shape. As such, CBP determined that the applicable subheading for the Thistle Asymmetrical Wreath was 4602.19.6000, HTSUS, which provides for “Basketwork, wickerwork and other articles, made directly to shape from plaiting materials or made up from articles of heading 4601; articles of loofah: Of vegetable materials: Other: Other: Other: Wickerwork.” The rate of duty is free.

Additionally, pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, Chinese products under subheading 4602.19.6000, HTSUS, unless specifically excluded, are subject to an additional 25% ad valorem duty rate. As such, the chapter subheading 9903.88.03 must be reported in addition to subheading 4602.19.6000, HTSUS.