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HQ 081428


October 27, 1988

CLA-2 CO:R:C:G 081428 LS

CATEGORY: CLASSIFICATION

TARIFF NO.: 9102.11.45

Dorothy J. Scherer
Kenehan International Services
727 Wright Brothers Lane
Las Vegas, Nevada 89119

RE: Tariff classification of quartz analog wrist watch with two movements

Dear Ms. Scherer:

This is in response to your letter of December 3, 1987, written on behalf of your clients, Alexander and Melinda Mahban, proprietors of Princess Furs, requesting a classification ruling on a quartz analog wrist watch. A sample of the watch was submitted for our examination.

Your inquiry regarding the country of origin marking and the special marking requirements for watches has been referred to the Value, Special Programs and Admissibility Branch. That branch will issue a separate ruling under file no. 731546.

FACTS:

The sample watch consists of two battery-operated quartz analog watch movements in a single base metal watch case, with a leather watch strap attached to the lugs at each end of the case. The inscription "Prince Vera Nocce" appears on the surface of the face, between the two movements. The two movements are complete entities that are independent of each other. Each movement has its own battery, quartz crystal, integrated circuit, stepping motor and gear train. The difference between the two movements is that one has dials in Arabic numerals and the other has dials in Roman numerals. Each watch can be set independently.

The two movements are identical electromechanical movements that combine mechanical and electronic timekeeping technologies. The movements possess moving parts to which and from which motion is transferred. Both movements are slightly over 0.60 inch wide and each movement has an anti-friction jewel. The movements are made in Japan by Akita Ltd. and the watch case is a product of Hong Kong. The movements are encased in Hong Kong. The leather
strap and battery are entered with the watch. While the battery is marked to show Japan as the country of origin, the leather watch strap is not marked with its country of origin.

ISSUE:

What are the applicable tariff classification provisions under the Tariff Schedules of the United States Annotated (TSUSA) and the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) for the subject quartz analog watch with two movements?

LAW AND ANALYSIS:

In Belfont Sales Corp. v. United States, Slip Op. 87-90 (Ct. Int'l. Trade, decided July 30, 1987, motion for rehearing pending), the U.S. Court of International Trade held that a quartz analog watch was dutiable under item 688.45, TSUSA, which provides for "electrical articles and electrical parts of articles, not specially provided for: . . . Other." The court found that the watch, which did not entail rewinding, was not dutiable under items 716.27 and 716.29, TSUSA, because the heading to those items requires the movements to be "not self- winding," and "not constructed or designed to operate for a period in excess of 47 hours without rewinding."

Pursuant to 19 CFR 177.7(b), we cannot issue a binding ruling letter on the watch under the TSUSA because a motion for rehearing is pending in Belfont Sales Corp., supra. We are instead issuing an information letter, pursuant to 19 CFR 177.1(d)(2), regarding classification under the TSUSA. Until Belfont Sales Corp. becomes final, quartz analog watches, such as the instant watch, will be classified according to existing practice under Schedule 7, Part 2, Subpart E, TSUSA, which provides for watches, clocks, and timing apparatus. Pending the outcome of the motion for rehearing in Belfont Sales Corp., you should take all actions necessary to protect your interests with respect to existing entries, such as the filing of a protest if the entry has already been liquidated.

Watches with quartz analog movements are classifiable as watches under item 715.05, TSUSA. Item 715.05 provides for the application of separate duty rates for the cases and movements as if the cases and movements were imported separately. Headnote 3, Subpart E, Part 2, Schedule 7, TSUSA, provides that the complete tariff citation for watches is item 715.05, followed by the appropriate item numbers for the respective movements and cases comprising the watches.

Under existing practice, the instant watch would be classifiable under the following eo nomine provisions: 715.05 - 716.0940 - 720.2800, TSUSA. See Headquarters Ruling Letter 077973 (classification of a watch with a quartz analog movement). Thus, each watch movement would be classified under item 716.0940, which provides for "watch movements . . . with dials or hands whether or not assembled thereon: having no jewels or not over 17 jewels: not adjusted, not self-winding . . ., and not constructed or designed to operate for a period in excess of 47 hours without rewinding: having no jewels or only 1 jewel: over 0.6 but not over 0.9 inch in width: other." The watch movements are dutiable at 36 cents for each movement. This classification is consistent with New York Ruling Letter 805760, which determined that a chess clock, consisting of two separate quartz analog clock movements measuring less than 1.77 inches in width, is classifiable under items 715.15 - 720.02 - 720.34, TSUSA. The two watch movements in the clock were dutiable at 33 cents each.

The base metal watch case of the instant quartz analog watch would be classifiable under item 720.2800, TSUSA, which provides for other cases which are not wholly and not almost wholly of gold or platinum or of both gold and platinum. The case is dutiable at 4 cents plus 8.5 percent ad valorem.

The watch strap would be separately classifiable under the provision for leather straps in item 791.5400, TSUSA, and would be dutiable at the rate of 2.8 percent ad valorem if it is produced in a column 1 country. If the strap is produced in a country which is designated a beneficiary developing country for purposes of the Generalized System of Preferences, it may be eligible for duty-free entry. The watch battery would also be separately classifiable under the provision for primary cells and primary batteries in item 682.9500, TSUSA, and would be dutiable at the rate of 5.3 percent ad valorem since it is a product of a column 1 country.

The Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is scheduled to replace the TSUSA. Classification under the HTSUSA is in accordance with the General Rules of Interpretation (GRI's). GRI 1 provides that classification is determined first in accordance with the terms of the headings and any relative section or chapter notes. Note 3 to Chapter 91, Section XVIII defines watch movements as "devices regulated by a balance wheel and hairspring, quartz crystal or any other system capable of determining intervals of time, with a display or a system to which a mechanical display can be incorporated." Additional U.S. Note 2 provides that watch
straps entered with the wrist watch and of a kind normally sold therewith are classified with the watch. Additional U.S. Note 3 provides that batteries entered with battery powered watches and intended for use therewith are classifiable under the provision for the watch.

HOLDING:

With respect to classification under the TSUSA, this letter is written for information purposes only, pursuant to 19 CFR 177.1(d)(2) and 177.7(b). Following existing practice, the sample quartz analog watch would be classifiable under item 715.05 - 716.0940 - 720.2800, TSUSA. The watch movements are dutiable at 36 cents for each movement and the watch case is dutiable at 4 cents plus 8.5 percent ad valorem. As discussed above, the watch strap would be separately classifiable under item 791.5400, TSUSA, and the watch battery would be separately classifiable under item 682.9500, TSUSA.

The HTSUSA subheading applicable to the sample quartz analog watch with two movements is 9102.11.45, which provides for "wrist watches, battery powered, whether or not incorporating a stop watch facility: With mechanical display only: Having no jewels or only one jewel in the movement: Other: Other." The watch is dutiable at 40 cents each, plus 8.5 percent on the case, 2.8 percent on the strap, and 5.3 percent on the battery. The provision for 40 cents each is the rate per watch irrespective of the number of watch movements contained in the watch. This classification represents the present position of the Customs Service regarding the dutiable status of the merchandise under the HTSUSA. If there are changes before enactment this advice may not continue to be applicable.

Sincerely,

John Durant, Director

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