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Harmonized System Tariff Classification Exercises

Below you will find the exercises covered in our Harmonized System Classifications: Learning By Doing

 

These exercises will be discussed during the first webinar in the series on October 10, 2017. A second set of exercises will be sent to attendees a week prior to second webinar in the series on October 24, 2017.

 

 

Question #1: Your company manufactures a drone (an “unmanned aerial vehicle” or “aerial vehicle system”) which is known as the “Helicam.” The Helicam’s applications include ground, sea and aerial surveillance, target acquisition, target designation, communications relay, precision delivery and minefield and surface ordnance survey. When the vehicle leaves the pilot’s visual range, the drone is operated in manual mode and the pilot must use the control station screen where there is a video feed from the on-board pilot camera to maintain situational awareness and orientation. The camera is fix-mounted to the front of the vehicle so it cannot be rotated, aimed or directed separately from the vehicle. A data transceiver receives the eventual control commands and continuously transmits navigational and operational data to the control station. It is then processed through the control station into the storage media consisting of two 8GB removable hard disk drives, an integrated CD-ROM drive, and an integrated read/write DVD drive.  Your company’s website describes the UAV system as follows:

 

The Helicam is a fully autonomous aerial vehicle system developed for a wide variety of civil and military applications. The system consists of the aerial vehicle and the control station with associated antennas and support equipment, including an optional support vehicle. The Helicam operates in vertical take-off and landing modes, without any need for launch and recovery equipment. The system’s modular design allows it to be man-carried and easily transported in a light utility vehicle. The aerial vehicle is autonomously stabilized and can hover on station for extended periods. It is ideal for use in high-threat environments. In addition to military missions, the Helicam system is also ideally suited for a broad range of civilian and police applications such as disaster response, day/night traffic surveillance, environmental monitoring and border patrol. It has demonstrated successful operation from a ship at sea without additional landing assistance.


A commodity jurisdiction request was submitted to the State Department’s Directorate of Defense Trade Controls, which concluded that it was subject to the International Traffic in Arms Regulations (ITAR) and covered by U.S. Munitions List Category VIII(a) as an unmanned aerial vehicle (“UAV”). Your company wants to begin marketing the aerial vehicle to law enforcement agencies in Canada and Mexico, and has received a purchase order from a customer in Mexico for one Helicam. You have already secured a DSP-5 license from the State Department to export the Helicam to Mexico. What is the HTSUS classification of the Helicam? And where would the spare parts for the Helicam be classified?

 

Tips & Hints:

  • Apply the GRIs in order and read the Section and Chapter Notes.

 

 

  • Consider the following Explanatory Notes provisions:
    • EN 85.25: Heading 8525 provides, in part, for television cameras, whether or not with an incorporated device for remove control of lens and diaphragm as well as for remote control of the horizontal and vertical movement of the camera (e.g., television cameras for television studios or for reporting, those used for industrial or scientific purposes or for supervising traffic).

 

  • EN 88.02: Heading 8802 covers heavier-than-air aircraft, which are mechanically propelled. This group includes aeroplanes (landplanes, seaplanes and amphibians), gyroplanes (equipped with one or more rotors rotating freely on vertical axes), and helicopters (equipped with one or more mechanically driven rotors). Such aircraft may be used for military purposes, the transport of persons or goods or for such activities as training, aerial photography, agricultural work, rescue duties, fire-fighting or for meteorological or other scientific purposes. Radio-guided aircraft controlled from the ground or from another aircraft are covered by this heading, as are aircraft specially constructed so that they can be used as road vehicles.

 

 

 

 

Question #2:  Your company wants to import a disassembled helicopter (FD531) and associated components for this model from the United Kingdom. This model is built with certain standard components, such as a fuselage, tail assembly, and rotor assembly, and each completed helicopter is assigned a unique serial number. The parts and accessories included with the FD531 includes the following: Cockpit Fire Extinguisher; Fly-Away Gear Kit consisting of logbooks and flight manuals, oil and fuel catch cans, weight balancing and landing gear brackets, engine covers, tie-down straps, and flight accessories such as a sun shade and co-pilot flight control covers; and, ground-handling wheels that can be placed under the helicopter’s skids to facilitate movement and repositioning of the helicopter on a tarmac after landing or independent of flight operations. To avoid damage during shipment to the United States, each completed FD531 is disassembled and palletized in the UK prior to export. Any additional equipment that is not permanently affixed to the assembled helicopter is packaged with the disassembled helicopter components and the helicopter, including all disassembled components and additional equipment specific to the model. All of these items are transported to the United States in a single shipment. After importation, your company takes possession of the disassembled helicopter and reassembles it for delivery to the purchaser. The helicopter is reassembled in the same configuration in which it was originally manufactured and flight-tested in the UK. What is the HTSUS classification of the FD531 helicopter and the included equipment?

 

Tips & Hints:

  • Apply the GRIs in order and read the Section and Chapter Notes.
  • Consider the following HTSUS Headings: Heading 8424, Heading 8802, Heading 8803. You can access the HTSUS online at: https://hts.usitc.gov/current.

 

 

 

 

Question #3: Your company manufactures impact sockets or power socket sets which contain 8 individual impact sockets in drive sizes ½, ¾, 3/8, 5/8, 5/16, 7/16, 9/16 and 11/16 inch. The sockets are packaged in a metal storage tray inside a cardboard box. They are specially heat-treated steel to withstand the torque of air impact wrenches, which are hand-operated tools commonly that are used for tightening or removing lug nuts on automobile and truck wheels. Each socket has a contoured ridge at the base that permits it to fit loosely in the tool holder for increased impacting action. Each socket also has two equidistant holes drilled at the base. Pins on the toolholder fit into these holes to insure proper alignment of the socket. Your company receives an order from Mexico for 200 of these sets, which are valued at $200 each. You have determined that these sets are classified as EAR99 under the Export Administration Regulations. What is the HTSUS tariff classification for these sets?

 

Tips & Hints:

  • Apply the GRIs in order and read the Section and Chapter Notes.

 

  • Consider the following HTSUS Headings: Heading 8204, Heading 8207, Heading 8467. You can access the HTSUS online at: https://hts.usitc.gov/current.

 

  • The relevant Explanatory Notes provisions provide as follows:

 

  • EN 8204.20: This subheading includes interchangeable spanner sockets, with or without handles including drives and extensions.

 

  • EN 82.06: Heading 8206 includes sets of car mechanic’s tools including socket sets.

 

 

 

 

Question #4: Your company manufactures a replacement kit which contains replacement parts and cleaning suppliers for the “Mini Micro Water Filter.”  The Mini Micro Water Filter system is a travel-sized filter used to remove waterborne contaminants from outdoor water sources such as lakes and rivers. The system consists of a round pump handle which leads into the body of a pump. A tube extends out from the bottom of the filter. The user places the tube in a stream, creak or other body of fresh water and uses the hand pump to pump water through the tube and up into the body of the filter. The unfiltered water is channeled into the space outside the ceramic element and inside the filter’s outer casing. Pressure forces the unfiltered water through the ceramic element into a hollow center. The small pore size of the ceramic element prevents most bacteria and dirt from passing through the ceramic element. The filtered water travels up the channel inside the ceramic element’s center and out the spout of the top aluminum fitting. The user can safely drink water filtered by the system. Once the ceramic element’s filtering life span expires, the user can order this replacement kit which consists of:

 

  • Silver impregnated ceramic filter element
  • Purple gauge
  • Cleaning pad
  • O-ring
  • Lubricant
  • Plastic bag
  • Outlet hose
  • Silicone tube
  • Pocket clip

 

These articles are kitted in a cardboard box. The ceramic filter element is the largest and most expensive item in the kit—it is a long tube of ceramic impregnated with 0.160 grams of silver. The silver works as a disinfecting agent and impedes the growth of bacteria on the ceramic element. At the top and bottom of the tube are aluminum fittings which work to fasten the ceramic element into the assembled filter. The top aluminum fitting includes the small exit spout for the filtered water. In the center of the ceramic element is a stainless-steel tube to accommodate the piston for the pump subassembly. The value of the aluminum fittings and stainless-steel tube is greater than the value of the ceramic portion of the ceramic element. You have received an order from a customer in Colombia for 1100 of these kits which are valued at $75 each. You have determined that the kits are classified as EAR99 under the Export Administration Regulations. What is the HTSUS classification for the kits that should be reported in the Electronic Export Information (EEI) filing?

 

Tips & Hints:

  • Apply the GRI’s in order and read the Section and Chapter Notes.

 

 

  • The Explanatory Notes to Chapter 84 provide that a “ceramic article retains its ceramic character even if it incorporates components of minor importance of other materials, such as stoppers, joints, taps, etc. However, a ceramic material loses its ceramic character if it (a) contains a high proportion of components of other materials (such as metals), (b) is incorporated or permanently mounted in frames, cases or the like, of other materials, or (c) it combines static ceramic portions with mechanical portions such as pumps, motors and other moving components of a different material.”

 

 

 

 

Question #5: Your company imports compressed gasket material (“Tufflon 4800”) that is manufactured in Canada. Tufflon 4800 is composed, by weight and by value, of the following components:

 

Components

Weight %

Value %

Rubber

12.45

26.70

Solvent

Negligible

6.36

Chemical

0.73

1.24

Mineral Filler

32.42

12.94

Synthetic Pulp

4.31

51.68

Other Pulp

5.09

57.23

 

 

Your company’s website provides the following product description:

 

Tufflon 4800 contains high temperature synthetic fibers and minerals combined with a high-grade nitrile NBR rubber. Tufflon 4800 exhibits higher temperature limits than aramid-based materials and the handling and cutting characteristics are greatly improved over carbon and glass fiber products.

 

The manufacturing process is as follows: Rubber sheeting or slabs are mixed with a solvent until the rubber becomes a pasty mush. This mush is mixed with rubber curing agents. In a separate dry mix operation, synthetic and other fibers are combined with the mineral fillers. To this dry mixture is added the pasty rubber mush. The combined mixture is processed for 30 – 60 minutes into a crumbly dough, and more solvent is added to maintain pliancy. The dough is fed into a hopper of a two-roll rubber sheet manufacturing machine consisting of one hot and one cold roll. The hot roll is the take-up roll, which the cold roll serves to compress the dough evenly across the hot roller as both rolls rotate. The rollers are set 1/1000 of an inch apart. Small amounts of the dough are added continuously to the hopper of the shelter. At the end of one revolution, the rollers are set another 1/1000 of an inch apart, and the process is repeated until the desired thickness is reached. The sheet is then removed from the hot roller. What is the HTSUS classification of the Tufflon 4800 product?

 

Tips & Hints:

  • Apply the GRI’s in order and read the Section and Chapter Notes.
  • Consider the following HTSUS Headings: Heading 4008, Heading 5604, Heading 6815. You can access the HTSUS online at: https://hts.usitc.gov/current.

 

 

 

 

Question #6: Your company imports nylon and leather carrying cases for notebook computers. The cases are designed to fit the model of notebook computer with which they are imported.  The cases have the appropriate dimensions and the appropriate interior padding for the computers that they carry to fit snugly and safely inside. The cases also have inside and outside pockets designed specifically to contain the accessories that come with the notebook computer.  In researching the tariff classification of the cases, you found a previous binding ruling issued by U.S. Customs and Border Protection (CBP) that appears to support the possibility that your cases should be classified in the same subheading as the notebook computers under GRI 5(a). For example, in HQ 964149 (2/11/2002), CBP classified a textile container for a portable video player by applying GRI 5(a). The container in that ruling had mesh panels specifically located to allow the sound to be heard from the speaker, and had gussets which were useful for angling the player for the correct viewing angle in a vehicle to allow the sound to be heard through the speaker. The contain also had metal loops for securing it to a vehicle and an opening in the bottom through which the power cord could be attached. Does GRI 5(a) apply to your company’s nylon and leather carrying cases here?

 

Tips & Hints:

  • Apply the GRI’s in order and read the Section and Chapter Notes.
  • Consider the following HTSUS Headings: 4202, 8471. You can access the HTSUS online at: https://hts.usitc.gov/current.

 

 

 

 

Question #7: Your company manufactures several models of ATMs. The Optiva 1200 is a lobby cash dispenser that is described on your website as a through-the-wall, walk-up cash dispenser that enables customers to withdraw cash, check balances and make transfers between accounts. It does not accept deposits. The machines include a consumer display, card reader, encrypted personal identification number (“PIN”) pad, consumer awareness mirror, and receipt printers.  Your company has received an order for 50 Optiva 1200 ATMs from a new customer in Brazil.  You have determined that the ATMs are EAR99 under the Export Administration Regulations. What is the HTSUS classification that should be reported in the Electronic Export Information (EEI) filing for the export shipment?

 

Tips & Hints:

  • Apply the GRI’s in order and read the Section and Chapter Notes.

 

  • Consider the following HTSUS Headings and Subheadings: Heading 8472, Subheading 8472.90.10, Subheading 8472.90.90. You can access the HTSUS online at: https://hts.usitc.gov/current.

 

  • The relevant Explanatory Notes provision (EN 84.72) provides as follows:  Heading 8472 includes, inter alia, …automatic teller machines with which customers deposit, draw and transfer money and see the balances of their accounts without direct contact with bank personnel.

 

 

 

 

Question #8: Your company, a cosmetic bath products company, imports recycled, blue-tinted glass half-moon-shaped jars from Thailand. The jars are made of an exceptionally thick glass and measure 3” wide by 7” long and 5” tall.  The jars’ bases are rectangular. They have an inward slope rising from the base. A short, wide neck meets the sides at the top of the jars. At the top of the neck is a lip measuring roughly 1” which is wider than the neck which gives it an overhang effect. The diameter of the mouth of the jars measures 2-3/16” and is closed with a round piece of cork.  The name of your company is molded into the bottom of the jar. The jars are produced by a semi-automatic machine and are valued at $1.00/each when purchased from the manufacturer in Thailand. The manufacturer created the jars from unique specifications only for your company, and you are the only U.S. importer of this type of jar. Your company catalog states “Packaging: We’ve created upscale packing for high visual impact on display.” What is the HTSUS classification of the half-moon-shaped glass jars?

 

Tips & Hints:

  • Apply the GRI’s in order and read the Section and Chapter Notes.

 

  • Consider Additional U.S. Rule of Interpretation 1(a).

 

 

  • The relevant Explanatory Notes provisions provide as follows: Heading 7010 covers all glass containers of the kinds commonly used commercially for the conveyance or packing of liquids or of solid products (powders, granules, etc.). The types of containers covered by this heading include: jars, pots and similar containers for the conveyance or packing of certain foodstuffs (condiments, sauces, fruit preserves, honey, etc.), cosmetic or toilet preparations (face creams, hair lotions, etc.), pharmaceutical products (ointments, etc.), polishes, cleaning preparations, etc. These articles are usually made of ordinary glass (colourless or tinted) by pressure in a mould usually followed by blowing with compressed air. They generally have a large opening, a short neck (if any) and as a rule, a lip or flange to hold the lid or cap. Some of these containers however may be closed by corks or screw stoppers….

 

 

 

Question #9: Your company manufactures a pumpkin carving kit called the “Jack-O-Lantern Deluxe.” The set contains two carving knives, a plastic scraper, a felt tip pen and paper stencils, two glitter glue pens, four candles.  Your company receives an order for 1200 sets for a customer in Mexico. You have determined that the set is classified as EAR99 under the Export Administration Regulations. What is the HTSUS classification that should be reported in the Electronic Export Information (EEI) filing?

 

 

Tips & Hints:

 

 

 

Question #10: Your company imports a windshield washer reservoir into the United States from Vietnam. This item is a plastic tank or container that supplies windshield washer fluid by means of a pump through feed lines to the spray nozzles. The pump is not a part of the reservoir. The washer nozzle assembly is a short rubber tube with a plastic taper or constriction used as a component of a window washer system to direct washer fluid onto the windows of the vehicle. What is the HTSUS classification of the windshield washer reservoir?

 

Tips & Hints:

  • Apply the GRI’s in order and read the Section and Chapter Notes.
  • Consider the following HTSUS Headings: Heading 8424, Heading 8708. You can access the HTSUS online at: https://hts.usitc.gov/current.

 

 

 

Webinar Details:

Part 1: October 10, 2017  1:00-2:30 PM EDT

Part 2: October 24, 2017  1:00-2:30 PM EDT

 

Length: 1 hour 30 minutes (Each webinar will be comprised of 1 hour of commentary and 30 minute Q&A session)

 

Cost:  $295 per person (additional employees from the same company $100 each)


Register Now **Contact us for special payment arrangements.

Each registrant will receive copies of the presentations, a certificate of completion, and access to both of the webinar recordings.