CLA-2 RR:TC:TE 958959 GGD
4817.10.0000; 4820.10.4000; 4901.10.0040
4909.00.2000; 4911.10.0080; 4911.99.8000
8470.10.0040
Mr. Robert P. Schaffer
De Angelus, Schaffer & Associates
1455 Pennsylvania Avenue, N.W.
Suite 1150
Washington, D.C. 20004
RE: "ParentBanc" Educational Articles
Dear Mr. Schaffer:
This letter is in response to your request of November 3,
1995, on behalf of your client, ParentBanc, Inc., concerning the
classification under the Harmonized Tariff Schedule of the United
States Annotated (HTSUSA), of articles identified as
"ParentBanc," "ParentBanc Jr.," "ParentBanc Deluxe," and
"ParentBanc Checkbook Refill Kit," all products of China.
Samples were submitted with your original request. Subsequent to
your original request and submission, a conference was held with
Headquarters personnel on July 12, 1996. An additional written
submission, dated July 22, 1996, and additional samples, have
been received and considered.
FACTS:
The ParentBanc articles are collections of items designed to
teach children - ages six to twelve - principles of money
management and personal record keeping skills. Parents act as
bankers and their children act as bank customers. A child's
allowance, gift money, earnings, etc., are entered as direct -2-
deposits on a check register without any money changing hands.
To obtain money, the child writes a check to the parent who, in
turn, provides the amount of money drawn on the account.
The first sample article, identified as "ParentBanc,"
consists of a trifold checkbook wallet, a wide-ruled check
register pad, two pads of nonnegotiable checks, a small
calculator, a paper photo identification (i.d.) card (with space
for important numbers and names), a clear plastic card holder,
and various pieces of nonlithographically printed literature,
including "Instructions for Children and Parents." The checkbook
wallet has a hook and loop closure and an outer surface of
plastic sheeting backed with a woven fabric. Its interior is
fitted to contain the check register, check pads, and the i.d.
card with holder. There are two additional card slots and an
interior flap pocket with hook and loop closure, in which coins
may be carried.
The sample identified as "ParentBanc Jr." consists of
components similar to those included in the "ParentBanc" article,
but it has different packaging, contains no trifold checkbook
wallet, and its calculator is of lower value. There is only one
pad of checks. The check pad and check register are fitted into
a checkbook cover of polyvinyl chloride (PVC) plastics.
The sample identified as "ParentBanc Deluxe" also consists
of components similar to those included in the "ParentBanc"
article, but it has different packaging and contains three pads
of checks, a higher quality calculator, a trifold wallet fitted
to carry cards and coins (but not check pads or calculator), and
a zippered carrying bag. The check pad and check register are
fitted into a PVC checkbook cover. Both the trifold wallet and
the carrying bag have an outer surface of cellular plastics
backed with a woven fabric.
The sample identified as the "ParentBanc Checkbook Refill
Kit" contains two check pads and a check register. Each of the
four "ParentBanc" articles is imported in a retail package that
is suitable for direct sale without repacking.
Excerpts from advertising and periodical literature
submitted indicate that "ParentBanc" articles are marketed and
described in a variety of ways, such as: "a fun and educational
product," "a wonderful teaching tool," "turns money management
into a game," "a way for kids to learn how to make wise decisions
about spending and saving," "an excellent tool for parents," and
"an excellent opportunity to confront money issues...early in a
manner that is fun for the kids as well as educational." The -3-
items are photographically depicted alongside toys and games on
the pages of catalogs including: JC Penney, F-A-O Schwarz, The
Great Kids Company, The Westbury Collection, and Miles Kimball.
ISSUES:
1) Whether the articles, which contain multiple components
that allow users to learn principles of money management and
personal record keeping skills, are designed principally for
amusement.
2) Whether the articles constitute sets for classification
purposes.
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with
the General Rules of Interpretation (GRI). GRI 1 provides that
the classification of goods shall be determined 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 GRI may then
be applied. The Explanatory Notes (EN) to the Harmonized
Commodity Description and Coding System, which represent the
official interpretation of the tariff at the international level,
facilitate classification under the HTSUS by offering guidance in
understanding the scope of the headings and GRI.
Heading 9503, HTSUS, provides for "Other toys...and
accessories thereof," 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 indicate that
a toy is an article designed for the amusement of children or
adults. The EN to heading 9503 indicate that certain toys,
including toy arms, tools, gardening sets, tin soldiers, etc.,
are often put up in sets, and that collections of items
separately classifiable in other headings are classified in
chapter 95 when put up in a form clearly indicating their use as
toys (e.g., instructional toys such as chemistry sets, sewing
sets, etc.).
The recently added "Subheading Explanatory Note to
Subheading 9503.70" states in pertinent part that: -4-
for the purpose of this subheading: "sets" are two or more
different types of articles (principally for amusement), put
up in the same packing for retail sale without repacking.
Simple accessories or objects of minor importance intended
to facilitate the use of the articles may also be included.
You contend that the "ParentBanc" articles should be
classified as educational toy sets. In support of your position,
you cite to several Headquarters Ruling Letters (HQ), including
HQ 950700, issued August 25, 1993, HQ 957894, issued December 14,
1995, and HQ 958785, issued July 26, 1996.
In Headquarters Ruling Letter (HQ) 950700, issued August 25,
1993, we discussed the circumstances in which certain items may
be classified in subheading 9503.70, as toys put up in sets. The
case involved the classification of three multiple-component
articles - two of which were imported in two separate versions or
assortments. Neither assortment of the article identified as a
"Minnie N Me Looking Pretty Set" included a component that,
standing alone, would be classified as a toy. One version
consisted of a comb, necklace, sunglasses, and hairclip, and the
other was composed of a comb, necklace, mirror, and bracelet.
All the components bore a Minnie Mouse decoration.
We stated that the application of the toy set provision is
relatively straightforward when each item within a set would
individually be classified as a toy, but that a greater challenge
arises when the merchandise consists partly or (as in the
"ParentBanc" case) entirely of articles that, individually, would
be classified elsewhere in the tariff. It was noted that in
either instance, subheading 9503.70 encompasses a combination of
two or more mutually complementary, complete articles in a retail
package, the essential character of which is established by the
combination of the items (not by any individual item), and that
the components should generally be used together to provide
amusement. The facts that advertising was directed toward child-customers and that the goods were sold in toy stores, were not
deemed dispositive of either use or classification as toys. We
determined, however, that the "Minnie N Me" assortments were
designed and used principally for amusement. It was possible to
envision children mixing, matching, exchanging, etc., the
individual items in a temporary and playful manner. It was found
that, when put up together, the items were complementary and
worked together to provide amusement.
HQ 957894 involved the classification of an article
containing the materials needed to make temporary tattoos. The
retail package consisted of a combination carrying case/drawing -5-
surface, sheets of both tattoo designs and blank tattoo paper,
colored markers, a small water applicator bottle, and
instructions. Pursuant to GRI 3(b), the article was found to
comprise a set classifiable under heading 3926, HTSUS. It was
not classified in the toy set provision pursuant to GRI 1,
because the components were put up in a form to be primarily used
to trace, draw, cut, and transfer a tattoo image - not
principally to provide amusement.
In HQ 958785, this office classified a "Lean On Me" activity
bolster, which appeared to have a dual purpose, i.e., to function
as a pillow or cushion, and to provide amusement to a baby by
means of five separate toys attached to the bolster. We
concluded that the primary value of the item was its play value,
that its utilitarian aspect was temporary and incidental to the
amusement factor, and that the item was therefore a toy.
In this case, none of the separately classifiable components
of the "ParentBanc" articles is a toy. All of the components are
fully functional. Although they are put up in colorful packaging
which boldly states that "ParentBanc Is Easy, Fun and
Educational," we find that the items in combination are not
clearly indicated for use as toys. The type of interplay that
was probable among the "Minnie N Me" components above is not
present. Unlike the items that composed "Tattoo Graphix," the
combination of "ParentBanc" items put up together does not
indicate a specific activity that, when engaged in, would yield
an end product such as a tattoo. It is likely that amusement
will, to some degree, be a byproduct of using "ParentBanc"
articles, but any amusement factor is incidental to the
utilitarian or instructional aspect. As is indicated by the non-toy classification of "Tattoo Graphix," not all merchandise that
provides amusement is a toy. We thus find that the "ParentBanc"
articles are not designed principally for amusement, but as tools
to help parents teach children valuable skills, regardless of the
extent to which the process amuses the participants.
The articles are not classified in subheading 9503.70,
HTSUS, and cannot be classified by reference to GRI 1 because the
individual components are classifiable in several different
headings, i.e., headings 8470 (calculators), 4820 (check pads and
register pads), 4817 (envelopes), 4202 (flatgoods), and 4911,
4909, and 4901 (printed inserts). -6-
In pertinent part, GRI 2(b) states that:
The classification of goods consisting of more than one
material or substance shall be according to the
principles of rule 3.
GRI 3(a) states, in pertinent part, that:
when two or more headings each refer to part only of
the materials or substances contained in mixed or
composite goods or to part only of the items in a set
put up for retail sale, those headings are to be
regarded as equally specific in relation to those
goods, even if one of them gives a more complete or
precise description of the goods.
Therefore, to determine under which provision the articles may be
classified, we look to GRI 3(b), which states in pertinent part
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.
With respect to whether the components of the "ParentBanc"
articles constitute "goods put up in sets," we look for guidance
to Explanatory Note X to GRI 3(b), which indicates that for
purposes of the rule, the term "goods put up in sets for retail
sale" means goods which:
(a) consist of at least two different articles which are
prima facie, classifiable in different headings;
(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).
As previously found, the subject articles meet criteria (a)
and (c). With regard to criterion (b), it was previously
indicated that the combination of "ParentBanc" items put up
together does not carry out a specific activity. Each item is -7-
used in an ongoing program involving parent and child that may
instill an understanding of where money comes from, and develop
control over when and where it is spent. We do not find that the
process meets a particular need or carries out a specific
activity. Therefore, the "ParentBanc" articles do not comprise
sets and must be classified in the subheadings applicable to the
individual items.
HOLDING:
The components comprising the articles identified as
"ParentBanc," "ParentBanc Jr.," "ParentBanc Deluxe," and
"ParentBanc Checkbook Refill Kit," are separately classifiable
under the specific subheadings provided below:
The trifold wallet and the trifold checkbook wallet are
classified in subheading 4202.32.1000, HTSUSA, the provision
for "Articles of a kind normally carried in the pocket or in
the handbag: With outer surface of sheeting of plastic or of
textile materials: With outer surface of sheeting of
plastic: Of reinforced or laminated plastics." The
applicable rate of duty is 12.1 cents per kilogram plus 4.6
percent ad valorem.
The clear plastic identification card holder is
classified in subheading 4202.32.2000, HTSUSA, the provision
for "Articles of a kind normally carried in the pocket or in
the handbag: With outer surface of sheeting of plastic or of
textile materials: With outer surface of sheeting of
plastic: Other." The applicable rate of duty is 20 percent
ad valorem.
The zippered carrying bag is classified in subheading
4202.92.4500, HTSUSA, the provision for "Travel, sports and
similar bags: Other." The applicable rate of duty is 20
percent ad valorem.
The envelope for refill orders is classified in
subheading 4817.10.0000, HTSUSA, the provision for
"Envelopes...of paper or paperboard...: Envelopes." The
applicable rate of duty is 3.2 percent ad valorem.
The nonnegotiable check pads and check register pads
(including PVC fitted checkbook covers) are classified in
subheading 4820.10.4000, HTSUSA, the provision for
"Registers, account books, notebooks, order books, receipt
books, letter pads, memorandum pads, diaries and similar
articles: Other." The applicable duty rate is free. -8-
The printed leaflet entitled "How To Use ParentBanc" is
classified in subheading 4901.10.0040, HTSUSA, the provision
for "Printed books, brochures, leaflets and similar printed
matter, whether or not in single sheets: In single sheets,
whether or not folded, Other." The applicable rate of duty
is free.
The printed product registration card which states
"Thank You For Purchasing...." is classified in subheading
4909.00.2000, HTSUSA, the provision for "Printed or
illustrated postcards; printed cards bearing personal
greetings, messages or announcements, whether or not
illustrated, with or without envelopes or trimmings:
Postcards." The applicable rate of duty is 3.2 percent ad
valorem.
The printed leaflet entitled "Children Love To See
Their Name In Print" is classified in subheading
4911.10.0080, HTSUSA, the provision for "Other printed
matter, including printed pictures and photographs: Trade
advertising material, commercial catalogs and the like,
Other." The applicable rate of duty is free.
The printed identification card is classified in
subheading 4911.99.8000, HTSUSA, the provision for "Other
printed matter, including printed pictures and photographs:
Other: Other: Other: Other." The applicable rate of duty is
3.9 percent ad valorem.
The battery-powered calculators are classified in
subheading 8470.10.0040, HTSUSA, the provision for
"Calculating machines...: Electronic calculators capable of
operation without an external source of electric power and
pocket-size data recording, reproducing and displaying
machines with calculating functions, Display only." The
applicable rate of duty is 2.9 percent ad valorem.
Sincerely,
John Durant, Director
Tariff Classification
Appeals Division