CLA-2 CO:R:C:T 953916 ch
Guillermo Zuniga, Jr.
Gee Zee Squared Co., Inc.
1902 Jefferson Street
Laredo, Texas 78040
Re: Classification, country of origin marking requirements,
applicability of subheading 9801.00.10 to a stationery
kit; set; essential character; household article.
Dear Mr. Zuniga:
This is in response to your letter of March 17, 1993,
regarding tariff classification, applicability of subheading
9801.00.10 and country of origin marking requirements, under the
Harmonized Tariff Schedule of the United States Annotated
(HTSUSA), for certain stationery kits packaged in Mexico. A
sample was provided to this office for examination.
FACTS:
Various items will be shipped from the U.S. to Industrias
Diza S.A. de C.V. in Mexico. These items are as follows: 20
stationery sheets, 10 blank sheets, 10 note cards, 30 envelopes,
shredded paper (all of which are U.S.-origin), a tin marked
"Container Made in Korea" on the bottom, and a ball point pen
marked "Taiwan" on the clip. In Mexico, the stationery sheets,
the blank sheets, the note cards, and the envelopes will each be
shrink-wrapped and placed in the open tin along with the shredded
paper and pen. This open tin with its contents will be shrink-
wrapped and shipped back to the U.S. to be sold at the retail
level as a stationery kit. The shrink wrap around the tin will
be labeled "Made in the U.S.A." The individual shrink wrapped
items (i.e., U.S.-origin paper) may be labeled with the proper
country of origin. You allege that the stationery kit may be
brought back into the U.S. as American Goods Returned.
In an oral communication with this office, you indicated
that the lidded tin was comprised of steel (not stainless).
ISSUES:
I. What is the proper tariff classification for the
stationery kit?
II. Whether the stationery kit, or any part thereof, will
be entitled to duty-free treatment under subheading
9801.00.10, HTSUSA, when returned to the U.S.?
III. Whether the items comprising the stationery kit must be
marked to indicate their country of origin?
LAW AND ANALYSIS:
Classification
Classification of goods under the HTSUSA is governed by the
General Rules of Interpretation (GRI). GRI 1 provides that
classification is determined first in accordance with the terms
of the headings of the tariff and any relative section or chapter
notes. Where goods cannot be classified on the basis of GRI 1,
the remaining GRI will be applied in order.
The stationery kit is comprised of several finished articles
that have been packaged together. No single tariff heading
describes this unit as it has been packaged (Cf. boxes of paper
or paperboard, containing an assortment of paper stationery,
classifiable under subheading 4817.30.0000). Therefore, we must
resort to the remaining GRI.
GRI 3(b) states that:
Mixtures, composite goods consisting of different
materials or made up of different components, and goods
put up in sets for retail sale, 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. (Emphasis added).
Hence, if the stationery kit qualifies as "good put up in sets
for retail sale," it shall be classified as if it is composed
entirely of the component which lends its essential character.
The Explanatory Notes (EN) to the Harmonized Commodity
Description and Coding System constitute the official
interpretation of the nomenclature at the international level.
While not legally binding, they do represent the considered views
of classification experts of the Harmonized System Committee. It
has therefore been the practice of the Customs Service to follow,
whenever possible, the terms of the EN when interpreting the
HTSUSA.
Note X to the EN for GRI 3(b), at page 4, provides that:
For the purposes of this Rule, the term "goods put up
in sets for retail sale" shall be taken to mean goods
which:
(a) consist of at least two different articles
which are, prima facie, classifiable in
different headings. Therefore, for example,
six fondue forks cannot be regarded as a set
within the meaning of this Rule;
(b) consist of products or articles put up
together to meet a particular need or carry
out a specific activity; and
(c) are put up in a manner suitable for sale
directly to users without repacking (e.g., in
boxes or cases or on boards).
In this case, the stationery kit is comprised of various
articles that are classifiable in different headings of the
tariff schedule. The kit gathers in one place all of the
implements necessary for the need or activity of drafting and
mailing personal correspondence. Finally, the materials have
been packaged together for sale directly to consumers.
Therefore, the kit qualifies as a "set" for classification
purposes, and shall be classified as if comprised solely of the
component which lends its essential character.
In prior rulings, we have concluded that the container
provides the essential character to substantially similar kits or
sets. See Headquarters Ruling Letter (HRL) 088323, dated June 7,
1991 (Pencil box containing pens, pencils, ruler and sharpener
classified as a set, with the container providing its essential
character); HRL 087026, dated July 24, 1990 (Pencil pouch
containing pencil, ruler and eraser classified as a set, with the
pouch lending its essential character); HRL 086774, dated July
17, 1990 (Stationery and pencil boxes containing various items
classified as a set, with the container providing their essential
character); HRL 084715, dated August 24, 1989 (Stationery kit
containing pencils, sharpener, eraser, clips and stencils
classified as a set, with the plastic box providing essential
character). In these decisions, the container imparted the
essential character to the set when it possessed one or more of
the following features:
1. it comprised a substantial portion of the bulk and
value of the set;
2. was suitable for repeated use (even after the writing
implements and paper were used);
3. served a decorative or useful purpose that played an
essential role in the marketing of the kit;
4. was designed specifically and carefully for its
particular use.
The relative importance of these features will vary on a case-
by-case basis.
In this case, the steel container features an attractive
floral motif and is constructed of a material suitable for
prolonged use. In addition, it comprises a significant part of
the bulk and value of the set as a whole. On this basis, we
conclude that the steel container provides the essential
character of the stationery kit.
Containers are classifiable under several tariff headings.
Heading 4202, HTSUSA, encompasses:
Trunks, Suit-Cases, Vanity-Cases, Executive-Cases,
Briefcases, School Satchels, Spectacle Cases, Binocular
Cases, Camera Cases, Musical Instrument Cases, Gun
Cases, Holsters and Similar Containers; Travelling-
Bags, Toilet Bags, Rucksacks, Handbags, Shopping-Bags,
Wallets, Purses, Map-Cases, Cigarette-Cases, Tobacco-
Pouches, Tool Bags, Sports Bags, Bottle-Cases,
Jewellery Boxes, Powder-Boxes, Cutlery Cases and
Similar Containers, of Leather or of Composition
Leather, of Sheeting of Plastics, of Textile Materials,
of Vulcanised Fibre or of Paperboard, or Wholly or
Mainly Covered with Such Materials or With Paper.
(Emphasis added).
By its terms, heading 4202 is limited to the articles enumerated
and containers similar thereto. Moreover, this heading is
divided into two parts by a semi-colon. Containers of the second
part must be of or covered with the materials listed therein. On
the other hand, containers of the first part may be of any
material.
Stationery boxes are not specifically enumerated in heading
4202. In addition, the instant merchandise is composed of steel,
which is not a material of the second part of this heading.
Therefore, in order for the stationery box to be classified under
heading 4202 it must be similar to containers of the first part
of the heading.
In this case, the stationery box appears to be designed for
use as a decorative holder in the home. As the first part of
heading 4202 does not appear to include household articles, the
stationery tin is not a container similar to these exemplars.
Accordingly, heading 4202 is inapplicable.
Chapter 73 governs the classification of steel articles.
Heading 7310 provides for certain boxes, of a capacity not
exceeding 300 liters. However, the EN to heading 7323, at page
1022, provide, in pertinent part, that:
This heading also excludes:
* * *
(b) Biscuit barrels, tea caddies, sugar tins and
similar household or kitchen containers and
canisters (heading 73.23).
Heading 7323 provides for table, kitchen or other household
articles. The EN to this heading state, at page 1035, that it
includes inter alia:
Other household articles such as wash coppers and
boilers; dustbins, buckets, coal scuttles and hods;
watering-cans; ash-trays; hot water bottles, bottle
baskets; movable boot-scrapers; stands for flat irons;
baskets for laundry, fruit vegetables, etc.; letter-
boxes; clothes-hangers, shoe trees; luncheon boxes.
The myriad of miscellaneous household articles which the EN
provide for lead us to the conclusion that the scope of this
heading is broad enough to include stationery kits. Accordingly,
the subject merchandise is classifiable under heading 7323.
Subheading 9801.00.10, HTSUSA
Subheading 9801.00.10, HTSUSA, provides for the free entry
of U.S. products that have been exported and returned without
having been advanced in value or improved in condition by any
process of manufacture or other means while abroad, provided the
documentary requirements of section 10.1, Customs Regulations (19
CFR 10.1), are met. In Superscope, Inc. v. United States, 727 F.
Supp. 629 (CIT 1989), the court found that glass panels of U.S.
manufacture that were exported, packaged with other foreign
components to make unassembled stereo cabinets, and then imported
into the U.S. as an entirety were not advanced in value or
improved in condition while abroad, but were merely repackaged.
Therefore, the court held that the glass panels were entitled to
duty free entry under item 800.00., Tariff Schedules of the
United States (TSUS) (the predecessor provision of subheading
9801.00.10, HTSUSA). Although the Superscope case concerned the
TSUS, not the HTSUSA, the decision is believed to be equally
applicable to similar situations arising under the HTSUSA, since
item 800.00, TSUS, and relevant Schedule 8, TSUS, headnotes were
carried over virtually unchanged into the HTSUSA.
In HRL 555624 dated May 1, 1990, we considered U.S.-
produced perfumes, toilet water, and lotion shipped in bulk to
France, where they were repackaged into sample pouches of foreign
origin. The pouches were composed of either polyethylene sheets
laminated to aluminum foil, or paper and polyethylene sheets
laminated to aluminum foil. Based upon United States v. John V.
Carr & Sons, Inc., 69 Cust. Ct. 78, C.D. 4377, 347 F. Supp. 1390
(1972), 61 CCPA 52, C.A.D. 1118, 496 F.2d 1225 (1974), where the
court stated that absent some alteration or change in the item
itself, the mere repackaging of the item, even for the purpose of
resale to the ultimate consumer, is not sufficient to preclude
the merchandise from being classified under item 800.00, TSUS,
the U.S. perfumes were not considered to have been advanced in
value or improved in condition for purposes of subheading
9801.00.10, HTSUSA, and as a result, were exempt from duty under
this tariff provision when returned to the U.S.
We therefore find that as in HRL 555624, shrink-wrapping the
U.S.-origin paper items (i.e., stationery sheets, blank sheets,
note cards, envelopes) with the pen, and placing these items with
the U.S.-origin shredded paper in a tin which itself is shrink-
wrapped, neither advances the paper items nor improves their
condition. The paper items are not being altered in any way, but
are merely being packaged for retail sale. Furthermore, pursuant
to the decision in Superscope, the mere packaging of the U.S.-
origin paper items with foreign items does not advance them in
value or improve their condition. Therefore, the U.S. paper
items are entitled to the duty exemption under subheading
9801.00.10, HTSUSA, assuming that the documentation requirements
of 19 CFR 10.1 are met and the district director of Customs at
the port of entry is satisfied that the paper items are, in fact,
of U.S. origin.
However, regarding the pen from Taiwan and the tin from
Korea which are sent from the U.S. to Mexico, U.S. Note 2,
Chapter 98, HTSUSA, provides: "in the absence of a specific
provision to the contrary, the tariff status of an article is not
affected by the fact that it was previously imported into the
customs territory of the U.S. and cleared through customs whether
or not duty was paid upon such previous importation." Therefore,
because they are foreign articles, they are not entitled to duty
free treatment under subheading 9801.00.10, HTSUSA.
Applicability of country of origin marking requirements
The marking statute, section 304, Tariff Act of 1930, as
amended (19 U.S.C. 1304), provides that, unless excepted, every
article of foreign origin (or its container) imported into the
U.S. shall be marked in a conspicuous place as legibly,
indelibly, and permanently as the nature of the article (or its
container) will permit, in such a manner as to indicate to the
ultimate purchaser in the U.S. the English name of the country of
origin of the article. Part 134, Customs Regulations (19 CFR
Part 134), implements the requirements and exceptions of
19 U.S.C. 1304. Section 134.1(b), Customs Regulations (19 CFR
134.1(b)), defines "country of origin" as the country of
manufacture, production or growth of any article of foreign
origin entering the U.S. Further work or material added to an
article in another country must effect a substantial
transformation in order to render such other country the "country
of origin."
Neither the HTSUSA nor the Customs Regulations contains any
provisions regarding the marking of sets, mixtures or composite
goods. The classification of a set or mixed or composite goods
in one HTSUSA subheading by reference to GRI 3(b) is not
determinative of the country of origin marking requirements of
the materials or components which comprise the set. Instead, the
general country of origin marking requirements apply with respect
to the items comprising a set.
According to T.D. 91-7, "if the materials or components are
not substantially transformed as a result of their inclusion in a
set or mixed or composite goods, then, subject to the usual
exceptions, each item must be individually marked to indicate its
own country of origin." However, where the marking of the
container will reasonably indicate the country of origin to the
ultimate purchaser, the container may be marked instead of the
individual articles. See 19 U.S.C. 1304(a)(3)(D) and 19 CFR
134.32(d).
Headquarters Ruling Letter 084935 dated August 23, 1989 (as
modified in HRL 086895 dated August 17, 1990), concerned the
proper classification and marking requirements applicable to a
"Pocket Gym" imported from Canada. The "Pocket Gym" consisted of
certain exercise equipment made in Canada, instruction sheets and
poster printed in Canada, and a nylon bag of Korean origin. It
was determined that the "Pocket Gym" qualified for classification
purposes under GRI 3(b). Therefore, as the essential character
of the merchandise was imparted by the exercise equipment, we
held that the "Pocket Gym" (including the nylon bag) was
classifiable in subheading 9506.91.0030, HTSUSA ("Other articles
and equipment for gymnastics,***"). With regard to marking,
however, we determined that the Canadian items should be marked
to indicate their Canadian origin and the nylon bag should be
marked "Made in Korea" since, for marking purposes, nothing was
done to the bag or the printed materials in Canada that would
change their country of origin.
In this case, the stationery kit items are not substantially
transformed by the shrink-wrapping operations. Therefore, the
tin and pen must be conspicuously, permanently and legibly marked
with their respective country of origins. Although the tin is
conspicuously marked on the bottom "Container Made in Korea" and
such marking is visible through the packaging, the marking on the
pen is partially obscured by the packaging. Therefore, the
packaging must be marked "Pen Made in Taiwan." The marking of
the tin with a visible exterior label placed on the shrink-
wrapped tin, which reads "Made in USA" is not acceptable because
the consumer may be led to believe that the entire set is made in
the U.S. In addition, the label has a U.S. address. To avoid
confusion, we will require that this label be changed to read
"Tin (or container) Made in Korea, Pen Made in Taiwan." The
country of origin must appear in close proximity and in
comparable size letters as the U.S. location. See 19 CFR 134.46.
With regard to the paper items, products of the U.S.
exported and returned are excepted from the general country of
origin marking requirements. See 19 CFR 134.32(m). This
provision applies if the U.S. products are returned without
having been substantially transformed abroad. In this case,
nothing is done to the paper items except packaging. Therefore,
the paper items are excepted from marking under 19 CFR 132.32(m).
Furthermore, it is indicated that a label which will read "Made
in USA" will be placed on the shrink-wrapped paper. The specific
use of the "Made in USA" label is regulated by the Federal Trade
Commission. While Customs has no objection if the label
indicates that the "Paper Items are Made in USA" (in addition to
the other required markings set forth above), we suggest that you
contact the Federal Trade Commission, Division of Enforcement,
located at 6th & Pennsylvania Avenue, N.W., Washington, D.C.
20500, for advice on the marking of the paper items.
HOLDING:
I. The stationery kit is classifiable under subheading
7323.99.9000, HTSUSA, which provides for table, kitchen
or other household articles: other: other: not
coated or plated with precious metal: other: other.
The applicable rate of duty is 3.4 percent ad valorem.
Due to the changeable nature of the statistical
annotation (the ninth and tenth digits of the
classification) and the restraint (quota/visa)
categories, you should contact the local Customs office
prior to importing the merchandise to determine the
current status of any import restraints or
requirements.
II. Based upon the information provided, the paper items
exported to Mexico where they will each be shrink-
wrapped and placed in an open tin which is shrink
wrapped, will not be advanced in value or improved in
condition as a result of these packaging operations;
therefore, the paper items will be entitled to duty-
free treatment under subheading 9801.00.10, HTSUSA,
provided the documentation requirements of 19 CFR 10.1
are met and the paper items are products of the U.S.
III. The stationery kit must be marked "Tin (or container)
Made in Korea, Pen Made in Taiwan" in a conspicuous
location on the outside of the kit in a manner which
will be conspicuous to the ultimate purchaser prior to
purchase. The country of origin marking must appear in
comparable size letters and in close proximity to the
U.S. references. The label which reads "Made in USA"
is inappropriate because it may cause the ultimate
purchaser to believe all the items were made in the
U.S. Furthermore, the "Made in USA" label is subject
to the requirements of the Federal Trade Commission.
However, Customs does not object if the label reads
"Paper Items Made in USA."
Sincerely,
John Durant, Director