Aug 24 CBP Bulletin Action Expands Definition of "Cut but Not Set" Gems
In the August 24, 2011 issue of the U.S. Customs and Border Protection Bulletin (Vol. 45, No. 35), CBP published a notice on its modification of a ruling and similar treatment pertaining to the definition of “cut” in the term "cut but not set" as it is used in Chapter 71 of the Harmonized Tariff Schedule.
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Modification Is Effective October 24
This modification is effective for the listed ruling, as well as any treatment CBP has previously accorded to substantially identical transactions, for merchandise entered or withdrawn from warehouse for consumption on or after October 24, 2011.
CBP Previously Ruled Definition of "Cut" Did Not Include "Polishing" Process
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 7103.99.10. In that ruling, CBP found that the terms "cut" and "polishing" are not interchangeable, but refer to two different processes in gem manufacturing.
CBP had defined "cut" to mean a process in gem manufacturing that creates new facets, or angled surfaces, on the gemstone. CBP excluded "polishing" from the "cut" process because it stated that polishing simply smoothes and brightens the surface of a gemstone.
Now Finds “Cut” Includes Polishing, Carving, Faceting, Etc.
CBP now finds that its definition of "cut" in HQ H012548 is partly in error as it is too narrow. As the term "cut" is not defined in Chapter 71 or its corresponding Explanatory Notes, the term’s correct meaning is presumed to be its common meaning.
Accordingly, CBP has issued new ruling HQ H140915 to broaden the definition of "cut" in accordance with its common and commercial meaning. As a result, "cut" in the term "cut but not set" can involve one or more of the following processes: carving, cleaving, sawing, girdling, bruting, grinding, faceting, polishing, cabbing, and tumbling.
Chapter 71 Gems May be "Cut but Not Set" According to New “Cut” Definition
Therefore, HQ H012548 is modified and gemstones classifiable under subheading 7103.99.10, may be "cut" i.e., a process whose application distinguishes the resulting gemstones from rough stones (i.e., stones which are unworked or simply sawn or roughly shaped) and which involves one or more of the following processes: carving, cleaving, sawing, girdling, bruting, grinding, faceting, polishing, cabbing, and tumbling.
(Note that for this subheading, the gemstones cannot be "set," i.e., held in place by a mount or a base that forms a part of the jewelry itself.)
CBP Contact -- Tamar Anolic (202) 325-0036
(See ITT's Online Archives or 05/20/11 news, 11052007, for BP summary of the proposed modification of this ruling.)