March 24, 2004 CBP Bulletin Notices on Metalized Polyester Embroidery Thread & Decorative Wired Trim and Satellite Radio Receiver Sets

CBP states that any party who has received a contrary ruling or decision on the merchandise that is subject to the proposed modifications or revocation, or any party involved with a substantially identical transaction, should advise CBP by April 23, 2004, the date that written comments on these proposed rulings are due.

Furthermore, CBP states that an importer's failure to advise CBP of such rulings, decisions, or substantially identical transactions may raise issues of reasonable care on the part of the importer or its agent for importations subsequent to the effective date of the final decision in these notices.

CBP also states that these notices cover any rulings on the subject merchandise that may exist but have not been specifically identified.

Proposed Modification of Two Classification Rulings

Metalized Polyester Embroidery Thread and Decorative Wired Trim. At issue in proposed HQ 966599 and proposed HQ 966438 are the following, respectively:

embroidery thread - This is a metalized polyester gold embroidery thread that is composed of polyester strip wrapped spirally (gimped) around a multifilament core which itself has no twist and does not twist with the strip.

decorative wired trim - This is composed of lengths of metalized plastic strips that have been wrapped around untwisted filament and a wire. A decorative "eyelash" effect is created by twisting groups of the plastic strips in 1 inch lengths at 1 inch intervals.

CBP states that for both articles the strips are considered textile material for tariff classification purposes.

CBP is proposing to issue HQ 966599 and HQ 966438 in order to modify NY J81433 and NY J82071, respectively, and classify the subject articles under HTS 5605.00.9000 as "other metalized yarn, whether or not gimped, being textile yarn, or strip or the like of HTS 5404 or 5405, combined with metal in the form of thread, strip or powder or covered with metal" rather than classifying the embroidery thread under HTS 5606.00.0090 which provides in pertinent part for "other gimped yarn, and strip and the like of HTS 5404 or 5405" and rather than classifying the decorative wired trim under HTS 5607.50.3500 which provides for "other twine, cordage, ropes and cables, etc. of other synthetic fibers, not braided or plaited."

CBP explains that the Explanatory Note (EN) to HTS 5605 states, among other things, that it covers yarn of any textile material (including monofilament, strip and the like, and paper yarn) covered with metal by any other process, and that it covers products consisting of a core of plastic film coated with "metal dust, sandwiched by means of an adhesive between two layers of plastic film."

According to CBP, the subject articles clearly meet the terms of HTS 5605 and are in accordance with the EN. Additionally, Section XI EN, General Note (I)(B)(2) Table I places metalized yarn in HTS 5605 "in all cases." Therefore, CBP states that the articles should be classified under HTS 5605.00.9000.

proposed: 5605.00.9000, 13.2% (Cat 201); current: 5606.00.0090 (embroidery thread), 8% (Cat 201); 5607.50.3500 (decorative wired trim), 19.9/kg 10.8% (Cat 201).

Proposed Revocation of a Classification Ruling

Satellite Radio Receiver Sets. At issue are three models of XM satellite radio kits: C model, R model, and H model. According to CBP, the request for reconsideration stated that the C and R models are advertised as predominantly for use in a motor vehicle, while the H model is primarily intended for the home. In addition, the satellite radio receivers in these kits incorporate Synchronous Dynamic Random Access Memory (SDRAM) for sound recording.

CBP is proposing to issue HQ 966675 in order to revoke NY I84878 and reclassify the C and R models under HTS 8527.21.40 as "other radiobroadcast receivers not capable of operating without an external source of power, of a kind used in motor vehicles, etc., combined with sound recording or reproducing apparatus" and the H model under HTS 8527.31.60 as "other radiobroadcast receivers, etc., combined with sound recording or reproducing apparatus" rather than classifying all three models under HTS 8527.29.80 which provides for "other radiobroadcast receivers not capable of operating without an external source of power, of a kind used in motor vehicles, etc."

CBP explains that the C and R models are advertised for installation in a motor vehicle, and are sold as a set for retail sale with accessories such as the car docking station for use in a motor vehicle or the cassette adapter or RF modulator to connect the receiver to an existing car stereo. However, the H model is advertised and sold with a home accessory kit (although the user may separately purchase a car accessory kit).

CBP also states that information has been submitted that states that all three of the kits incorporate SDRAM, which is sound recording apparatus.

Therefore, CBP states that the three kits should be classified as described above.

proposed: 8527.21.40, duty-free (C and R models); 8527.31.60, duty-free (H model); current: 8527.29.80, 4.4%

March 24, 2004 CBP Bulletin (Vol. 38, No. 13) available at http://www.cbp.gov/xp/cgov/toolbox/legal/bulletins_decisions/bulletins_2004/vol38_03242004_no13/