Main Rules of Interpretation of the UCC FEA

The Main Rules of Interpretation of the UCC FEA are applied for the determination of a classification grouping of a commodity. There are six main rules. Тhe first four rules regulate an order of determination of a commodity item and specify a procedure of referencing a commodity to an appropriate commodity item. The fifth rule considers classification of a package. The sixth rule is applied after identification of the commodity item, and it regulates referencing the commodity to appropriate subitems, categories and subcategories.

The first four rules are used consequently, from Rule 1 to Rule 2 (а), from Rule 2 (а) to Rule 2 (b), etc. It is not allowed to use Rule 3 (а) without using consequently Rules 1, 2 (а) and 2 (b). Only if a previous rule can not be applied, it is allowed to aplly the following one.

Rule 1 «Titles of sections, groups and subgroups are applied only for ease of use. For legal purposes, the classification of goods is performed on the basis of the texts of commodity items and notices to sections or groups and, unless those texts and notices envisage otherwise, in accordance with the following provisions».

Explanations:

  • 1. Rule 1 starts with the remark that titles of sections, groups and subgroups are applied «only for ease of use». Therefore, they do not have a legal force for the classification.
  • 2. The second part of this Rule says that the classification should be performed:
    • а) on the basis of the texts of commodity items and relevant notices to sections or groups. This provision is obvious and many commodities are classified in the commodity nomenclature without further referencing to the Rules of Interpretation (for example, alive horses (commodity item 0101);
    • б) unless those texts envisage otherwise, then, in accordance with the provisions of Rules 1 2, 3, 4 and 5, where it is applicable. The phrase «unless those texts envisage otherwise» has a single meaning that the titles of commodity items and notices to sections or groups are of the highest priority, i.e. while classifying a commodity, they are considered in the first place.

Rule 2 (а) «Any reference in a title of a commodity item to a commodity should be considered also as the reference to this commodity in incompleted or unfinished form, on the condition that being provided in incompleted or unfinished form, this commodity possesses a main feature of the completed or finished commodity; also it should be considered as a reference to the completed or finished commodity (or being classified in the commodity item as the complete and finished one, owing to the given Rule), provided in unassembled or dismantled form.

Explanations:

1. The first part of Rule 2 (а) extends a content of any commodity item to which this commodity belongs, for inclusion into this item not only a completed (accomplished) product but also this product in incompleted or unfinished form on the condition that in the provided form this product possesses main properties of the completed or ready product.

The provisions of this Rule also cover intermediate goods (semiproducts) if they are not separated into a certain commodity item. Тhe term «intermediate» describes a product that is not ready for the direct consuming, has a rough shape or contours of a ready product or a part, and that can be used, besides exceptional cases, only for modification into a ready product or a part (for example, intermediate goods for plastic bottles that are semiproducts, having a shape of a tube, with one end closed and another one open with a threading for covering with a screw cap, and a part which is lower than the end with the thread, is used for blowing out to the desired size and form).

Semiproducts that do not have a specific shape of ready products (such as stacks, disks, pipes, etc.) are not considered as «intermediates».

2. The second part of Rule 2 (а) stipulates for that completed or ready goods provided in unassembled or dismantled condition, are classified in the same commodity item that the assembled goods. Usually, the commodities are provided this way in order to comply with the requirements to packing, loading and unloading or transportation.

The given Rule also is applied to incompleted or unfinished products that are provided in unassembled or dismantled form, on the condition that they are considered as the products, completed or fully processed by manufacturers, owing to the first part of the given Rule.

Тhe term «commodities in unassembled or dismantled form» defines the products, components of those should be assebled with the use of interior packing (screws, nuts, bolts, etc.) or, for instance, with the use of riveting or welding,on the condition that only assembling operations are required for that.

Unassembled components of a commodity over the number required for its assembling, should be classified separately.

Rule 2 (b)«Any reference in the title of a commodity item to any material or a substance should be considered also as the reference to the mixes or combinations of this material or substance with other materials or substances. Any reference to a commodity of a certain material or substance should be considered also as the reference to the commodities that fully or partially contain this material or substance».

Explanations:

Rule 2 (b) relates to the mixes and combinations of materials or substances, and the commodities made of two or more materials or substances. The Rule is associated with the commodity items in which a material or a substance is indicated (for example, commodity item 0507 – an elephant ivory), and with the commodity items in which a commodity is indicated made of a certain material or substance (for example, commodity item 4503 – goods made of traditional cork). It should be mentioned that the given Rule is applied only in unless otherwise is envisaged in these commodity items or notices to sections or group (for example, commodity item 1503 – lard stearine, unblended ...).

The core of this Rule is to extend any commodity item, associated with a material or substance, through inclusion of mixes or combinations of this material or substance with other materials or substances. Effect of the given Rule is also to extend any commodity item, associated with commodities made of this material or this substance, through inclusion of the commodities that are partially made of this material or this substance.

However, this extends a commodity item not enough to include the commodities that, according to Rule 1, are not allowed for consideration as those that comply to the description of this commodity item; this occurs in the case when an addition of other material or substance caused a loss by these commodities of the properties of those types of commodities that are mentioned within this commodity item.

As a consequence of this Rule, mixes and combinations of materials and substances and commodities made of more than one metarial or substance, if they, prima facie, can be referenced to two or more commodity items, should be classified folowing the principles of Rule 3.

Rule 3 «In case if, owing to Rule 2 (b) or due to any other reasons a commodity on the first sight (prima facie) can be related to one or more commodity items, the classification of these commodities is performed, as follows:»

Rule 3 (а) «Preference is given to the commodity item that contains the most detailed description of the commodity, in comparison with the commodity items with more generalised descriptions. However, when each of two or more commodity items relates only to a part of materials and substances that comprise mixes or multicomponent product, or only to a part of commodities provided in a set for a retail sale, then the given commodity items should be considered as equal in terms of this commodity, even if one of them provides more complete or exact description of the commodity».

Explanations:

The first technique (method) of classification is described in Rule 3 (а), and according to it, the preference is given to the commodity item that provides for a more exact description, against the commodity item with a more generalised description.

It is useless to establish fixed rules, in accordance to which one can define, whether one commodity item gives a more detailed description of the commodity than another item but in general, it should be mentioned that:

  • а) more exactly, a commodity is characterised by its title than a title of a group of commodities (for example, electric shaver and hairclipper with built in electromotors are included into commodity item 8510 but not into commodity item 8467 as hand tools with built in electromotors or into commodity item 8509, as electrical and mechanical home appliances with built in electromotors);
  • б) if the commodities comply with the description that identifies them more precisely, then this description is more exact than the one that gives a less complete description. For example, textile carpets for a passenger compartment of a car should be classified not as an accessory to a car in commodity item 8708 but within commodity item 5703 where they are more completely described as carpets.

But if within the two or more commodity items only a part of materials or substances are mentioned that comprise mixes or multicomponent commodities, or only a part of these commodities in a set for the retail sale, then these commodity items should be considered as equaly detailed descriptions of these commodities, even if one of them gives a more complete amd detailed description than others. In such cases the classification should be preformed followitn Rule 3 (b) or 3 (c).

Rule 3 (b) «Mixes, multicomponent products that consist of various materials or made of various components, and commodities provided in sets for retail sale, classification of which can not be performed in accordance with the provisions of Rule 3 (а), should be classified upon a material or a component that provides for these commodities their main properties, on the condition that this criterium is applicable».

Explanations

1. The second technique relates only to:

  • а) mixes;
  • б) multicomponent commodities that consist of various materials;
  • в) multicomponent commodities that consist of various components;
  • г) commodities that comprise sets for retail sale.

This technique is applied only if Rule 3 (а) is not applicable.

In all these cases the commodities should be classified in the way that they consist only of a material or a component whichprovides main properties to them to the extent within which this criterium is applicable.

Factors that define these main properties would be different for different types of commodities. It can be defined, for example, by the nature of a material or a component, its volume, scope, mass, cost or a function that this material or component fulfills while the commodity is consumed.

When this Rule is applied to multicomponent commodities made of different components, not only those commodities in which these components are joined to each other making a complete unit should be considered but also commodities with separable components,on the conditionthat these components are adjusted to each other, supplement each other and, if taken together, comprise a complete unit that usually does not allow to offer it for sale in separate parts, for example, ash trays that consist of a base and a disposable can for ash. As usual, the components of such multicomponent commodities are packed together.

2. When applying the given Rule, the term «commodities provided in a set for retail sale» relates to the commodities that:

  • а) соnsist, at least, of two different products, prima facie, that are classified under different commodity items. Due to that reason, for example, six forks for fondue can not be considered as a set, from the point of application of this Rule;
  • b) соnsist of products or goods that are collected together for the purpose of satisfying a certain need or to fulfill a certain job;
  • c) are packed in the way that does not require repacking for sale to a consumer (for example, in boxes or cases or on bases).

Therefore, this term defines sets that consist of, for example, different food products produced for joint consuming for making a dish ready for eating or a food. For example, sets of a sandwich with beef, with cheese or without it, in a bun (commodity item 1602), packed together with potato chips (fried in a deep fat) (commodity item 2004) are classified in commodity item 1602.

However, the rule does not cover the sets of food products that are packed together and consist of, for instance: a tin of shrimps (commodity item 1605), a tin of goose liver (commodity item 1602), a pot of cheese (commodity item 0406), a tin of sliced bacon (commodity item 1602) and a tin of sausages (commodity item 1601). In this case as well as in the similar cases of food product sets each product should be classified separately in a relevant commodity item.

Rule 3 (c) «Commodities that can not be classified in accordance with the provisions of Rule 3 (а) or 3 (b), should be classified in the commodity item which is the last in the increasing order of codes among the commodity items that are equally acceptable for consideration in terms of the classification of these commodities».

Rule 4 « Commodities that can not be classified in accordance with the provisions of the rules described above, should be classified in a commodity item of the commodities that are the most close (similar) to the considered commodities».

Explanations:

The given Rule covers commodities that can not be classified in accordance with Rules 1–3. It envisages the classification of these commodities under the commodity item which covers the closest commodities.

When classifying upon Rule 4, the provided commodities should be compared with the similar commodities, to identify the commodities, to which the first commodities are most similar. The provided commodities are classified in the same commodity item that the commodities which are the most similar to them. Similarity of commodities may depend on a lot of factors such as an appearance, properties and purpose. For example, tongs for a kalian on their characteristics are most close to the tongs for sugar, therefore, their classification is considered in commodity item 8215.

Rule 5 (а) «Covers and pants for photo cameras, musical instruments, cases for guns, drawing accessories, necklaces and similar package having a special shape or fittings for a placement of a certain product or a set of products, suitable for a long-term use and provided for together with the products, for those it is designed, should be classified jointly with the products that are packed inside it, if this type of package usually is supplied for sail together with these products. However, this Rule does not apply to the package that, joined with the product, makes a product whole and gives main properties to this product».

Explanations:

The given Rule is applied only to the package that:

  • 1) has a special shape or is fitted to hold this certain product or a set of products, i.e., it is designed especially for this certain type of products. Some kinds of packages repeat a shape of the embedded product;
  • 2) is suitable for a long-term use, i.e. it has the same longevity that the products which are embedded into it. This package also serves for the provision of safety of these products, when they are not used (for example, during transportation or storage). These criteria makes it different from a usual package;
  • 3) is provided together with the products for those it is designed, irrespectively to the fact that the products can be packed separately, for the purposes of transportation. When provided separately, this package is classified in the commodity items that are appropriate to its characteristics;
  • 4) is the package that is usually sold together with the relevant product;
  • 5) does not give main properties to a whole product.

Examples of the package provided together with the products designed for it that should be classified in accordance with the given Rule, are the following: caskets and boxes for jewelry (commodity item 7113); cases for electric shavers (commodity item 8510); cases for binoculars and telescopes (commodity item 9005); pants and cases for musical instruments (for example, commodity item 9202); weapon cases (for example, commodity item 9303).

Examples of the package that is not a subject of this Rule, are the packages like a silver tea pot with contents or a decorative ceramic vase with sweets putted inside it.

Rule 5 (b) «In accordance with the provisions of Rule 5 (а), packing materials and the package that are supplied together with the products they contain, should be classified jointly, if they are of the type that is usually used for packing these commodities. However, this provision is not an obligatory one if those packing materials or the package are obviously suitable for the reuse.».

Explanations:

This Rule regulates classification of packing materials and package that are usually used for packing the commodities, for those they are designed. However, this provision does not apply if those packing materials or the package are obviously suitable for the reuse, for example, some kinds of balloons (containers) or tanks made of black metals, for compressed or condensed petroleum gas.

The given Rule is secondary in relation to Rule 5 (а), therefore classification of pants, cases and similar packages mentioned in Rule 5 (а) should be performed in accordance with that Rule.

Rule 6 «For legal purposes, classification of commodities in commodity items, commodity catergories and commodity subcategories should be made in compliance with the titles of the latter as well as the appropriate notices, and with taking into account of certain warnings (mutatis mutandis), provisions of the above mentioned Rules, on the condition, that only titles of one level of detalisation can be compared. For the purposes of this Rule the relevant notices to sections and groups can be applied, unless otherwise is mentioned in the context».

Explanations:

  • 1. The mentioned above Rules 1 – 5 are applicable, mutatis mutandis, for the classification at the level of subcategories in the framework of the same commodity item.
  • 2. In terms of Rule 6, the below mentioned phrases have the following fixed meaning:
    • а) «titles of one lelel of detalisation» – subitems with one hyphen (level 1) or subtitles with two hyphens (level 2). Тhus, when making a comparative analysis of two or more subitems with one hyphen in the framework of one commodity item according to Rule 3 (а), a possibility of referring a commodity to one of them should be identified only upon the description of the commodity in these subitems with one hyphen. After the subitem with one hyphen which gives the most certain description of the commodity is identified, and if the subitem is divided, then and only then one should take into account the description on the level of subitems with two hyphens and choose one of them;
    • б) «unless otherwise is mentioned in the context» – on the exception of the cases when the notices to a section or a group are incompatible with the text of subitems оr the notices to the subitems. These take place, for instance, in group 71, where the meaning of the term «platinum» in notice 4C to the group differs from the meaning of the term «platinum» in notice 2 to the subitems. Therefore, in the case of interpretation of subitems 7110 11 and 7110 19 notice 2 to the subitems is applied but not notice 4B to the group.
  • 3. An incidence of a subitem with two hyphens should not go beyond the subitem with one hyphen, to which this subitem with two hyphens belongs; аnd an incidence of a subitem with one hyphen should not go beyond the framework of the commodity item, to which the given subitem with one hyphen belongs.