The UK Customs Tribunal was recently called upon to make a ruling as to the classification of rear-view mirror reversing systems in the case of Spot Technology (TC00300). The issue was whether the system in question was entitled to an Autonomous Duty Suspension under CN code 8528.59.90.20:

"Monitors and projectors... Liquid crystal display colour video monitor having a DC input voltage of 7 V or more but not exceeding 30 V, with a diagonal measurement of the screen of 33.2 cm or less, suitable for the incorporation into goods of chapters 84 to 90 and 94"

or whether it should be classified under CN 8528.59.90.90 (14% duty)

"Monitors and projectors...other..."

Facts

The item in question comprises a rear view mirror with built in 4.5" colour LCD screen and TV camera and is designed for use in motor vehicles with the camera fixed to the rear bumper. The monitor clips onto the original rear view mirror and has an input cable that can be detached from the wiring in the car so that the monitor can be removed and taken away for security purposes. The machine has input ports for a video signal and a camcorder signal. The wiring allowed the system to be connected to the reversing lights of the car so that the reversing system was automatically engaged when the reversing light came on. Installation of the system is required by a qualified technician.

HMRC and Spot both agreed that the product was a composite good that was to be classified under Rule 3 of the General Rules of Interpretation and the part that gave it its essential characteristic was the monitor. However, the issue, and main point of disagreement was whether the monitor was suitable for incorporation into a motor vehicle or incorporation into a rear-view mirror?

The arguments

Spot

Spot Technology argued that the product was exclusively designed for incorporation into a motor vehicle (as defined in Chapter 87 of the Tariff) and that it was not designed for incorporation into a mirror because it is already incorporated into a mirror when imported into the EU. Furthermore they argued that the item fell within the product description of CN code 8528.59.90.20.

HMRC

HMRC argued that rear-view mirrors for vehicles were already properly classified under Chapter 70 and that the item in question was designed to be attached and incorporated into a rear-view mirror and thus was not eligible for incorporation into goods in Chapters 84 to 90 or 94 in the Tariff. Accordingly the product could not be classified under 8528.59.90.20 but should be classified under 8528.59.90.90.

The Judgement

The Tribunal ruled that the way the item was attached to and became incorporated with the rear view mirror meant that it could not be classified under CN8528.59.90.20. They cited Rule 3(a) of the General Rules of Interpretation (GRI) which states that "...the heading which provides the most specific description shall be preferred to headings providing a more general description". They argued that rear-view mirrors were already accounted for in Chapter 70 of the Tariff and therefore because the unit was attached and incorporated into a rear view mirror, then its use was more specific than "incorporation into a motor vehicle", therefore precluding its classification under 8528.59.90.20.

Conclusion

This particular case highlights the difficult and complicated nature of the customs classification of goods. It appears that customs authorities across the EU are taking a narrower approach to customs classifications especially in circumstances when CN codes may be covered by an autonomous duty suspension.

International Trade Solutions has expertise and experience in customs classification matters from reviewing your present systems and codes to applying for Binding Tariff Information. We have saved our clients millions of pounds over the years by correctly classifying goods under the appropriate CN code.

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