CBP Seeks Comments on 19 USC 1516 Petition to Reclassify Wickless Wax Objects as Candles to Prevent AD Circumvention
U.S. Customs and Border Protection has received a petition submitted under 19 USC 1516 on behalf of a domestic party, the National Candle Association, requesting reclassification under the Harmonized Tariff Schedule of certain wickless wax objects.
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Before making a determination on this matter, CBP invites comments by March 8, 2010.
Currently, these wickless wax objects are classified as ''molded or carved articles of wax'' under HTS 9602.00.40 (duty-free). However, the petitioner contends that the proper classification for these objects is HTS 3406.00.00 (duty-free, but subject to antidumping (AD) duties if from China1), as "unfinished candles."
Petitioner Claims Importers Using Classification to Circumvent AD Duties on Candles from China
While the 2009 duty rates of both these subheadings is free, the petitioner claims that the importers of these products are using this classification as a means of circumventing the AD order on petroleum wax candles from China.
To support its claim, the petitioner points to a circumvention order issued in 2007 on wickless wax forms from China found to be circumventing the AD order on petroleum wax candles from China and to samples of candles with easily removed wicks, which they believe indicate the wicks were inserted into drilled holes in the wax after importation into the U.S. in order to avoid the AD duties.
Petitioners contend that the wickless wax forms should be classified as unfinished candles in HTS 3406.00.00, so as to make circumvention of the AD duties difficult.
CBP Has Historically Classified Wickless Wax Objects under HTS 9602.00.40 as It Fully Describes Them
Historically, CBP has classified these wickless wax objects in HTS 9602.00.40, as molded or carved articles of wax because it concluded that the terms of HTS heading 9602 completely describe the subject goods (thus meeting the requirements of General Rule of Interpretation 1 (GRI 1)).
CBP has also historically maintained that these objects are not classifiable as wax in its primary form and are not classifiable as unfinished candles in HTS heading 3406 because they do not meet the common definition of a candle, which is a source of illumination composed of a wick surrounded by wax.
Petitioner Argues Objects Should be Classified in HTS 3406.00.00 as Have Essential Character of Candles
In support of its classification argument, the petitioner refers to the Explanatory Note for HTS heading 9602, which states ''moulded articles means articles which have been moulded to a shape appropriate to their intended use. On the other hand, materials moulded in the shape of blocks, cubes, plates, bars, sticks, etc., whether or not impressed during moulding, are not included.'' The petitioner asserts that the exclusionary language of this note prevents the classification of these objects in HTS heading 9602, by application of GRI 1, thus requiring the application of GRIs 2 or 3.
Accordingly, the petitioner states that the wax objects should be classified in HTS heading 3406, by application of either GRI 2(a) or 3(a) as the wax objects are unfinished candles, or blanks, that have the essential character of a candle. According to the petitioner, the wax objects provide the finished candle with the shape, color, and size of the finished product and that most consumers identify candles based on these characteristics.
Alternatively, the petitioner argues that the wax objects are unassembled candles by application of GRI 2(a) or in a third alternative argument, are prima facie classifiable in both HTS headings 3406 and 9602, but as heading 3406 is more specific, should be classified under it, by application of GRI 3(a).
1The AD cash deposit rate for the most recent period of review (Aug. 1, 2005 to July 31, 2006) for petroleum wax candles from China for companies not receiving a separate rate was 108.30%. (See ITT's Online Archives or 09/14/07 news, 07091435, for BP summary.)
CBP contact - Jean-Rene Broussard (202) 325-0284
CBP notice (D/N USCBP-2009-0036, FR Pub 01/05/10) available at http://edocket.access.gpo.gov/2010/pdf/E9-31352.pdf