In ruling NY N322379 (October 25, 2021), Customs and Border Protection (CBP) discussed the classification of decorative LED lanterns from China. There are four distinct decorative lanterns. The first lantern measures approximately 13” in diameter and is 22” tall. It is constructed of thin rattan rods that form an inner core and crisscross around the outside to form an open-work lattice that allows light to shine through. The lantern is rounded towards the middle and tapers towards the opening at the top. The second lantern measures approximately 18” tall and is also constructed of thin rattan rods that form a birdcage-like appearance. The rods are held in place by an iron frame. In addition, this lantern also features a metal handle. A plastic, battery-operated light is positioned in the base of both of these first two lanterns.
The third lantern comes with an inner structure made of Paulownia woods and an outer lattice work of interwoven Poplar strips. This lantern features a jute handle as well as a plastic, battery operated light positioned at the bottom of the lantern. Alternatively, the fourth lantern is constructed of Paulownia wood with an outer lattice work of interwoven Paulownia strips. It comes with a rope handle, and, like the third lantern, has a plastic, battery operated light positioned at the bottom. Batteries are not included in any of the four lanterns.
In their analysis, CBP determined that the lanterns do not meet the definition of lamps or light fixture since they are used for a decorative effect. As such, decorations are excluded from Heading 9405 by Note 1(1) of Chapter 94. Next, CBP noted that the lanterns meet the definition of a composite good – within the meaning of General Rule of Interpretation (GRI) 3(b) – due to their multiple materials. The agency notes that GRI 3(b) states, in pertinent part:
(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
Establishing that the lanterns are composite goods, CBP turned to define what gives them their essential character. CBP determined that the essential character of the lanterns is imparted by the external interwoven elements – in this case the rattan rods for the first two lanterns and the wooden strips for the second two lanterns. Notably, while both the rattan rods and the Poplar and Paulownia wooden strips meet the definition of plaiting material in Chapter 46, Harmonized Tariff Schedule of the United States (HTSUS), they note that the rattan rods are considered wickerwork due to their round cross-section. However, the Poplar strips and Paulownia pieces are not. As such, for the first two rattan lanterns, CBP determined that the applicable subheading is 4602.12.3500, HTSUS, which provides for “Basketwork, wickerwork and other articles, made directly to shape from plaiting materials or made up from articles of heading 4601: Of vegetable materials: Of rattan: Other: Wickerwork.” The rate of duty is free. Alternatively, CBP determined that the applicable subheading for the Poplar and Paulownia lanterns is 4602.19.4500, which provides for “Basketwork, wickerwork and other articles, made directly to shape from plaiting materials or made up from articles of heading 4601: Of vegetable materials: Other: Other: Of willow or wood: Other.” The rate of duty is 6.6% ad valorem.
Additionally, pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, Chinese products under subheadings 4602.12.3500 and 4602.19.4500, 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 subheadings 4602.12.3500 and 4602.19.4500, HTSUS.