CBP Ruling H092455

HQ H092455 December 3, 2010 CLA-2 OT:RR:CTF:TCM H092455 ASM CATEGORY: Classification TARIFF NO.: 3212.10.00 Port Director U.S. Customs and Border Protection John F. Kennedy International Airport Building #77 Jamaica, NY 11430 Attention: Chief, Trade Operations Branch RE: Application for Further Review of Protest No. 4701-09-100632; Tariff Classification of Hologram Foils Dear Port Director: This is in reference to the Application for Further Review (AFR) of Protest No. 4701-09-100632, filed on behalf of the importer, Kurz Transfer Products, LP (Protestant), regarding the classification of certain hologram foils under the Harmonized Tariff Schedule of the United States (HTSUS). A sample of the subject article was examined by U.S. Customs and Border Protection (CBP). FACTS: The subject merchandise, identified as hologram foils, are a thin sheets used to transfer a security hologram onto a credit card. The hologram foils consist of a polyester carrier film (which includes a transfer layer and a protective varnish layer), a "deco layer" which contains the embossed metallic hologram, and a heat bonding layer. The deco layer is transferred to another surface by means of heat and pressure. The carrier film is discarded after the image has been transferred. The importer's literature describes the following methods used to transfer the hologram onto a credit card: * The roll-on stamping method consists of a heated hot stamping wheel which activates the release during the stamping or transfer process. The hot stamping foil is pressed permanently onto the substrate in a continuous roll-on movement. The polyester carrier is peeled off after cooling; or * During the up-and-down stamping process the foil is transferred to the substrate by means of a heated metal or silicone die with an intermittent up-and-down movement. The shape of the die determines the shape of the stamping. Up-and-down stamping is among others suitable for the high precision, perfectly defined application of single hologram images. The subject protest and AFR concern twenty-one entries of hologram foils entered on various dates between February 29, 2008, and February 25, 2009, under subheading 4908.90.00, HTSUS, which provides for "Transfers (decalcomanias): Other". CBP liquidated the entries on various dates between February 27 and June 19, 2009, under subheading 3212.10.00, HTSUS, which provides, in relevant part, for "Stamping foils ...: Stamping foils." Protestant filed a protest and AFR on June 22, 2009, alleging that it had received conflicting classification determinations from CBP on the subject merchandise. ISSUE: What is the proper classification for the merchandise? LAW AND ANALYSIS: The protest was properly filed under 19 U.S.C. §1514(a)(2) as a decision on classification. The protest was timely filed, within 180 days of liquidation for entries made on or after December 18, 2004. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2)(B)(ii), (iii) (codified as amended at 19 U.S.C. § 1514(c)(3) (2006)). Further Review of Protest No. 2904-06-10031 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(a), because the decision against which the protest was filed is alleged to be inconsistent with a decision made at another port with regard to the same merchandise. Specifically, Protestant alleges that your port's decision to liquidate the merchandise under subheading 3212.10.00, HTSUS, is inconsistent with the Port of Chicago's liquidation of five entries of the same hologram foils under subheading 4908.90.00, HTSUS. Classification under the Harmonized Tariff Schedule of the United States (HTSUS) is made in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI may then be applied. Note 6 to Chapter 32, HTSUS, provides: The expression "stamping foils" in heading 3212 applies only to thin sheets of a kind used for printing, for example, book covers or hat bands, and consisting of- (a) Metallic powder (including powder of precious metal) or pigment, agglomerated with glue, gelatin or other binder; or (b) Metal (including precious metal) or pigment, deposited on a supporting sheet of any material. The following provisions of the HTSUS are under consideration: 3212 Pigments (including metallic powders and flakes) dispersed in nonaqueous media, in liquid or paste form, of a kind used in the manufacture of paints (including enamels); stamping foils; dyes and other coloring matter put up in forms or packings for retail sale: 3212.10.00 Stamping foils * * * 4908 Transfers (decalcomanias): 4908.90.00 Other The Harmonized Commodity Description and Coding System Explanatory Notes ("ENs") constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). EN 31.12 provides, in relevant part: (B) STAMPING FOILS These products (also known as blocking foils) consist of thin sheets of either: (1) Metallic powder (including powder of precious metal), or pigment, agglomerated with glue, gelatin or other binder, or (2) Metal (including precious metal) or pigment, deposited by vaporisation, cathodic sputtering, etc., on a supporting sheet of any material (e.g., paper, plastics). They are used, with the application of pressure (and generally of heat), for printing book covers, hat bands, etc., by hand or machine. EN 49.08 provides, in relevant part: Transfers (decalcomanias) consist of pictures, designs or lettering in single or multiple colours, lithographed or otherwise printed on absorbent, lightweight paper (or sometimes thin transparent sheeting of plastics), coated with a preparation, such as of starch and gum, to receive the imprint which is itself coated with an adhesive. This paper is often backed with a supporting paper of heavier quality. The designs are sometimes printed against a background of metal leaf. When the printed paper is moistened and applied with slight pressure to a permanent surface (e.g., glass, pottery, wood, metal, stone or paper), the coating printed with the picture, etc., is transferred to the permanent surface. This heading also covers vitrifiable transfers, i.e. transfers printed with vitrifiable preparations of heading 32.07. Transfers may be used for decoration or utility purposes, e.g., for decorating pottery or glass, or for marking various articles such as vehicles, machines and instruments. ... The heading also excludes transfer paper of the types known as stamping foils or blocking foils, prepared with a coating of metal, metal powder or pigment, and used for printing book covers, hat bands, etc. (heading 32.12). Other transfer papers, as used in lithographic work, fall in heading 48.09 or 48.16 as appropriate. Relying on the common meaning of the term, CBP has previously defined the term "decalcomania" as "the art of process of transferring pictures and designs from specially prepared paper (as to glass)." See Headquarters Ruling Letter (HQ) 965703, dated August 13, 2002 (citing the Merriam-Webster's Collegiate Dictionary, 10th ed). EN 49.08 adds that the imprint on the specially-prepared paper is coated with an adhesive and is often backed with a supporting paper of heavier quality. With regard to the transfer process, EN 49.08 explains that "[w]hen the printed paper is moistened and applied with slight pressure to a permanent surface (e.g., glass, pottery, wood, metal, stone or paper), the coating printed with the picture, etc., is transferred to the permanent surface." The hologram foils at issue are not decals of the type classified in heading 4908, HTSUS, because they are not coated with an adhesive and thus, will not stick to another surface when moistened and applied with slight pressure. They are also not vitrifiable transfers (i.e., transfers printed with vitrifiable preparations of heading 32.07). See EN 49.08. Note 6(b) to Chapter 32, HTSUS, provides that the "stamping foils" of heading 3212, HTSUS "... applies only to thin sheets of a kind used for printing, for example, book covers or hat bands, and consisting of ... [m]etal (including precious metal) or pigment, deposited on a supporting sheet of any material." See also EN 31.12(B). The hologram foils at issue are thin sheets used to transfer the metallic hologram image deposited in them to a credit card when heat and pressure are applied. As such, they are classifiable under heading 3212, HTSUS, as stamping foils. CBP has classified similar merchandise under heading 3212, HTSUS, as stamping foils. See New York Ruling Letter (NY) L88019, dated October 31, 2005 (hot stamp foil used in thermal printing to transfer a printed image onto media classified in subheading 3212.10.00, HTSUS) and NY 887075, dated July 6, 1993 (polyester-based stamping foils used to transfer images onto pencils, furniture, trophies, and business cards, classified in subheading 3212.10.00, HTSUS). Our determination is also consistent with EN 49.08 which provides that "the heading also excludes transfer paper of the types known as stamping foils or blocking foils, prepared with a coating of metal, metal powder or pigment, and used for printing book covers, hat bands, etc. (heading 32.12)." HOLDING: By application of GRI 1, the hologram foils are correctly classified in subheading 3212.10.00, HTSUS, as "[S]tamping foils...: Stamping foils." The column one, general rate of duty at the time of entry was 4.7 percent ad valorem. You are instructed to DENY the protest. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision, the Office International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division 5