On May 18, 2016, U.S. Customs and Border Protection (CBP) published a proposed ruling revocation related to the tariff classification of certain plastic garment hangers imported with garments.
Generally, plastic garment hangers, when imported separately from garments, are classifiable under subheading 3923.90.00, HTSUS, dutiable at 3% ad valorem. For several years, CBP has held that plastic hangers imported with garments are separately classifiable under subheading 3923.90.00, so long as the hangers are clearly suitable for repetitive use. This allows importers to pay duty on hangers accompanying garments at the three percent rate instead of at the likely higher rate that would be applicable to the garment itself. If the hanger is not capable for repetitive use, then the hanger is subject to the garment’s duty rate.
In order to qualify for separate classification, CBP requires that (1) the hangers must be of a sufficiently substantial construction to be suitable for repetitive use; and (2) that information be available regarding the commercial reusability of the hangers (such as being designed and approved for use in a hanger recovery program such as VICS).
Historically, CBP has disqualified plastic hangers imported with garments if they featured an integral plastic top hanging hook, as opposed to a metal swivel hook. (CBP also uses additional criteria in determining whether a hanger’s construction is sufficiently substantial.)
It appears that CBP is now prepared to relax this restriction, at least somewhat. The proposed revocation would permit hangers described as “made from black plastic with an integral plastic top hanging hook” to be classified separately under subheading 3923.90.00, even when imported holding garments. It remains to be seen how far CBP will be willing to extend this seemingly relaxed standard.
CBP is accepting written comments on the proposed revocation until June 17, 2016. If you have any questions regarding this issue or if you would like assistance in preparing comments, please contact Joseph M. Spraragen (jspraragen[at]gdlsk.com). We are also available to review samples in order to advise on eligibility for duty savings or retroactive duty refunds.
© 2016 Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP – a member of the EACCNY