The tariff classification of a Prototype Emergency Ship-Arrest Para Sea Anchor from New Zealand

N264035 May 12, 2015 CLA-2-98:OT:RR:NC:N3:351 CATEGORY: Classification TARIFF NO.: 9817.85.01; 6307.90.9889 Mr. Peter Soles The Glosten Associates 1201 Western Avenue, Suite 200 Seattle, WA 98101-2953 RE: The tariff classification of a Prototype Emergency Ship-Arrest Para Sea Anchor from New Zealand Dear Mr. Soles: In your letter dated April 7, 2015 you requested a tariff classification ruling on behalf of your client, Alaska Maritime Prevention and Response Network (AMPRN). During a subsequent telephone conversation, you clarified your request and indicated that you are seeking both confirmation that the item at issue may be classified as a prototype and the classification of the item if imported in commercial quantities and sold after importation. Your letter states The Gloston Associates is a naval architecture, marine engineering and ocean engineering consulting firm contracted to develop a para sea anchor (PSA) for deployment on large ocean-going vessels to mitigate the risk of oil spills and other marine casualties. The Emergency Ship-Arrest Para Sea Anchor (PSA) is a prototype developed for use on vessels that have lost power and is intended to prevent vessel groundings, improve the probability of successful vessel recovery and increase the window of opportunity for a successful vessel repair or casualty response by slowing the drift of the vessel and aligning the vessel into the direction of the wind. A graphical representation of the PSA in use depicts a parachutic canopy constructed of high strength nylon with an acrylic coating attached to an ocean vessel by a main rode of polyethylene fiber rope and webbing. The canopy is designed to deploy underwater and provide the vessel a hydrodynamic drag. The top of the canopy is attached by a dropline of polypropylene to a buoy made of polyvinyl chloride (PVC) and thermoplastic polyurethane (TPU). A recovery line designed to float on the surface of the water is also attached to the buoy. The completed prototype is projected to weigh 3,655 pounds. You state that a (singular) preliminary prototype is currently under production in New Zealand and will be used for performance testing (sea trials) and data validation inside the United States. Pursuant to section 1433 of the Product Development and Testing Act of 2000 (PDTA), enacted as part of the Tariff Suspension and Trade Act of 2000 (Pub.L. 106-476, § 1433), articles described as “prototypes” under the Act may be imported duty-free. To provide for duty-free entry of prototypes section 1433 of the PDTA inserted heading 9817.85.01 into Subchapter XVII of Chapter 98, HTSUS, which provides for “Prototypes to be used exclusively for development, testing, product evaluation, or quality control purposes.” U.S. Note 7 to Subchapter XVII, Chapter 98, HTSUS, provides, in relevant part:The following provisions apply to heading 9817.85.01: (a) For the purposes of the subchapter, including heading 9817.85.01, the term “prototypes” means originals or models of articles that –  (i) are either in the preproduction, production, or postproduction stage and are to be used exclusively for development, testing, product evaluation, or quality control purposes[.] …. (b) (i) Prototypes may be imported only in limited noncommercial quantities in accordance with industry practice. (ii) Except as provided for the Secretary of the Treasury, prototypes or parts of prototypes may not be sold after importation into the United States or be incorporated into any other products that are sold. (c) Articles subject to quantitative restrictions, antidumping orders, or countervailing duty orders may not be classified as prototypes under this note. Articles subject to licensing requirements, or which must comply with laws, rules, or regulations administered by agencies other than the United States Customs Service before being imported, may be classified as prototypes if they comply with all applicable provisions of law and otherwise meet the definition of “prototypes” under paragraph (a). Based on the information provided, this office believes the (singular) prototype Emergency Ship-Arrest Para Sea Anchor meets the definition of U.S. Note 7 to Subchapter XVII, Chapter 98, HTSUS. The applicable subheading for the prototype Emergency Ship-Arrest Para Sea Anchor will be 9817.85.01, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Prototypes to be used exclusively for development, testing, product evaluation, or quality control purposes.” The rate of duty will be Free. The PSA is composed of different components and is considered a composite good. The Explanatory Notes to GRI 3 (b) (VIII) state that the factor which determines essential character will vary between different kinds of goods. It may, for example, be determined by the nature of the materials or components, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods. When the essential character of a composite good can be determined, the whole product is classified as if it consisted only of the part that imparts the essential character to the composite good. In this case, the canopy imparts the essential character of the PSA. The applicable subheading for the Emergency Ship-Arrest Para Sea Anchor, if imported in commercial quantities to be sold after importation, will be 6307.90.9889, HTSUS, which provides for “Other made up articles, including dress patterns: Other: Other: Other: Other: Other.” The rate of duty will be 7 percent ad valorem. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at http://www.usitc.gov/tata/hts/. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Kim Wachtel at kimberly.a.wachtel@cbp.dhs.gov. Sincerely, Gwenn Klein Kirschner Director National Commodity Specialist Division