The Classification of Merchandise by the U.S. Customs and Border Protection is Important

Apple filed suit against the U.S. in the U.S. Court of International Trade in which Apple challenged U.S. Customs and Border Protection’s classification of Apple’s iPad 2 Smart Cover under the Harmonized Tariff Schedule of the United States (“HTSUS”) Subheading 6307.90.98.  Apple, Inc. v. United States, 375 F. Supp. 3d 1288 (Ct. Int’l Trade 2019).  Apple and the United States filed cross-motions for summary judgment, with Apple contending that its subject merchandise is properly classified under Subheading 8473.30.51 duty free, and the United States contending that Apple’s subject merchandise is properly classified under Subheading 3926.90.99, at a duty rate of 5.3 percent ad valorem.  The U.S. Court of Appeals for the Federal Circuit affirmed the decision by the Court of International Trade that the subject merchandise was properly classified.

By way of background, this suit is in connection with a single entry of merchandise made by Apple at the port of San Francisco International Airport.  The entry consisted of two models of the Smart Cover, which “differ[ed] as to their outer layer:” one was made of leather and the other was “composed of plastic.”  Apple, 375 F. Supp. 3d at 1295.  Because U.S. Customs and Border Protection had liquefied the leather Smart Covers duty-free, the Court of International Trade held that Apple had not suffered an injury or harm that the CIT’s order could redress, thereby holding that Apple did not have standing to challenge the Customs’ classification of the leather Smart Covers as duty-free.  Accordingly, the issue in the present case remained the classification of the Smart Cover with plastic outer layer. 

The classification of merchandise involves a two-step inquiry.  ADC Telecomms., Inc. v. United States, 916 F.3d 1013, 1017 (Fed. Cir. 2019). First, we “determin[e] the proper meaning” of the terms within the relevant tariff pro-vision, “which is a question of law,” and, second, we determine whether the subject merchandise “falls within” those terms, “which is a question of fact.” Sigma-Tau Health Sci., Inc. v. United States, 838 F.3d 1272, 1276 (Fed. Cir. 2016).

The HTSUS governs the classification of merchandise imported into the United States. See Wilton Indus., Inc. v. United States, 741 F.3d 1263, 1266 (Fed. Cir. 2013). The HTSUS is “considered . . . [a] statutory provision[] of law for all purposes.” 19 U.S.C. § 3004(c)(1); see Chemtall, Inc. v. United States, 878 F.3d 1012, 1026 (Fed. Cir. 2017) (explaining that “the tenth-digit statistical suffixes . . . are not statutory,” as those suffixes are not incorporated in the HTSUS’s legal text). “The HTSUS scheme is organized by headings, each of which has one or more subheadings; the headings set forth general categories of merchandise, and the subheadings provide a more particularized segregation of the goods within each category.” Wilton Indus., 741 F.3d at 1266. “The first four digits of an HTSUS provision constitute the heading, whereas the remaining digits reflect subheadings.” Schlumberger, 845 F.3d at 1163 n.4. “[T]he headings and subheadings . . . are enumerated in chapters 1 through 99 of the HTSUS (each of which has its own section and chapter notes)[.]” R.T. Foods, Inc. v. United States, 757 F.3d 1349, 1353 (Fed. Cir. 2014). There are two types of HTSUS headings, “eo nomine [and] use provisions.” Schlumberger, 845 F.3d at 1164. “[A]n eo nomine provision . . . describes an article by a specific name.” CamelBak Prods., LLC v. United States, 649 F.3d 1361, 1364 (Fed. Cir. 2011) (citation omitted). A use provision describes an article by its principal or actual use. See Aromont USA, Inc. v. United States, 671 F.3d 1310, 1313 (Fed. Cir. 2012).

The HTSUS “contains the ‘General Notes,’ the ‘General Rules of Interpretation’ (‘GRI’), the ‘Additional [U.S.] Rules of Interpretation’ (‘ARI’), and various appendices for particular categories of goods.” R.T. Foods, 757 F.3d at 1353 (footnote omitted). The GRI and ARI govern the classification of goods within the HTSUS. See Otter Prods., 834 F.3d at 1375. The GRI “govern the proper classification of all merchandise[.]” Carl Zeiss, Inc. v. United States, 195 F.3d 1375, 1379 (Fed. Cir. 1999). The ARI are specific to use provisions. See Schlumberger, 845 F.3d at 1163 n.5 (ex-plaining that the ARI do not apply to eo nomine provisions).

The GRI “apply in numerical order, meaning that subsequent rules are inapplicable if a preceding rule provides proper classification.”  Id. at 1163.  GRI 1 provides, in relevant part, that “classification shall be determined according to the terms of the headings and any relative section or chapter notes.”  GRI 1.  “Under GRI 1, [the Court] first construe[d] the language of the heading, and any section or chapter notes in question, to determine whether the product at issue is classifiable under the heading.” Schlumberger, 845 F.3d at 1163 (internal quotation marks and citation omit-ted). “[T]he possible headings are to be evaluated without reference to their subheadings, which cannot be used to expand the scope of their respective headings.” R.T. Foods, 757 F.3d at 1353 (citations omitted). “Absent contrary legislative intent, HTSUS terms are to be construed according to their common and commercial meanings, which are presumed to be the same.” Well Luck Co. v. United States, 887 F.3d 1106, 1111 (Fed. Cir. 2018) (internal quotation marks and citation omitted). “To discern the common meaning of a tariff term, the Court may consult dictionaries, scientific authorities, and other reliable information sources.” Kahrs Int’l, Inc. v. United States, 713 F.3d 640, 644 (Fed. Cir. 2013) (citation omitted). The Court may also consider the relevant Explanatory Notes (“EN”). See Fuji Am. Corp. v. United States, 519 F.3d 1355, 1357 (Fed. Cir. 2008). “The [E]xplanatory [N]otes provide persuasive guidance and are generally indicative of the proper interpretation, though they do not constitute binding authority.” Chemtall, 878 F.3d at 1019 (internal quotation marks and citation omitted).

GRI 3 provides guidance when “goods are, prima facie, classifiable under two or more headings.” GRI 3.5.  In such cases “[t]he heading which provides the most specific description shall be preferred to headings providing a more general description.” GRI 3(a). “Under this rule of relative specificity, we look to the provision with requirements that are more difficult to satisfy and that describe the article with the greatest degree of accuracy and certainty.” Carl Zeiss, 195 F.3d at 1380 (internal quotation marks and citation omitted). “[C]omposite goods” that “cannot be classified by reference to [GRI] 3(a), shall be classified as if they consisted of the material or component which gives them their essential character[.]” GRI 3(b). The essential character inquiry “var[ies] as between different kinds of goods,” and “may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.” Home Depot U.S.A., Inc. v. United States, 491 F.3d 1334, 1336–37 (Fed. Cir. 2007) (quoting EN (VIII) to GRI 3(b)). “[T]he essential character of the subject articles is a question of fact.” CamelBak, 649 F.3d at 1369. Once the appropriate heading is determined, GRI 6 is applied to determine the appropriate subheading. GRI 6 (providing that “the classification of goods” by subheadings “shall be determined according to the terms of those sub-headings and any related subheading notes and, mutatis mutandis, to the above [GRI], on the understanding that only subheadings at the same level are comparable”).

The ARI contain specific rules for interpreting use provisions in the HTSUS. See ARI 1(a)–(d). ARI 1(a) provides that, when a tariff provision is “controlled by use (other than actual use),” then classification “is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use[.]” ARI 1(b) governs classification by “actual use.” “[A]ctual use” considers only the “[a]ctual use of the imported goods”; “principal use” considers a variety of factors, including actual use, “to classify particular merchandise according to the ordinary use of such merchandise, even though particular imported goods may be put to some atypical use.” Aromont, 671 F.3d at 1313–14 (internal quotation marks and citation omitted).

The Court of Appeals for the Federal Circuit upheld the Court of International Trade’s ruling that, because HTSUS Heading 8473 expressly excludes accessories that are “covers, carrying cases and the like,” Apple’s Smart Cover, as a cover, could not be properly classified under HTSUS Heading 8473.  Apple, 375 F. Supp. 3d at 1301-02. 

It was also argued that the Explanatory Note to HTSUS Heading 8473 creates an exception to HTSUS Heading 8473 for covers that also act as stands for certain machines, and, therefore HTSUS Heading 8473 captures hybrid stand-covers like the Smart Cover.  However, the Court of Appeals for the Federal Circuit held that Explanatory Notes cannot create an exception to an HTSUS heading.  Explanatory Notes are “generally useful as guides to the scope of unclear HTSUS headings, but they are not legally binding.” Sigma-Tau, 838 F.3d at 1280 (internal quotation marks, alterations, and citation omitted); see H.R. REP. No. 100–576, at 549 (1988) (Conf. Rep.), as reprinted in 1988 U.S.C.C.A.N. 1547, 1582 (“Although generally indicative of proper interpretation of the various provisions of the [HTSUS], the Explanatory Notes . . . are not legally binding,” and, therefore “should not be treated as dispositive.”). They cannot be used to “narrow” or amend or create ambiguity in “the language of [a] [HTSUS] heading[.]” Rubie’s Costume Co. v. United States, 337 F.3d 1350, 1359 (Fed. Cir. 2003).

In conclusion, this case is significant because it illustrates the importance—commercially—of classifying merchandise and provides guidance for doing so. As a side note, I spent the last couple of summers reading the Bible, and I humbly question whether similar principles should be utilized when reading passages (as opposed to verses of the Bible).

About the Author




It’s nearly impossible to find educated people for this topic,
but you sound like you know what you’re talking about! Thanks


Heya i am for the primary time here. I found this board and I in finding
It really helpful & it helped me out a lot. I hope to present something again and aid others like you helped me.


This design is steller! You obviously know how to keep a reader entertained.
Between your wit and your videos, I was almost moved to start my own blog (well, almost…HaHa!) Fantastic job.
I really loved what you had to say, and
more than that, how you presented it. Too cool!


I am sure this piece of writing has touched all the internet people, its really
really nice article on building up new weblog.


The Colours “Central Park After Dark” cue is black and contains a watermark of the company’s name.
The great thing about board games is there’s a massive amount
games for every single population and playing style. Creating moisture through the use
of the fogger, mister system, hand misting, etc.

college ruled lined notebook paper

For starters I would like to say fantastic blog! I
had a fast question which I’d prefer to ask unless you mind.
I used to be interested to find out how you center yourself
and clear the mind prior to writing. I have had difficulty clearing my thoughts
in obtaining my thoughts out. I actually do enjoy
writing nevertheless it just may seem like the very first ten to fifteen minutes tend to be wasted simply just figuring out how to begin. Any ideas or tips?
Many thanks!

Here is my web page – college ruled lined notebook paper


Hi, Neat post. There’s an issue with your web site in web explorer, might check this… IE still is the marketplace leader and a large component to other folks will omit your excellent writing due to this problem.

Gaylord Gordillo

You could definitely see your enthusiasm within the work you write.The world hopes for even more passionate writers such as you who are not afraidto mention how they believe. Always go after your heart.

Rhonda Sheets

Unquestionably imagine that which you said.Your favourite justification appeared to be at the internet the simplest thingto remember of. I say to you, I definitely get irked whilst folks consider concerns that they plainly don’trecognise about. You controlled to hit the nail upon the highest and also outlined out the entire thing withno need side effect , folks can take a signal. Will likely be again to getmore. Thanks

chic sparrow

Great post. I was checking constantly this blog and I’m impressed!
Very useful info specifically the last part 🙂 I maintain such information much.

I had been looking for this particular information for any very long
time. Many thanks and best of luck.

Here is my web-site … chic sparrow


Great write-up, I am regular visitor of one?¦s blog, maintain up the excellent operate, and It’s going to be a regular visitor for a long time.


Good day! I could possibly have sworn I’ve gone to
this website before but after checking through some of the post I realized it’s unfamiliar with me.
Nonetheless, I’m definitely delighted I found it and I’ll be bookmarking and checking back frequently!

Feel free to surf to my homepage … SamAHattaway

cheap flights

I’ve been surfing online greater than 3 hours these days, yet I by no means found
any attention-grabbing article like yours. It’s pretty value enough for me.
In my opinion, if all webmasters and bloggers made good content material as
you probably did, the net can be much more helpful than ever before.

cheap flights

Oh my goodness! Incredible article dude! Many
thanks, However I am going through issues with your RSS.

I don’t know the reason why I cannot join it. Is there anybody getting similar RSS problems?
Anyone that knows the answer can you kindly respond? Thanx!!

cheap flights

hey there and thank you for your information – I’ve certainly picked up something new from right
here. I did however expertise a few technical points using this site, since I experienced to reload the website a lot of times
previous to I could get it to load properly. I had been wondering if your web hosting is OK?

Not that I’m complaining, but slow loading instances
times will often affect your placement in google and could damage your high quality score if advertising and marketing with Adwords.
Anyway I am adding this RSS to my e-mail and can look out for a lot more of your respective exciting content.
Make sure you update this again very soon.

cheap flights

Hi there i am kavin, its my first occasion to commenting anyplace, when i read this piece of writing i thought i could also make comment due to this brilliant paragraph.

Gil Mcmillion

I do not know whether it’s just me or if perhaps everyone else encountering issues with your website.It appears as though some of the written text in your content arerunning off the screen. Can someone elseplease comment and let me know if this is happening to them too?This could be a problem with my internet browser because I’ve had this happen previously.Thanks


What a information of un-ambiguity and preserveness of valuable experience on the topic of unpredicted feelings. Jayme Amos Felise Garland Danya Hurwitz


I have read so many content regarding the blogger lovers but this paragraph is truly a fastidious post, keep it up. Meris Abel Pate Morganica Wilburt Agretha


I like the helpful information you provide in your articles. I will bookmark your blog and check again here frequently. I’m quite certain I will learn plenty of new stuff right here! Good luck for the next!


I quite like looking through a post that will make people think. Also, thanks for allowing me to comment! Evelina Raimund Kallista


Wow, awesome blog layout! How long have you been blogging for? you made blogging look easy. The overall look of your website is excellent, let alone the content! Chandra Everard Sunil

vreyro linomit

It’s a shame you don’t have a donate button! I’d most certainly donate to this brilliant blog! I suppose for now i’ll settle for book-marking and adding your RSS feed to my Google account. I look forward to new updates and will share this site with my Facebook group. Chat soon!


Great beat ! I would like to apprentice even as you amend your site, how can i subscribe for a blog web site? The account aided me a acceptable deal. I have been tiny bit acquainted of this your broadcast offered vivid transparent concept| Michel Levi Nathanael


I visited several web sites but the audio quality for audio songs current at this site is actually excellent. Gena Kristos Sicular


Wow i can say that this is another great article as expected of this blog,The website is looking bit flashy and it catches the visitors eyes. Cindi Sigismund Roxana


Piece of writing writing is also a excitement, if you know afterward you can write otherwise it is difficult to write. Estrella Anderson Swaine


I savour, cause I discovered just what I was taking a look for. You have ended my 4 day long hunt! God Bless you man. Have a great day. Bye Leanor Ced Lauro


I am sure this piece of writing has touched all the internet users, its really really good post on building up new weblog.| Kelci Laughton Jeanette


Having read this I thought it was very enlightening. I appreciate you finding the time and energy to put this information together. I once again find myself personally spending a lot of time both reading and commenting. But so what, it was still worthwhile! Casandra Ned Surbeck

filofax domino luxe

Thanks for the marvelous posting! I quite enjoyed
reading it, you might be a fantastic author.I will be sure you bookmark your
site and will return later in life. I would like to
encourage continue your great work, possess a nice evening!

Here is my site filofax domino luxe


Simply killing some in between class time on Digg and I found your article . Not usually what I prefer to examine, but it was absolutely price my time. Thanks. Daryn Jessie Carnahan


Magnificent website. A lot of useful info here. I am sending it to a few friends ans also sharing in delicious. And certainly, thanks for your sweat! Lea Raimondo Maryly


Leave a Reply

Your email address will not be published.