In a decision issued July 30, 2026, the U.S. Court of Appeals for the Federal Circuit affirmed that ten models of Richard Mille luxury wristwatches imported from Switzerland were properly classified under HTSUS heading 9102 rather than the lower-duty heading 9101. The full opinion in Ildico Inc. v. United States, No. 2025-1337, is available here.
Background: gold cases with a window to the movement
Richard Mille watches are made in Switzerland, and Ildico Inc. is their exclusive U.S. importer and distributor. The ten models at issue feature 18-karat gold cases fitted with transparent synthetic sapphire crystal windows on both the front and the back. The front crystal lets the wearer read the dial; the rear crystal reveals the movement while protecting the internal components from debris and moisture. After a 2016 Customs audit, CBP reclassified the watches from heading 9101 to heading 9102, and Ildico's protests and its challenge before the Court of International Trade were both unsuccessful.
The classification question
Chapter 91 of the HTSUS covers clocks, watches, and parts thereof. Heading 9101 covers wristwatches with a case of precious metal, while heading 9102 covers wristwatches other than those of heading 9101. Critically, Chapter Note 2 provides that heading 9101 covers only watches with a case wholly of precious metal. The HTSUS defines wholly of to mean composed completely of the named material except for negligible or insignificant quantities of other materials. The entire dispute therefore turned on a single question: does the sapphire crystal window on the back of each watch prevent the case from being wholly of precious metal?
The Federal Circuit's holding
The court, in an opinion by Judge Bryson, held that the sapphire crystal back is part of the watch case. Because the case is made of 18-karat gold plus a non-precious sapphire crystal window, it is not wholly of precious metal, and the watches fall under heading 9102. The court affirmed the Trade Court and did not need to resolve whether the crystal back is technically a watch glass; even if it were, it is still part of the case.
The reasoning rested on the structure and function of the case. The court distinguished the front crystal, which merely covers the dial and is not part of the case, from the rear crystal, which closes and completes the housing and protects the movement. Under Additional U.S. Note 1(b), a case includes the housings and the parts that serve to complete the watch, and the Explanatory Notes to heading 9111 confirm that watch cases may be of any material and that the bottom of the watch, the part that closes it opposite the glass, is part of the case. The rear crystal thus forms the bottom of the case.
Arguments the court rejected
Ildico argued that because Chapter Note 1(a) excludes watch glass from Chapter 91, the crystal back had to be disregarded, leaving a case that was otherwise wholly of gold. The court rejected this: excluding watch glasses when they are imported separately does not mean they can be ignored when deciding whether an assembled watch case is wholly of precious metal. The court also found no absurdity in the fact that an identical crystal might be classified differently depending on whether it is imported separately or as part of a complete watch. Ildico's alternative theory, that synthetic sapphire is a precious stone that heading 9101 permits when combined with precious metal, was deemed waived because it was raised only in a footnote and in the reply brief.
Practical takeaways for importers
The decision is a reminder that for luxury and precious-metal goods, exhibition backs, display windows, and other non-metal structural elements can change the tariff classification and the duty rate. Where a case is not composed entirely of precious metal, heading 9101 is unavailable and the higher heading 9102 rates apply. Importers of high-value watches and similar articles should evaluate every structural component of the case, not just the dominant material, and should preserve all classification arguments fully in the trial court, since arguments raised only in footnotes or reply briefs may be treated as waived on appeal.
If you have questions about how this decision may affect the classification of your watches or other precious-metal goods, please contact our office.