Eligibility for substitution unused merchandise drawback under 19 U.S.C. § 1313(j)(2); “Other Other” Rule; 19 U.S.C. § 1313(j)(5)

H350619
October 7, 2025
OT:RR:CTF:EPDR H350619 SAB
CATEGORY: Entry Jill LaMadeleine International Tariff Management, Inc. 127 Scott Road Waterbury, CT 06705 RE: Eligibility for substitution unused merchandise drawback under 19 U.S.C. § 1313(j)(2); “Other Other” Rule; 19 U.S.C. § 1313(j)(5) Dear Ms. LaMadeleine: This is in response to your letter, dated July 3, 2025, requesting a ruling on whether certain diamonds are eligible for substitution unused merchandise drawback pursuant to 19 U.S.C. §§ 1313(j)(2) and 1313(j)(5). FACTS: International Tariff Management, Inc. (“ITM”) is a customs brokerage that files drawback claims on behalf of its clients. ITM seeks an advanced ruling as to whether certain diamonds are eligible for substitution unused merchandise drawback pursuant to 19 U.S.C. § 1313(j)(2). Specifically, ITM seeks confirmation that the diamonds that a client intends to import are not precluded from drawback eligibility under 19 U.S.C. § 1313(j)(5). The diamonds at issue are predominantly imported from Vietnam. ITM states that the diamonds are classifiable at the 8-digit level under an “Other” classification of the Harmonized Tariff System of the United States (“HTSUS”) subheading 7102.39.00, which is further broken out into distinct 10-digit statistical reporting numbers (“SRNs”): Nonindustrial: 7102.39.00 Other . . . . . . 7102.39.0010 Weighing not over 0.5 carat each . . . . . 7102.39.0050 Weighing over 0.5 carat each . . . . .

The rate of duty is zero percent ad valorem for subheading 7102.39.00, HTSUS. ITM states that the diamonds will not be “subject to any operations or combinations of operations amounting to manufacture or production” and will only be “imported, inspected[,] and exported.” ITM asserts that although at the 8-digit level the article description for subheading 7102.39.00, HTSUS, begins with the term “Other,” drawback eligibility is not precluded under 19 U.S.C. § 1313(j)(5) because “when we proceed to the ten-digit level the article description does not begin with other.” ITM posits that the article description for SRNs 7102.39.0010 and 7102.39.0050 begins with the word “Weighing.” Accordingly, ITM seeks confirmation that diamonds which are classifiable at the 10-digit level under SRNs 7102.39.0010 or 7102.39.0050 of the HTSUS are eligible for substitution unused merchandise drawback. ISSUE: Whether certain diamonds are precluded from substitution unused merchandise drawback pursuant to 19 U.S.C. § 1313(j)(5). LAW AND ANALYSIS: Drawback “means the refund, in whole or in part, of the duties, taxes, and/or fees paid on imported merchandise.” 19 C.F.R. § 190.2. Pursuant to 19 U.S.C. § 1313(j)(2), as amended by the Trade Facilitation and Trade Enforcement Act of 2015 (“TFTEA”), Pub. L. 114-125, 130 Stat. 122 (Feb. 24, 2016), drawback may be claimed on exported merchandise which is substituted for imported and duty-paid merchandise. In order to claim substituted unused merchandise drawback under 19 U.S.C. § 1313(j)(2), there must be: [I]mported merchandise on which was paid any duty, tax, or fee imposed under Federal law upon entry or importation, any other merchandise (whether imported or domestic), that— (A) is classifiable under the same 8-digit HTS subheading number as such imported merchandise. However, substitution is statutorily limited in circumstances where the applicable 8-digit subheading for the imported and substituted merchandise has an article description that begins with the word “Other.” Pursuant to 19 U.S.C. § 1313(j)(5): (A) For purposes of [19 U.S.C. § 1313(j)(2)] and except as provided in subparagraph (B), merchandise may not be substituted for imported merchandise for drawback purposes based on the 8-digit HTS subheading number if the article description for the 8-digit HTS subheading number under which the imported merchandise is classified begins with the term “other”. (B) In cases described in subparagraph (A), merchandise may be substituted for imported merchandise for drawback purposes if— 2

(i) the other merchandise and such imported merchandise are classifiable under the same 10-digit HTS statistical reporting number; and (ii) the article description for that 10-digit HTS statistical reporting number does not begin with the term “other”. Accordingly, goods may only be substituted for imported merchandise if the substituted goods are classifiable under the same 8-digit subheading as the imported merchandise. See 19 U.S.C. § 1313(j)(2)(A). However, eligibility is limited by the article description rule described in 19 U.S.C. § 1313(j)(5), which can be termed the “Other Other” Rule. See e.g. Headquarters Ruling Letter (“HQ”) H303399 (Mar. 10, 2020) (“the ‘other other’ restriction found under 19 U.S.C. § 1313(j)(5)”); 83 Fed. Reg. 64942 (Dec. 19, 2018) (“the ‘other; other’ HTSUS limitation for residual (or basket) provisions”). The “Other Other” Rule precludes goods from substitution drawback eligibility if the article description at the 8-digit subheading level begins with the term “Other,” unless the two criteria specified in 19 U.S.C. § 1313(j)(5)(B) are satisfied. The first criteria is that the imported merchandise and substituted goods are classified under the same 10-digit SRN within the HTSUS. 19 U.S.C. § 1313(j)(5)(B)(i). The second criteria is that the article description for this shared 10-digit SRN does not begin with the term “Other.” 19 U.S.C. § 1313(j)(5)(B)(ii); see also Spirit Aerosystems, Inc. v. United States, 680 F. Supp. 3d 1329, 1337 (Ct. Int’l Trade 2024) (“Spirit Aerosystems”) (“substituted unused merchandise drawback is inapplicable unless . . . the article description for that 10-digit HTSUS SRN does not begin with the term ‘other.’”). To determine whether, at the 8-digit and 10-digit level, the article description for a subheading or SRN begins with the word “Other” we must first identify precisely where the text of an article description commences. This specific issue was addressed by the Court of International Trade in Spirit Aerosystems. According to the General Statistical Notes of the HTSUS, the legally binding subheading information is contained in the eight-digits preceding the two-digit SRN suffix. General Statistical Note 3(a), HTSUS (2025). The court explained that, to ensure every good falls into one classification in the schedule, the HTSUS has catchall article descriptions for both 8-digit subheadings and 10-digit SRNs which begin with or consist of the word “Other” – such classifications are commonly referred to as “basket provisions.” See Spirit Aerosystems, 680 F. Supp. 3d at 1333. The HTSUS also contains “unattached unifying language,” which, the court clarified, constitutes prefatory language that necessarily refers to more than one 10-digit SRN if it precedes multiple 10-digit SRNs. Id. at 1337-38. Such “unattached unifying language” may appear in the HTSUS column titled “Article Description” but is not placed directly alongside numerical headings, subheadings, or SRNs. Id. Based on the statutory language of 19 U.S.C. § 1313(j)(5), which requires identifying the article description for a specific 10-digit SRN, the court found that only the text directly adjacent to, or appearing on the exact “same line and level of the”10-digit SRN, constitutes the article description “for that” specific SRN. Id. at 1337 (quoting 19 U.S.C. § 1313(j)(5)) (emphasis added). Therefore, any unattached unifying language 3

is not considered a part of the article description for drawback purposes, and the dispositive article description must appear on the same line and level as a specific 10-digit SRN. CBP has also considered how the “Other Other” Rule affects drawback eligibility. In HQ H303399, CBP considered the substitution unused merchandise drawback eligibility of gas turbines classified under subheadings 8411.81.80 and 8411.82.80 of the HTSUS, both of which have an article description which begins with the word “Other” at the 8-digit level. In identifying precisely where the article description for the 8-digit subheading commences, CBP looked to the text directly adjacent to, and appearing on the same exact line as, the subheading at issue. In that case, the HTSUS did not further subdivide the classification of either subheading into 10-digit SRNs. CBP determined that because the 8-digit subheadings were basket provisions that were not further subdivided into 10-digit SRNs such merchandise could not possibly satisfy the two criteria specified in 19 U.S.C. § 1313(j)(5)(B). CBP explained that without further subdivision of an 8-digit basket provision such a subheading “automatically remains a basket residual provision, and substitution is prohibited under 19 U.S.C. § 1313(j)(5)[A].” In this case, ITM states that the diamonds at issue are classifiable under the 8-digit subheading 7102.39.00, HTSUS: Nonindustrial: 7102.39.00 Other . . . . . 7102.39.0010 Weighing not over 0.5 carat each . . . . . 7102.39.0050 Weighing over 0.5 carat each . . . . . Looking to the adjacent text appearing on the same line and level for this subheading, we find that the article description at the 8-digit level begins with the word “Other.” Although the 8-digit subheading is preceded by the term “Nonindustrial” such unattached unifying language is merely prefatory language and is not part of the article description specific to the 8-digit subheading for drawback purposes. See Spirit Aerosystems, 680 F. Supp. 3d. at 1337-38; HQ H303399 (finding that the text “Other gas turbines” did not form part of the article description for subheadings 8411.81.80 and 8411.82.80, HTSUS). Unlike the turbines in HQ H303399, diamonds classifiable under subheading 7102.29.00, HTSUS, can be further subdivided into 10-digit SRNs: 7102.139.0010 and 7102.39.0050. The text directly adjacent to, and appearing on the same line and level, for each of these SRNs begins with the word “Weighing.” We thus find that the article descriptions for both of these 10-digit SRNs does not begin with the word “Other.” Imported and substituted diamonds which share a classification at the 8-digit level under subheading 7102.39.00, HTSUS, are subject to the “Other Other” Rule because the article description for this subheading begins with the word “Other.” Such diamonds are ineligible for substitution unused merchandise drawback unless the two criteria specified in 19 U.S.C. § 1313(j)(5)(B) are satisfied. Subheading 7102.39.00, HTSUS, is further subdivided into 10-digit SRNs: 7102.139.0010 and 7102.39.0050. The article description for these SRNs does not begin with the word “Other.” Accordingly, we find that imported and substituted diamonds which share 4

a classification at the 10-digit level under either of these SRNs satisfy both criteria under 19 U.S.C. § 1313(j)(5)(B) and are thus eligible for substitution unused merchandise drawback under § 19 U.S.C. § 1313(j)(2). HOLDING Based on the above, we find that diamonds which are classifiable at the 8-digit level under subheading 7102.39.00, HTSUS, are not precluded from substitution unused merchandise drawback pursuant to 19 U.S.C. § 1313(j)(5) if they share a classification at the 10-digit level under SRN 7102.139.0010 or 7102.39.0050 of the HTSUS. Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is used on the assumption that all the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by [CBP] to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.”
Sincerely,
Kristina Frolova, Chief Entry Process & Duty Refunds Branch 5