HTS Classification Update Does GRI 3(c) Fit?...2014 Ruling – MiCoach Tracker HQ H246726, dated June 23, 2014 Article is an LCD watch a flash memory, GPS sensor, heart rate monitor,

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HTS Classification Update

Does GRI 3(c) Fit?

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Bruce Leeds www.braumillerlaw.com


Agenda   What is GRI 3(c)?   How do you classify a Fitbit?   2002 Ruling - Watch & MP3 Player   2002 Ruling – Watch & Remote   2009 Ruling – Fitbit Tracker   2012 Ruling – Fitness Tracker   2014 Ruling – Fitness Monitor   2014 Ruling – MiCoach Tracker   2015 Ruling – Watch Monitor   So – How Do You Classify a Fitbit?

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What is GRI 3(c)?   General Rule of Interpretation 3(c) is sort of the

ultimate HTS classification “tie breaker”   If an article cannot be classified using GRI 1,

GRI 2(a) or 2(b), or GRI 3(a) or (b), classification is done under the rule in GRI 3(c)   “When goods cannot be classified by reference

to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration”

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What is GRI 3(c)?   How GRI 3(c) works:

• See if there is a specific classification for a composite article o Example: First Aid Kits

• Apply GRI 2. Note GRI 2(b) states that “the classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3”

• Determine if the rules in GRI 3(a) & (b) apply

• If none of these work classify the different components or functions in the article

• Pick the HTS with the highest number 4


How Do You Classify a Fitbit?   What is a Fitbit™?   It is a band you wear on your wrist that may

incorporate several functions: • Watch

• Heart rate

• Activity tracker

• Caller ID

• GPS

• Music control

• Calories burned

• Steps walked or run 5


Pictures of Fitbits™

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There are also other companies that sell products similar to the official Fitbit™


How Do You Classify a Fitbit?   Is there a specific classification for the Fitbit?

• Is it a watch? No – it is more than a watch • GRI 2 does not apply due to note mentioned • Is there a heading with the most specific description per GRI 3(a)? A watch? (No per CBP)

• Is it a composite good per GRI 3(b)? Yes. Does any component or function constitute the essential character? (No per CBP)

• How do you classify this thing? Let’s look at some rulings

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2002 Ruling - Watch & MP3 Player   HQ 964372, July 17, 2002

  Article is an MP3 recorder/player wristwatch, including wristwatch band, USB cable, owner’s manual, CD software, battery, interface/charger, earphone, and earphone attachment, packaged together and advertised for retail sale

  CBP ruled that the MP3 player/recorder (and not the timekeeping) was the essential character of the watch and classified it under 8520.90.00 (now 8521.90.00)

  The entire combination was determined to be a set put up for retail sale and was classified according to the component that gave the whole its essential character under GRI 3(b) under 8520.90.00 – the classification of the MP3 player

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2002 Ruling – Watch & Remote

  HQ 965417, dated July 29, 2002   Product consists of a watch with remote control

function buttons for television, VCR, and cable boxes. Can control on/off, volume etc.   Ruling said that classification was governed by

GRI 3(b) and that the remote control function formed the essential character of the device   The watch/remote control was classified as an

electric control under 8537.10.90

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2009 Ruling – Fitbit Tracker

  N068636, dated August 12, 2009   Product made to fit in hand or attach to belt.

Tracks exercise intensity levels, calories burned, sleep quality, steps and distance. Calories, steps, and distance traveled are displayed on a blue Organic LED display. Wireless transmission to base station   Shipped & sold in one package with base station,

holster and wrist band   CBP considers it a composite good

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2009 Ruling – Fitbit Tracker (2)

  CBP says that classification is per GRI 3(c)   Each of the primary components was classified

separately. HTS 9031.80.8085 – the classification for the built-in accelerometer – applied to the entire set   The separate components if imported separately

would fall under their own classifications; otherwise they go under 9031.80.8085 due to GRS 3(c)

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2012 Ruling – Fitness Tracker

  N209995, dated March 30, 2012   Used to monitor daily physical activities – steps

taken, distance traveled, calories burned. Includes time measurement. Clipped on wrist or belt. One model is Bluetooth enabled   Cited previous ruling. Although GRI 3(c) not

cited, classification was under 9031.80.8085 – the HTS for the built-in accelerometer

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2014 Ruling – Fitness Monitor

  N252454, dated April 28, 2014   Product was a gym smart™ cardio chest belt –

a heart rate monitoring system that attaches to chest and transmits info to equipment, smart phone or wrist watch   Contains contacts, belt and transmitter   Although not mentioned, classification was by

the component that had the highest numerical HTS classification per GRI 3(c)

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2014 Ruling – MiCoach Tracker

  HQ H246726, dated June 23, 2014   Article is an LCD watch a flash memory, GPS

sensor, heart rate monitor, blood flow sensor, accelerometer, and transmitter. The time displays for 2 seconds then dims   Ruling cited the prior watch/remote ruling and

the US Circuit Court of Appeals ruling in LaCrosse Tech v. United States (dealing with a clock and meteorological instrument) that the watch function was subsidiary

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2014 Ruling – MiCoach Tracker (2)

  It was not possible to state that any component

constituted the essential character per GRI 3(b)   CBP said that classification is per GRI 3(c) in

the last HTS in numerical order   The components (not including the watch) were

separately classified and the whole was classified under 9031.80.8085 – the classification of the accelerometer

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2015 Ruling – Watch Monitor

  N267981, dated September 21, 2015   Product is a Crane Bluetooth GPS-watch. It

contains GPS receiver, Bluetooth transmitter, and displays training time, lap time, pace, heart rate, training zone alarm, calorie expenditure, altitude, latitude and longitude   It does not contain an accelerometer   It works with a separate strap-on heart rate

monitor

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2015 Ruling – Watch Monitor (2)

  Although not cited in the ruling, the

classification of the watch took place under the rule in GRI 3(c). Classification was under 8526.91.0040 as radio navigational aid apparatus. The watch function was obviously considered subordinate and not considered   The separate heart rate monitor was classified

separately

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So – How Do You Classify a Fitbit (and similar products)?

  Classification is likely under GRI 3(c)   Even though it may contain a time display the

watch function is a subsidiary feature and not considered   Need to identify all the major components and

features of the product: Bluetooth, GPS, monitor, accelerometer, bracelet, sensors   Does any of these predominate so that it could

be considered the essential character? (Probably not)

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So – How Do You Classify a Fitbit (and similar products)?

  Classify each of the functions and components   Choose the one with the highest number   If in a retail set with other items (base station,

straps, box, etc.) the entire set goes under one HTS classification   (Lawyer hat time) If there is any doubt go get a

ruling from CBP

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Piece of Cake!

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Takeaways   To get to GRI 3(c) you have to eliminate the

other GRIs first   CBP is not inclined to use GRI 3(c) if it results in

a lower duty rate   It is essential to identify all the functions and

components in the product so you can classify them all   Is the article in a set put up for retail sale? If yes

one classification will apply to all

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Questions?

Thank you!! Bruce Leeds

Braumiller Law Group, PLLC 5200 Spring Valley Road, Suite 200

Dallas, TX 75254 (214) 348-9306

www.braumillerlaw.com

Documents

HTS Classification Update Does GRI 3(c) Fit?...2014 Ruling – MiCoach Tracker HQ H246726, dated June 23, 2014 Article is an LCD watch a flash memory, GPS sensor, heart rate monitor,