TC09362 - [2024] UKFTT 001071 (TC)

Wetsuits are made from synthetic rubber which was produced in the 1930s. The principle has not changed since the 1950s, except that where petroleum oil was once used, the constituent materials are now mined.

Neoprene is rubber that is produced by polymerisation of chloroprene. The neoprene is baked in an oven to effectively impregnate the rubber with bubbles, to give it insulation. This creates a block of neoprene foam. The neoprene block taken out of the oven is then sliced into varying thickness (typically between 2mm and 6mm), depending on the degree of insulation required. Fabric is then glued to one or both sides of the sliced neoprene, which is then single or double-sided (i.e., the lining). Partial lining is used for ultimate efficiency and warmth. The air bubbles in the foam create insulation and a barrier.

Single-sided wetsuits are more efficient and are easier to put on and take off due to the internal lining. Double-sided wetsuits are laminated with fabric to ease putting on and taking off the wetsuit, with the external textile layer providing protection from abrasive surroundings whilst wearing the wetsuit. Some wetsuits are a combination of both, as is the case with the Wetsuits under consideration. The disadvantage of the fabric coating is weight, which reduces durability.

The internal area of the Wetsuits relevant to this appeal is fully lined and the external area has panels on the whole suit, except the chest area and the lower back, which have pure neoprene to the exterior surfaces but lining to the interior surface.

The Wetsuits are comprised of panels made of neoprene, with textile layers. The textile layers are 90% polyester and 9% to 10% spandex. The panels are sewed or glued together. There are only two lined panels on a single-sided wetsuit (to the chest and lower back areas). The figures included in the Table setting out the metrics of wetsuits refer to the thickness of the Wetsuits.

The percentage of neoprene used depends on the thickness of the wetsuit. It could be 70% neoprene and 30% textile, or 65% neoprene and 35% textile.

Children’s wetsuits are made up of 12 to 15 panels and adult wetsuits are made up of up to 30 panels. The Wetsuits relevant to this appeal are made up of 15 to 20 panels. The Wetsuits have neoprene only in the areas covering certain parts of the torso (chest and lower back).

The starting point in any classification must be the Tariff Notes relevant to the product under consideration. In the circumstances of this appeal, the relevant Notes are those that relate to Heading 4015, as this is prima facie, where the Wetsuits fall to be classified.

The primary material used in the manufacture of the Wetsuits is neoprene, which is then covered on one side or both sides with textile. The textile covering the outer surface of the Wetsuits is for reinforcement purposes only, as the neoprene has a propensity to tear. The optional textile covering on the inner surface exists to provide a degree of additional comfort and is not essential to the function of the Wetsuits.

The overriding consideration when assessing “essential character” must be the roles of the constituent materials in relation to the use of the Wetsuits. The function of the Wetsuits is to keep the wearer warm in cold water and it is only the neoprene that achieves this. On this basis alone, the Wetsuits must be classified under Heading 4015.

In accordance with Note 3 of the GIRs, “articles of rubber” with textile coverings must be classified according to their essential character. The term “essential character” is only used in conjunction with rule 3(b) of the GIRs and it follows that Note (3) of the HSENs to Heading 40.15 precludes classification of the Wetsuits under rule 1 and rule 6 of the GIRs.

Classification must fall to the material that enables the Wetsuits to fulfil their primary purpose; that is to keep the wearer warm in cold water. It is the neoprene alone that performs this function. The Wetsuits must be classified as “an article of apparel of vulcanised rubber”, under Heading 4015 of the UK Tariff.

The Binding Tariff Information (‘BTI’) showed that the United Kingdom previously issued rulings for double-sided wetsuits under Heading 6113, with the means of classification listed as rule 1 and rule 6 of the GIRs (without recourse to rule 3(b)), and the Notes in Headings 59.06 and 40.08 of the HSENs.

Categorising the material composition of the Wetsuits as “rubberised textile” would be misguided.

The European Regulation begins by referring to Chapter 59, in order to classify the material that the Wetsuits are made from, and not the Wetsuits themselves. Having established, by reference to Note 5 to Chapter 59 and the additional Notes in Heading 40.08, the European Regulation then proceeds to state that a wetsuit made with textile must be classified as an “article of textile” under Heading 59.06 on the basis that the textile covering “constitutes more than just reinforcement”. This then gives rise to the result that wetsuits must be classified as an “article of apparel of textile” under Heading 6113 of the UK Tariff. An unworked piece of fabric is, however, different from a finished article such as a wetsuit.

The Notes to Chapter 59 show that the Heading does not apply to sheets or strips of cellular rubber combined with textile fabric where the textile is present merely for reinforcing purposes. The limiting nature cannot, therefore, be used as a basis for classifying a wetsuit under rule 1 and rule 6 of the GIRs as it is clear that the scope of the Note does not extend to finished articles. The European Regulation seeks to bypass this problem by referring to rule 3(b) of the GIRs, which can only be engaged when it is not possible to classify a product under rule 1 and rule 6 of the GIRs. The effect of rule 3(b) is to render all Tariff Notes redundant.

The term “essential character” is inextricably linked to rule 3(b) and can only be considered in accordance with the HSENs. The Notes to Heading 40.08 become redundant once rule 3(b) is engaged.

The Tribunal in Sola Wetsuits rightly concluded that the scope of Heading 40.08 did not extend to products that, prima facie,fall within Heading 40.15.