CBP Ruling Asserts Agency Laboratory Reports Take Precedence Over Submitted Ones
For a company to use laboratory reports submitted to CBP to protest the agency's finding on the material composition of an imported good, it must establish a prima facie case sufficient to overcome CBP’s presumption of correctness, CBP said in a Nov. 4 ruling that nonetheless granted an importer's protest based on CBP re-testing.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
The proceeding, HQ 325292, involved Rocket Jewelry Box, which sought to change the Harmonized Tariff Schedule classification of two types of jewelry boxes: flock-covered boxes and paper-covered boxes. The flock-covered jewelry boxes are plastic with an outer surface of flock, while the paper-covered ones are molded plastic covered with paper, according to CBP.
The flock-covered boxes were entered under subheading 4202.92.6010 as jewelry boxes with an outer surface of cotton of a kind normally sold at retail with their contents, while the paper-covered products were entered under subheading 3924.90.5650 as other household articles of plastics.
But CBP's Office of Trade, Trade Regulatory Audit began an audit in September 2019 to determine whether Rocket had properly classified the merchandise. In conducting the audit, the CBP Laboratories and Scientific Services Directorate (LSSD) determined the material composition of the two types of boxes, and the laboratory report found that the flock jewelry box was misclassified because the outer surface was primarily composed of man-made fibers.
CBP reliquidated the entries of flock-covered boxes under subheading 4202.92.9315 as boxes with an outer surface of man-made fibers, dutiable at 17.6% instead of the 6.3% rate declared by Rocket. It also reliquidated the paper-covered boxes under subheading 4202.99.9000.
Rocket conducted its own analysis through an independent laboratory to contest CBP's finding. It said CBP's lab didn't take into account the outer surface of the flock-covered boxes. Subsequently, CBP had its own lab re-test the flock covered boxes, and found they were actually made up of 52% cotton and 48% man-made fibers.
In examining Rocket's protest, CBP affirmed one of two possible classifications Rocket gave for the paper-covered jewelry boxes, saying that, although the paper-covered jewelry boxes are imported without fittings, the subject boxes have characteristics that are suitable for long-term use to store jewelry, so they are properly classified in HTS heading 4202 as jewelry boxes. CBP's laboratory analysis also supports this conclusion, CBP said.
But determining the classification for the flock-covered jewelry boxes was less straightforward. Rocket had produced and submitted an independent laboratory report whose results differed from CBP's initial laboratory report. However, previous CBP rulings dictate that when that independent laboratory report submitted by the importer differs from CBP's report, "the CBP laboratory report cannot be disregarded and thus takes precedence over the independent laboratory report," CBP said.
The laboratory report submitted by Rocket found that the materials composition of the flock-covered jewelry boxes warrant a classification of subheading 4202.92.60 as jewelry boxes with outer surface of cotton, according to the ruling.
However, Rocket "has failed to establish a prima facie case of overcoming the CBP’s presumption of correctness. Although Protestant submitted an independent laboratory report, which disputes CBP’s testing methods and results, there is no evidence that [the independent laboratory report] tested the exact same samples as [CBP's laboratory report]," CBP said.
Rocket also tested a different style of jewelry box than the one tested by CBP, and the independent laboratory report tested bags of flock only, CBP said. "There is no evidence to establish" that the bags of flock "are the exact component of the [CBP-tested] jewelry box. Thus, CBP’s testing methods and results are presumed to be correct."
"Notwithstanding, [CBP's laboratory] did in fact retest the flocking material. ... [and] clarified and consolidated the information concerning the sample first reported ... and determined that the flocking is comprised of 52% cotton and 48% man-made material," CBP continued.
Since the cotton fibers predominate by weight over the man-made fibers, "the subject flock-covered jewelry boxes are classified under subheading 4202.92.6010, HTSUSA, which provides for jewelry boxes with an outer surface of cotton," CBP said, granting the protest.