Details of CBP's Proposed Ruling to Expand Definition of "Cut but Not Set" Gems
In the May 11, 2011 issue of the U.S. Customs and Border Protection Bulletin (Vol. 45, No. 20), CBP published a notice proposing to modify a ruling (HQ H012548), and any other ruling not specifically identified, pertaining to the component definitions of the term "cut but not set" that appears in Chapter 71 of the Harmonized Tariff Schedule.
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(Broker Power previously announced this proposed expansion in a notice on all of CBP's proposed ruling actions in the May 11 Bulletin. Note that BP's notice has been clarified to state that CBP is proposing to modify the definition of "cut but not set" in Chapter 71. The notice previously stated that CBP was proposing to modify the definition of "cut" as it appears in Chapter 71. See ITT's Online Archives or 05/17/11 news, 11051723, for corrected BP summary.)
Comments on Proposed Modification due June 10
CBP states that any party who has received a ruling or decision on the merchandise that is subject to this proposed modification, or any party involved with a substantially identical transaction, should advise CBP by June 10, 2011. Furthermore, CBP states that an importer's failure to advise CBP of such rulings, decisions, or substantially identical transactions may raise issues of reasonable care on the part of the importer or its agents for importations of merchandise subsequent to the effective date of the final decision in this notice.
CBP Previously Ruled "Cutting" and "Polishing" Were 2 Different Processes
In HQ H012548 (dated February 12, 2008), CBP defined the meaning of the phrase "cut but not set" as it pertains to the classification of gemstones under subheading 7103.99.1000. In this ruling, CBP found that the terms “cutting” and “polishing” are not interchangeable, but refer to two different processes in gem manufacturing. CBP defined the term “cutting” as a process in gem manufacturing that creates new facets, angled surfaces, on the gemstone and that the cutting process is time-consuming, requires specialized tools, and demands expert training and craftsman skill levels. CBP excluded “polishing” from the process of “cutting” because it simply smoothes and brightens the surface of a gemstone.
In this ruling, CBP also defined the term “set” to mean “a mount or a base, either permanent or temporary, that holds a stone in place and is a part of the jewelry itself.”
Now Proposes to Expand "Cutting" to Include Polishing, Carving, Tumbling, Etc.
CBP now finds that the definition of “cut” in HQ H012548 is too narrow and is proposing to issue ruling HQ H140915 to expand the definition to conform to its common and commercial meaning. CBP notes that the term “cut” is not defined in the HTS or its corresponding Explanatory Notes. Therefore, the term’s correct meaning is presumed to be its common meaning.
In its previous ruling, CBP stated that the term "cut" is used interchangeably with the terms "fashioning," "girdling," and "bruting". CBP states that further research into the definition of the term “cut” shows that in both lexicographic sources and within the gemstone industry, the term is interpreted more broadly than as defined in HQ H012548. CBP finds that the term “cutting,” also called "fashioning," is a process whose application distinguishes the resulting gemstones from rough stones (i.e., stones which are unworked or simply sawn or roughly shaped).
Therefore, the term "cutting" can involve one or more of the following processes: carving, cleaving, sawing, girdling, bruting, grinding, faceting, polishing, cabbing, and tumbling.
CBP finds its definition of the term "set" in its previous ruling remains consistent with its common and commercial meaning, and is not proposing to modify its definition.
(See ITT's Online Archives or 05/16/11 news, 11051603, for BP summary of the May 11 CBP Bulletin's three notices on ruling revocations.)
CBP Contact -- Tamar Anolic (202) 325-0036