Fossil Watch Dependence on Bluetooth for Timekeeping Makes for Smartwatch Classification, CBP Says

Fossil watches that are dependent on a Bluetooth connection to a smartphone for timekeeping are best classified based on the radio transceiver, CBP said in an April 30 ruling. CBP issued ruling HQ H282905 in response to a tariff classification ruling request from Grunfeld Desiderio. Unlike this ruling, CBP has previously said that the watch function of wristwatches is determinative of the classification, even if the watch has Bluetooth capabilities (see 1606280030). On the other hand, a 2015 CBP ruling found that the essential character of smartwatches is based upon the radio transceiver that makes Bluetooth connections possible (see 1508050029).

The Fossil Q Hybrid Smartwatch lacks mechanical or quartz watch movements and instead uses the watch's Bluetooth connection to set the time, CBP said. Before a Bluetooth connection is made, "the watch hands are completely inactive; not only are they unmoving, but they cannot be actuated or manually adjusted by the user," CBP said. "Consequently, at the time they are entered, Fossil Qs cannot actively keep time."

Once the watch is paired via Bluetooth to a mobile device, the time is automatically synchronized, CBP said. "From that point forward, the Fossil Q autonomously keeps the time of that zone throughout any interruptions to the connection with the mobile application," CBP said. "However, even following initial synchronization, the time cannot be adjusted manually by the user. Instead, any adjustments to the watch hands -- based, for example, on a change in time zone -- are orchestrated automatically by the mobile application." The user can also program the watch buttons for other Bluetooth-enabled functions, such as displaying social media alerts or text messages.

CBP has "viewed timekeeping capability and physical resemblance to traditional analog watches of heading 9102, HTSUS [Harmonized Tariff Schedule of the U.S.], as factors that are highly probative of the articles’ essential character," the agency said. In this case, the Bluetooth transceiver "proves to be both an indispensable component and the component which plays the greatest role with relation to the article’s use," the agency said in its ruling. "This is because the data transmission and reception conducted by the transceiver is an absolute prerequisite to the article’s above-mentioned use as a timekeeping device, or as anything else of utilitarian value."

As a result, the watches are best classified based on the radio transceiver in the duty-free subheading of 8517.62.00, CBP said. "Since the Fossil Qs lack quartz or mechanical watch movements, they cannot be initially set or subsequently updated absent reception of data," the agency said. "Thus, in their condition as imported, they look like -- but do not act as -- wristwatches."