December 22, 2009
TARIFF NO.: 7108.20.0000
Raymond Nessim, CEO Manfra, Tordella & Brookes, Inc.
PAMP Swiss 90 Broad Street New York, NY 10004
RE: The tariff classification of "gold coin blanks" from Switzerland.
Dear Mr. Nessim:
In your letter dated November 30, 2009, you requested a tariff classification ruling.
The merchandise is described as American Eagle 22k gold coin blanks and American Buffalo 24k gold coin blanks for the United States Mint. Multiple steps are described in the manufacture of these blanks, also known as (aka) planchets and flans. These multiple steps are as follows:
Step – 1: is the melting of both precious and non-precious metals (gold alloys) to obtain a metal composition of 91.67% or 99.99%. The melting process takes place in the Foundry Division at PAMP by a continuous casting furnace, resulting in the production of raw bars of fine metal or alloyed metals.
Step – 2: is the cutting and laminating of the continuous cast bar. Raw strips, supplied by the Foundry Division are laminated in the milling station by stainless-steel rollers. The strips are laminated to exact gauge indicated in the United States Mint’s technical specifications. Following the control of the gauge throughout the length and width of the strip in its hardened condition, a process of water based solution is used to clean both sides of the strips for further handling throughout the blank process.
Step – 3: is the punching out of the raw blanks from the cleaned strip by means of a standard press equipped with punching tools to size specifications as indicated in the United States Mint’s Technical Specifications. These raw cut blanks will be separated from the strip and collected in barrels for further laboratory tests and mechanical operations.
Step – 4: is the annealing of blanks in a belt furnace that transforms the molecules of the metal back to a softer condition. Annealing is the process to obtain a defined standard hardness so that the United States Mint can strike the raw blanks without damaging their minting dies and collars for the production of legal tender bullion coins.
Step – 5: is the use of a "Schuler Rimming Machine" that is equipped with a stainless steel tool which provides an upsetting profile to the raw cut blanks. This operation is standard procedure to avoid that the blanks stick to each other during the burnishing, washing and drying process.
Step – 6: is the decreasing and washing of the blanks by a stainless steel burnishing treatment. Following the drying by warm temperature airflow, the raw degreased blanks are bulk packed and sent to the United States Mint for finishing processes and minting. It is only after the blanks, aka planchets, are stuck by the Mint dies that they become legal tender coins.
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 GRIs, 2 through 6, may be applied in order.
GRI 2 (a) reads: Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the HTSUS. While not 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 at the international level. See T.D. 89-80, 54 Fed. Reg. 35127 (Aug. 23, 1989).
Rule 2 (a) is further discussed and elaborated upon in the ENs to the HTSUS. The ENs to Rule 2 (a), incomplete and unfinished articles state:
(I) The first part of Rule 2 (a) extends the scope of any heading which refers to a particular article to cover not only the complete article but also that article incomplete or unfinished, provided that, as presented, it has the essential character of the complete or finished article.
(II) The provisions of this Rule also apply to blanks unless these are specified in a particular heading. The term "blank" means an article, not ready for direct use, having the approximate shape or outline of the finished article or part, and which can only be used, other than in exceptional cases, for completion into the finished article or part (e.g., bottle preforms of plastics being intermediate products having tubular shape, with one closed end and one open end threaded to secure a screw type closure, the portion below the threaded end being intended to be expanded to a desired size and shape).
Semi manufactures not yet having the essential shape of the finished articles (such as is generally the case with bars, discs, tubes, etc.) are not regarded as "blanks".
We agree that the 22k American Eagle and 24k American Buffalo are blanks, in accordance with the ENs to Rule 2 (a) (II), in that the blanks have the essential size and shape of the finished coins, and are processed to exacting standards as provided by the Mint’s technical specifications.
It has been suggested that the gold coin blanks have the essential character of "Coin" classifiable in heading 7118 of the HTSUS. Headquarters Ruling, HQ 084219 dated July 7, 1989, aluminum blanks for computer memory discs, not having a magnetic coating on the surface of the discs, were found not to be eligible for classification in heading 8523 of the HTSUS, as the provision provided for prepared unrecorded media. In similar fashion, the gold coin blanks are not struck, prior to import, by the Mint’s dies, thereby failing to obtain the status of legal tender coin which is necessary for classification in heading 7118 of the HTSUS.
HTSUS subheading 7108.20.0000 "Monetary" is a provision for gold in semi-manufactured forms. The term "monetary" is not defined in the text of the HTSUS, nor the ENs to HTSUS, of heading 7108. When terms are not defined, they are construed in accordance with their common and commercial meaning – Nippon Kogasku (USA), Inc. v. United States, 69 CCPA 89, 673 F.2d 380 (1982). Common and commercial meaning may be determined by consulting dictionaries, lexicons, scientific authorities and other reliable sources. C.J. Tower & Sons v. United States, 69 CCPA 128, 673 F.2d 1268 (1982).
In consultation with the online Oxford English Dictionary, the meaning for "monetary" states "Of or relating to coinage or currency." Further reference for the meaning of coinage and coining, provides, that coinage is the action or process of coining money, and coining is the making of coin; minting. With case in point, the gold coin blanks meet the definition of "monetary" and are classifiable in subheading 7108.20.0000 of the HTSUS. The applicable subheading for the gold coin blanks, will be 7108.20.0000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for "Gold (including gold plated with platinum) unwrought or in semimanufactured forms, or in powder form: Monetary." The rate of duty will be free.
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 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 Neil H. Levy at (646) 733-3036.
Sincerely, Robert B. Swierupski Director National Commodity Specialist Division