Long-Running Swiss Watch Case Winds to a Stop in CIT With Holding for Government
Watches that have case backs set with watch glass made of nonprecious materials -- such as synthetic sapphire -- are not considered to have cases made "wholly" of precious metal and are classified differently than watches that do, the Court of International Trade ruled Nov. 1. The holding came as a watch importer’s motion for judgment in a 2018 case wound up being denied, and the government’s was granted, by CIT Judge Jane Restani.
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The case was marked by a grinding discovery process (see 2401290024 and 2407170041). Though the government also sought to have it dismissed for lack of proof, saying importer Ildico had never actually proved that the watches had even been imported (see 2408150035), Restani ultimately ruled on the classification of the watches.
Ildico argued that its Richard Mille watches should have been classified under Harmonized Tariff Schedule heading 9101 as watches with cases made wholly from precious metals (see 2403130063). CBP, however, liquidated the watches under heading 9102, a higher-duty basket provision that covers watches with composite cases.
Restani handed the win to the government, agreeing that the cases of the Richard Mille watches in question weren’t made wholly of precious metal due to the synthetic crystal watch glass on their backs. She described watch glass on watch backs as a nonessential aesthetic choice. Relying in part on the Harmonized Tariff Schedule explanatory notes and “Richard Mille’s own inventory,” she found that watch cases weren’t defined by the material they’re made of -- she noted that the importer sells another watch with a case entirely made out of watch glass, and “one would not conclude that just because this watch is made of sapphire crystal, it does not have a case.”
She said she wouldn’t be formally ruling on whether the watch case’s titanium screws also excluded the watches from heading 9101, but she discussed the issue briefly “for completion.”
“To resolve the issue of the status of screws as part of the case, the court would wish to hear evidence on what the industry considers a watch case or watch case body to be and whether precious metal screws are successfully used in watches,” she said.
Restani expressed discontent with another government argument: that because 18-karat gold isn’t “pure gold,” the cases aren’t “wholly” made of precious metal. But she said that the “court will not discuss this argument further as the government now has rightly abandoned it.”
And she made a similar comment regarding the U.S. claim that “certain parts that operate the watch are part of the case.” While she seemed more agreeable to a third argument, that the watches weren’t made of precious metal because case sealing features like steel flanges and rubber sealing gaskets weren’t, she still found that the attempt was “properly set aside” because the impracticality of sealing components made of precious metals “makes this an unlikely feature on which the HTSUS headings would distinguish between cases of precious or base metal.”
(Ildico Inc. v. U.S., Slip Op. 24-123, CIT Consol. # 18-00136, dated 11/01/2024; Judge: Jane Restani; Attorneys: Mandy E. Kirschner of Stein Shostak for plaintiff Ildico Inc.; Mathias Rabinovitch for defendant U.S. government)