CLA-2 CO:R:C:F 953605 GGD
Ms. Laurie Everill
J.C. Penney Purchasing Corporation
Post Office Box 10001
Dallas, Texas 75301-0001
RE: "Bag of Blocks;" Composite Article with Components from
China and Israel
Dear Ms. Everill:
This letter is in response to your inquiry of February 8,
1993, concerning the classification under the Harmonized Tariff
Schedule of the United States Annotated (HTSUSA), of an article
identified as a "Bag of Blocks." The bag will be imported from
China and the blocks from Israel. A sample article was submitted
with your inquiry.
FACTS:
The sample submitted to this office, identified by foreign
supplier's item no. 51190, consists of a textile drawstring bag
containing 120 variously shaped blocks of injected, molded
plastic. The bag and drawstring are comprised of 100 percent
cotton woven materials. When flat, the bag measures
approximately 10-1/2 inches in width by 13-1/2 inches in height.
The bag will be manufactured in China, then purchased and
imported into Israel by the Israeli block manufacturer, who will
screen print the bag with the words "BAG OF BLOCKS." The Israeli
manufacturer will insert the blocks into the bag and package the
article for retail sale in the U.S.
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ISSUES:
1) Whether the article should be classified in heading 9503,
HTSUSA, the provision for other toys; or in heading 6307, HTSUSA,
as an other made up article of textile.
2) Whether the article is entitled to duty-free treatment
under the United States-Israel Free Trade Area Implementation Act
of 1985.
LAW AND ANALYSIS:
Classification under the HTSUSA is made in accordance with
the General Rules of Interpretation (GRIs). The systematic
detail of the harmonized system is such that virtually all goods
are classified by application of GRI 1, that is, according to the
terms of the headings of the tariff schedule and any relative
Section or Chapter Notes. In the event that the goods cannot be
classified solely on the basis of GRI 1, and if the headings and
legal notes do not otherwise require, the remaining GRIs may then
be applied. The Explanatory Notes (ENs) to the Harmonized
Commodity Description and Coding System, which represent the
official interpretation of the tariff at the international level,
facilitate classification under the HTSUSA by offering guidance
in understanding the scope of the headings and GRIs.
Heading 9503, HTSUSA, applies to "other toys," i.e., all
toys not specifically provided for in the other headings of
chapter 95. Although the term "toy" is not defined in the
tariff, the EN to chapter 95 indicates that a toy is an article
designed for the amusement of children or adults. The ENs to
heading 9503 indicate that, among other toys, the heading covers
"[c]onstructional toys (construction sets, building blocks,
etc.)."
In this case, the article consists of two components, i.e.,
plastic blocks and a textile bag. Each component is classifiable
in a different heading; the blocks in heading 9503, HTSUSA, and
the bag in heading 6307, HTSUSA. Since the goods cannot be
classified by reference to GRI 1, we look to GRI 2(b), which in
pertinent part states that:
[t]he classification of goods consisting of more than
one material or substance shall be according to the
principles of rule 3.
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GRI 3(a) directs that the headings are regarded as equally
specific when each heading refers to only part of the materials
contained in mixed or composite goods. Therefore, to determine
under which provision the article will be classified, we look to
GRI 3(b), which states that:
[m]ixtures, composite goods consisting of different
materials or made up of different components...which
cannot be classified by reference to 3(a), shall be
classified as if they consisted of the material or
component which gives them their essential character,
insofar as this criterion is applicable.
Explanatory Note VIII to GRI 3(b) provides the following guidance
concerning the essential character determination:
The factor which determines essential character
will vary as between different kinds of goods. It
may, for example, be determined by the nature of
the material or component, its bulk, quantity,
weight or value, or by the role of a constituent
material in relation to the use of the goods.
Mindful that the textile bag functions merely to transport
and store the blocks (the latter clearly also the component of
greater value), we find that the plastic blocks provide the
essential character of the whole article. The "Bag of Blocks" is
properly classified in subheading 9503.30.40, HTSUSA, the
provision for "Other toys...and accessories thereof: Other
construction sets and constructional toys, and parts and
accessories thereof: Toy building blocks, bricks and shapes." In
accordance with Headquarters Ruling Letter (HRL) 086297, issued
January 26, 1990, we note that textile articles classified in
Chapter 95, HTSUSA, by application of GRI 3(b), are not subject
to separate visa requirements or quota restraint levels.
With respect to the eligibility of the goods for duty-free
treatment, we note that pursuant to General Note 3(c)(vi)(A),
HTSUSA, products of Israel imported into the customs territory of
the U.S. and entered under a provision for which a rate of duty
appears in the "Special" subcolumn followed by the symbol "IL" in
parentheses, are eligible for the tariff treatment set forth in
the subcolumn, in accordance with section 4(a) of the United
States-Israel Free Trade Area Implementation Act of 1985 (99
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Stat. 82). However, General Note 3(c)(vii)(B), HTSUSA, states
that imported goods are eligible for treatment as "products of
Israel" only if--
(1) each article is the growth, product or manufacture
of Israel or is a new or different article of
commerce that has been grown, produced or
manufactured in Israel;
(2) each article is imported directly from Israel into
the customs territory of the United States; and
(3) the sum of--
(I) the cost or value of the materials produced
in Israel plus
(II) the direct costs of processing operations
performed in Israel, is not less than 35
percent of the appraised value of each
article at the time it is entered.
In light of the fact that the article's textile bag
component is a product of China, and that this component is not
substantially transformed into a different item by its being
screen printed in Israel, it is our determination that the
composite article is not eligible for duty-free treatment.
HOLDING:
Supplier's item no. 51190, identified as a "Bag of Blocks,"
is properly classified in subheading 9503.30.40, HTSUSA, the
provision for "Other toys...and accessories thereof: Other
construction sets and constructional toys, and parts and
accessories thereof: Toy building blocks, bricks and shapes."
The general column one rate of duty applicable to this
merchandise is 6 percent ad valorem.
Because the entire imported article is not a product of
Israel, in accordance with the statutory requirements of the
United States-Israel Free Trade Area Implementation Act of 1985,
neither the article nor its components is entitled to duty-free
treatment.
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The issue as to the country of origin/marking of this
article has been referred to the Value and Marking Branch. A
response will be provided to you under separate cover.
Sincerely,
John Durant, Director
Commercial Rulings Division