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Interpretation of a WCO explanatory note

What exactly is covered by this item in the WCO Explanatory notes to tariff nomenclature

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Below is an explanatory note published by the WCO:

"Combinations of plastics and materials other than textiles

This chapter also covers the following products , whether they have been obtained by a single operation or by a number of succesive operations provided that they retain the essential character of articles of plastics:

(a) Plates, sheets, etc., incorporating a reinforcement or a supporting mesh of another material (wire, glass fibres, etc.) embedded in the body of the plastics."

There are 3 further clauses in this section describing various forms of plastic, but it is item (a) that I need to interpret. (My interpretation is different to that of an HMRC officer, and has a substantial impact in the amount of duty payable on the product in question.

So what I need to work out is whether the 'reinforcement' needs to be embedded in the body of the plastic in order for this clause to apply? or is it the case that any reinforcement would apply and it is only the mesh that would have to be embedded in the plastic?

Thanks!

Replies (22)

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By JDBENJAMIN
30th Nov 2019 12:12

The absence of a comma after 'reinforcement' tells you that this clause means the reinforcement has to be embedded.

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Replying to JDBENJAMIN:
Psycho
By Wilson Philips
30th Nov 2019 14:59

I disagree - sort of.

On a correct grammatical interpretation the absence of a comma after “reinforcement” means that the “or” separates everything before it from everything after. Placing a single comma after “reinforcement” would actually be grammatically incorrect.

But there is a considerable amount of ambiguity. If the draftsman had intended to require the reinforcement to be embedded then there should have been commas after both “reinforcement” and “)”. Alternatively, removal of the “a” before “supporting” would alter the interpretation.

Having said that, one assumes that the reinforcement is made of a different material, which then links “reinforcement” and “material” so my conclusion is that both reinforcement and mesh need to be embedded (this would have been clearer with the second comma after “mesh” instead and my view is that would have been the correct grammatical construction to convey the intended meaning).

“Plates, sheets, etc., incorporating a reinforcement, or a supporting mesh, of another material (wire, glass fibres, etc.) embedded in the body of the plastics." is quite unambiguous to me.

The joys of the nuances of the English language.

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By SwanseaJack
30th Nov 2019 14:08

Thanks for the reply.
Just for clarity, why would a comma be required after the word reinforcement to signify that it would not need to be embedded?

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Replying to SwanseaJack:
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By JDBENJAMIN
30th Nov 2019 14:14

I'm not going to bother giving you lessons in the meaning of punctuation, so look it up. It seems you want to argue against what I have said merely because my interpretation is not the one you wanted to hear.

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Replying to JDBENJAMIN:
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By SwanseaJack
30th Nov 2019 14:42

It's not that at all.
I actually agree with your interpretation, but amongst the people that I have debated this with there is a split of about 50:50.

I have tried researching the grammatical structure, and the best that I have come up with is that the comma changes the structure so that the words following it become an independent clause (which supports your/my interpretation)..... but I cannot find empirical proof that this is correct.

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By WhichTyler
30th Nov 2019 14:31

An alternative approach; are you the only company in the country importing this product or type of product? If not, what do the other ones do? Is there a trade association you can ask for help or advice?

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Replying to WhichTyler:
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By SwanseaJack
30th Nov 2019 15:05

The background is that HMRC issued a BTI (binding tariff information) confirming our classification.
They are now revoking that BTI, and I believe that ultimately the interpretation of that clause is what the case rests on (the reinforcement in our product is not embedded within the plastic).
HMRC have identified 2 other similar products that have BTIs supporting their view and I have so far found 13 BTIs from various countries across Europe that support my view.
At the moment we have to decide whether to appeal.

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Replying to SwanseaJack:
Psycho
By Wilson Philips
30th Nov 2019 15:21

So your argument is that because there is a reinforcement of a non-plastic material which is not embedded then the article no longer has the essential character of an article made of plastic?

As I said above, key is the point that the reinforcement is made of a non-plastic material (otherwise the article would retain plastic character, embedded or not). Therefore “reinforcement” is linked with “other material” - with or without commas - so that the only reasonable interpretation is that the reinforcement must also be embedded.

I think I would appeal.

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Replying to Wilson Philips:
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By SwanseaJack
30th Nov 2019 15:23

Yes.
The product is substantially manufactured from stainless steel and plastic (with a small amount of other metal parts).
By weight/cost the steel accounts for about 90%+ of the product, but without the plastic the product would be unusable. The stainless steel is vital to give the product strength, but also adds decorative/aesthetic qualities.

I don't think that any reasonable person would describe the 'essential characteristic' of the product to be plastic (as required under the WTO's General Interpretive Rules), but my contact at HMRC does based on the explanatory note.

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Replying to SwanseaJack:
Psycho
By Wilson Philips
30th Nov 2019 15:34

HMRC’s view does appear to be nonsensical. Embedded or not, what is reinforcing what? It would be unusual (although not impossible) for a plastic component to reinforce a steel product. In any event, without knowing what it is, I find it highly implausible that a product that is predominantly or substantially metal could be said to have the essential character of an item made of plastic.

From a layperson’s perspective I would have thought that the purpose behind the regulations etc was to treat articles as plastic that look and feel like plastic notwithstanding the fact that they may contain non-plastic materials. I don’t know to what extent the addition of an external component would alter that character but I keep returning to the conclusion that the clause in question refers to embedded reinforcement.

Appeal.

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paddle steamer
By DJKL
30th Nov 2019 15:42

" provided that they retain the essential character of articles of plastics:"

Has the above been defined anywhere else, is there not further guidance anywhere on what constitutes "the essential character of articles of plastics" and would that possibly be a more fruitful approach? For instance if one had sheet steel with a plastic coating would that not say more have the essential characteristic of steel rather than plastic, where is the line?

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By whitevanman
30th Nov 2019 17:50

I would agree that, on the facts supplied, the HMRC position seems unusual, but I feel we would have a better idea if we knew more about what the product is etc. For example, you say the product would be unusable without the plastic and that 90% of the product is steel " by weight / cost". It may be however, that the two measures quoted are misleading. A small amount of steel weighs more than a much larger amount of plastic and will likely cost more. So you have to look at all factors to reach a decision on whether the product retains the character of plastic.
I would also agree with others that the reinforcement or mesh needs to be of a material other than plastic and must be embedded to come within the paragraph quoted.

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Replying to whitevanman:
Psycho
By Wilson Philips
30th Nov 2019 18:03

If you ask nicely, OP might PM you as he has me ;-)

I’ll say at this point I am less than 100% convinced, but still, on balance, of the opinion that HMRC are wrong. Precise product specs will be important.

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Replying to Wilson Philips:
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By whitevanman
30th Nov 2019 19:08

Got one!
From what I have seen, I struggle to view the product as being made of plastic at all ( though I know it is). Certainly not convinced HMRC have got it right

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Replying to whitevanman:
Psycho
By Wilson Philips
30th Nov 2019 19:23

It is an interesting one, though. I have seen similar items where the metal flex is encased in plastic, which arguably would be more like a plastic item with an embedded metal reinforcement. So, does it matter if the plastic is on the inside or the outside?

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Replying to Wilson Philips:
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By SwanseaJack
30th Nov 2019 20:10

The identification of the commodity code is governed by the 'General Interpretative Rules' (GIR) issued by the World Trade Organisation.

Rules 3a, 3b & 3c effectively state that in the event that a product is a combination of materials which each 'equally merit consideration' then the tariff heading that applies is that which occurs last numerically (and the tariff heading for stainless steel is higher than plastic).

HMRC argue that the steel is just a reinforcement, so under rule 3b, plastic is the only heading that merits consideration due to their interpretation of the WCO explanatory note.
As the metal is not embedded in the plastic in the product being considered, then I wish to argue that the WCO note does not apply.

For that reason the correct interpretation of the WCO note is vital:
"(a) Plates, sheets, etc., incorporating a reinforcement or a supporting mesh of another material (wire, glass fibres, etc.) embedded in the body of the plastics."

I am still of the opinion that the absence of a comma after the word reinforcement means that my interpretation is probably correct - but it certainly does not appear to be 'cut & dried'!

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Replying to SwanseaJack:
Psycho
By Wilson Philips
30th Nov 2019 21:14

All I can do is wish you luck, although one further thought occurs to me:

The “etc” is quite unhelpful, but the item in question would not appear to fit the description as a “plate, sheet etc”

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Replying to Wilson Philips:
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By whitevanman
30th Nov 2019 21:33

The OP will know best how their product is made but I commented in a PM that, the products I have seen usually comprise a tube (plastic or rubber) surrounded by a steel "coil" and the whole is then encased in plastic. So, a plastic sandwich. The steel would probably be viewed as "embedded".
That said, if you have seen the product, do you think it looks like plastic? If not, how can it retain the characteristics of plastic?
Finally, based on the OP's latest, hmrc say that the steel is simply re inforcement ( so the applicable product code is that for plastic). Again the OP will know best but I am not sure the purpose is reinforcement. A simple plastic / rubber tube would probably do the job. The main purpose of the steel looks to be aesthetic but as i say, the OP will know best.

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Replying to whitevanman:
Psycho
By Wilson Philips
30th Nov 2019 22:09

Well, to show you what an exciting life I lead, I’ve had a look at the three in this house. While they presumably have a plastic inner tube you would never know by looking at them and I would say that the primary construction material is metal with the plastic liner being just that, to prevent leakage. There is no way that one could reasonably argue that the metal is embedded in the body of the plastic, which is what I am certain the clause means.

Also quite interesting is the product description of the “similar” item, which is described as being made of stainless steel - plastic is not mentioned at all in the entire description. And, to repeat, it certainly isn’t a plate, sheet “etc”

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Replying to Wilson Philips:
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By whitevanman
30th Nov 2019 22:20

Not suggesting you get out the tools, but if you were to take one off, you would find the metal isn't actually the "tube". There is a tube inside it which does all the work.
The metal is simply an outer sleeve and as I say, it really seems to have no purpose other than making the whole look more substantial. Of course it needs to be flexible and a simple steel tube wouldn't work, so the coil like arrangement is used. Then you have the problem that bare metal could unwind or injure (etc, etc) so the whole is then put inside another, plastic tube. Hence my ref to a sandwich.
In reality, both the external plastic and the steel are ancillary to the actual internal tube (possibly rubber) that does the work.
As to whether, if the product is as described, the steel is "embedded", I suspect a tribunal would consider it is. Certainly embedded within the product but clearly not embedded within the plastic tube itself. Might be worth an appeal but it depends on cost / benefit etc.

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Replying to whitevanman:
Psycho
By Wilson Philips
30th Nov 2019 22:40

But in my case (and, it would appear, the product linked to) there is no outer plastic sleeve - although as I mentioned above I have seen them. It is clear from the description (and its appearance) that the product is marketed as a metal hose, designed not to twist or kink. It may well be that the inner plastic or rubber tube performs the function of containing the water flow but that doesn’t alter the fact that the hose is constructed primarily of metal. And, it would seem, construction/materials are more important than function.

Further, I would say that in my case the metal does not reinforce the plastic but rather the plastic seals/lines the metal.

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Replying to Wilson Philips:
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By whitevanman
01st Dec 2019 03:09

I have looked again at the product linked to and the description is, as you say, of a metal tube etc, not one covered in plastic. If, as the OP says, this is similar to the product in question, I cannot see how anyone can argue that it is plastic at all. I very much doubt that the inner tube is made of plastic but even if it is (and the OP suggests it is), I dont think anyone looking at it would know that. It is certainly not a product that retains the characteristics etc. of plastic.
At least the product which I described was closer to being plastic!
As to the reinforcement issue, I can understand how one might conclude that the metal simply serves that purpose. The inner, plastic, tube contains the water and is flexible. The problem is that it could be prone to kinking and that would cause problems. The specific construction and reinforcement provided by the metal does serve to prevent such but I am not sure I would consider the metal to be embedded in the plastic ( more details might answer the point).
I would say however that, on balance, one would not consider this to be a plastic product (unless one is a tribunal judge of course!).

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