The 48th Session of the WCO Harmonized System Committee (HSC) is coming up next month, where member states will get together in Brussels to hash out various classification questions involving tariff interpretation, amendments to the Explanatory Notes and the next round of HS legal text amendments. Agenda items include a reconsideration of prior votes on products containing different levels of sodium sulphate (an issue that has been hanging around since I was attending the HSC!), the reconsideration of the classification of Maritime Multi Display monitors (an issue of particular interest to those following the recent WTO dispute panel decision against the EU on other types of monitors, and for which the last vote on it was deadlocked), the classification of motorcycle parts, dissolution test units, dump truck tires, pharmaceutical drugs, shrimp wonton products and assorted other goodies that different WCO member states find to be challenging, or find other member states classifying goods inconsistently. These issues often arise because different customs administrations or national courts may interpret a particular heading or legal note differently from one another, or may have some other vested interest in a good being classified in a particular provision.
It is similar to when US CBP treats two of the seemingly same good differently because the each operate by different functions, of are made of different materials that may be subject to a particular inclusion or exclusion. This is the case with one of the more seemingly innocuous issues on the HSC’s agenda: the tariff classification of mouse pads.
The issue presented is, in a nutshell, is whether mouse pads should be classified as accessories to computer mice under heading 8473 (accessories of the machines of heading 8471, which covers automatic data processing machines (i.e., computers) and units thereof, like mice) or by constituent material. US CBP has consistently classified mouse pads of any material other than rubber as accessories in 8473 for the last twenty years. But, it has also consistently classified mouse pads deemed to be rubber under subheading 4016.10. See e.g., NY 877399, September 10, 1992; HQ 960129, December 15, 1997; NY C88549, June 10, 1998, NY F85436, April 25, 2000. Most of these rulings contain insufficient justification for classifying the rubber mouse pad outside of heading 8473, except for NY C88549, which states: “This computer mouse pad is composed of cellular natural rubber and has a top layer of PVC. The rubber predominates by both weight and value. Noting Legal Note 1(a) to Section XVI of the HTS, this mouse pad would be precluded from consideration under 8473.”
Note 1(a) to Section XVI (Chs. 84-85) excludes from classification within the section “Transmission, conveyor or elevator belts or belting, of plastics of chapter 39, or of vulcanized rubber (heading 4010); or other articles of a kind used in machinery or mechanical or electrical appliances or for other technical uses, of vulcanized rubber other than hard rubber (heading 4016).” It appears CBP has broadly interpreted “technical uses” in the context of mouse pads. However, it’s not clear that the exclusion was intended to be interpreted so broadly. In explaining the exclusion, the General EN(B) to the Section XVI Notes states that the section includes goods of all materials, but does not cover (in relevant part): “(a) Transmission or conveyor belts or belting, of plastics (Chapter 39); articles of unhardened vulcanised rubber (e.g., transmission or conveyor belts or belting) (heading 40.10), rubber tyres, tubes, etc. (headings 40.11 to 40.13) and washers, etc. (heading 40.16).”
These EN exemplars are quite specific in context, covering either goods specifically provided for outside of Chs. 84 or 85, or those akin to parts of general use. As such, the scope of the exclusion does not clearly extend to mouse pads. They are not akin to these exemplars because they are designed solely or principally for use with ADP mice, and further qualify as accessories because they assist the function of the mice and act directly on the mice. Nevertheless, the exclusion of rubber mouse pads from heading 8473 is a position CBP appears to have taken for the last twenty years, so it’s likely the position it will support at the HSC. But maybe raising this issue will cause CBP to reconsider…
In the meantime, can you think of other examples where the same good may be classified as both a part or accessory and by constituent material, without any substantive modifications to the good itself other than a change in material? Post a comment on our blog or email me directly at firstname.lastname@example.org.