CLA-2 RR:CR:GC 960279 MMC
Mr. Francis Brennan
De Angelus & Associates
1455 Pennsylvania Avenue, N.W.
Suite 1150
Washington, D.C. 20004
RE: HRL 958959 revoked; "ParentBanc" Educational Articles
Dear Mr. Brennan:
This is in reference to your February 6, 1997, request for
reconsideration of Headquarters Ruling Letter (HRL) 958959 dated
November 12, 1996, on behalf of ParentBanc Inc., concerning
articles known as "ParentBanc", "ParentBanc Jr.", "ParentBanc
Deluxe" and "ParentBanc Checkbook Refill Kit." In HRL 958959
you were advised that the articles did not meet the requirements
to be considered "toy sets" as provided for in the Harmonized
Tariff Schedule of the United States (HTSUS). As the
"ParentBanc," "ParentBanc Jr.," "ParentBanc Deluxe," and
"ParentBanc Checkbook Refill Kit," did not meet the toy set
definition you were directed to separately classify each
component of the various articles. Samples were submitted with
your original request. In preparing this decision, consideration
was given to the views expressed in the meeting held with
Headquarters personnel on June 24, 1997.
Pursuant to section 625(c)(1) Tariff Act of 1930 [19 U.S.C.
1625(c)(1)], as amended by section 623 of Title VI (Customs
Modernization) of the North American Free Trade Agreement
Implementation Act, (Pub. L. 103-182, 107 Stat. 2057, 2186),
notice of the proposed revocation of HRL 958959 was published, on
November 5, 1997, in the Customs Bulletin, Volume 31, Number 45.
No comments were received in response to the notice.
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
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 threefold checkbook wallet, a wide-ruled check
register pad, two pads of non-negotiable checks, a small
calculator, a paper photo identification (i.d.) card, a clear
plastic card holder, and various pieces of non-lithographically
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 has different packaging, contains no threefold 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 has different packaging and contains three pads of
checks, a higher quality calculator, a threefold 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 threefold 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
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 are considered "educational toys" for
tariff purposes.
2) Whether the articles constitute sets for classification
purposes.
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the
United States (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 tariff provisions under consideration are as follows:
9503 Other toys; reduced-size ("scale") models and
similar recreational models, working or not;
puzzles of all kinds; parts and accessories
thereof.
9505 Other toys; reduced-size ("scale") models and
similar recreational models, working or not;
puzzles of all kinds; parts and accessories
thereof
4202.31 Articles of a kind normally carried in the pocket
or in the handbag
4817 Envelopes, letter cards, plain postcards and
correspondence cards, of paper or paperboard;
boxes, pouches, wallets and writing compendiums,
of paper or paperboard, containing an assortment
of paper stationery
4820 Registers, account books, notebooks, order books,
receipt books, letter pads, memorandum pads,
diaries and similar articles
4901 Printed books, brochures, leaflets and similar
printed matter, whether or not in single sheets
4909 Printed or illustrated postcards; printed
cards bearing personal greetings, messages or
announcements, whether or not illustrated,
with or without envelopes or trimmings
4911 Other printed matter, including printed pictures
and photographs
8470 Calculating machines and pocket-size data
recording, reproducing and displaying machines
with calculating functions; accounting machines,
postage-franking machines, ticket-issuing machines
and similar machines, incorporating a calculating
device; cash registers
The term "toy" is not defined in the tariff. In
understanding the language of the HTSUS, the Explanatory Notes
(ENs) of the Harmonized Commodity Description and Coding System
may be utilized. The ENs, although not dispositive, or legally
binding, provide a commentary on the scope of each heading, and
are generally indicative of the proper interpretation of the
HTSUS. See, T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23,
1989). General ENs to Chapter 95 of the HTSUS state, in pertinent
part, that: "This Chapter covers toys of all kinds whether
designed for the amusement of children or adults...." EN 95.03
states, in pertinent part, that:
This heading covers:
(A) All toys not included in headings 95.01 and 95.02.
* * *
These include:
* * *
(17) Educational toys (e.g., toy chemistry, printing, sewing
and knitting sets).
* * *
Certain of the above articles (toy arms, tools, gardening
sets, tin soldiers, etc.) are often put up in sets.
* * *
Collections of articles, the individual items of which if
presented separately would be classified in other headings
in the Nomenclature, are classified in this Chapter when
they are put up in a form clearly indicating their use as
toys (e.g., instructional toys such as chemistry, sewing,
etc., sets).
* * *
You contend that the "ParentBanc" articles should be
classified as educational toy sets, pursuant to the application
of GRI 1, under heading 9503, HTSUS, or in the alternative as a
general set pursuant to the application of GRI 3.
The EN term "educational toy" was first introduced with the
adoption of the HTSUS in 1989. Prior to 1989, such articles were
not considered within the scope of the tariff term "toy." Such
articles were believed to be advanced in condition or "more than"
toys because they provided an element (education) other than
amusement.
Customs has identified a series of characteristics, which
are indicative, but not determinative of articles which are
considered "educational toys" classifiable in heading 9503,
HTSUS. The criteria were identified by examining the exemplars
provided in the ENs of educational toys and determining what
universal characteristics they had. Our examination indicated
that educational toys rely on or have:
1. self-learning: This characteristic incorporates the idea
that natural curiosity spurs continued use of the article.
2. creative imagination
3. trial and error: This characteristic manifests itself in
the inclusion of example instructions or experiments to
follow to create an end product. Such articles lack clear
positive reinforcement for the completion of the tasks
outlined.
4. independent play value: This characteristics
incorporates the idea that the article has play value
independent of any learning which may or may not occur when
using the article. We note that it has been Customs
experience that generally, for an article to have play value
independent of its educational feature, it must have some
form of manipulative play value.
Examples of articles which are considered "educational" toys for
tariff purposes include chemistry sets and most baby toys such as
activity quilts, busy boards, etc.
Chemistry sets are considered educational toys for tariff
purposes because a child's natural curiosity about the
combination of elements is what generally spurs the article's
use. Additionally, a child can use their own imagination or
knowledge to create different combinations of elements and view
different things with the various tools provided in a chemistry
set. Moreover, chemistry sets generally provide instructions
and experiments which may be followed. However, even if the
instructions are not followed and no science is learned, a child
can still manipulate the various articles, (microscope,
chemicals, petri dishes) to pretend he is a scientist. See HRL
083048 dated October 12, 1989, and 084927 dated September 20,
1989, classifying chemistry sets.
Additionally, articles such as rattles, crib mirrors, and
activity quilts are considered within the scope of the term
"educational toy" because they serve as basic tools to aid in
developing motor skills, sensory perception, hand-eye
coordination, crawling, sitting, reaching, etc. It is a baby's
natural curiosity about one of the above articles which spurs the
learning of the listed skills. Many of the listed toys require
the trial and error of discovering how to manipulate one of the
listed articles so that it initiates a sound (shaking a rattle).
Although the baby is learning he/she does not know that. They
are merely having fun discovering new things. See HRLs 083257
dated February 21, 1990, 088983 dated August 12, 1991, 956309
dated August 19, 1994, and 958785 dated July 26, 1996.
Not all articles with educational elements are considered
"educational toys" for tariff purposes. Articles which act
primarily as surrogate instructors are not considered educational
toys for tariff purposes. The act of surrogate instruction
involves the giving of instructions or asking of questions and
the confirmation of the correct answer. Such confirmation may
have an element of "positive reinforcement" such as a pleasant
sound verses a "sour" note. Unlike a child's own natural
curiosity in an educational toy, it is this positive
reinforcement which is offered to keep the child interested in
the process. Articles with educational elements create no end
product in and of themselves. It is the question/answer or
record keeping, etc., the process itself, which provides the
article's purpose. Examples of such educational articles include
flash cards, and the various educational electronic learning
devices classified in HRLs 085758 dated January 2, 1990, 086577
dated May 4, 1990, 086649 dated May 4, 1990, 087599 dated March
5, 1991, 088086 dated February 7, 1991, 088494 dated April 19,
1991, 088694 dated July 10, 1991, 951507 dated July 2, 1992,
955845 dated August 22, 1994, and 956518 dated September 22,
1994.
We are of the opinion that the various "ParentBanc"
articles function like an educational article rather than an
educational toy. No self-learning exists when the ParentBanc
products are used. Rather an instructional mode is created by
the child approaching a parent banker with a "check" to make an
actual withdrawal of their own money: either the amount for
withdrawal exists or it does not. Furthermore, no trial and
error characteristic exists as accurate records must be kept so
that both the adult and child can be aware of the "account's"
balance. A child cannot experiment by entering any old number
into the register or writing a check for any conceivable amount,
as this would destroy the accuracy of the balance and defeat the
stated purpose of teaching money management. Finally, the
ParentBanc articles have little if any independent or
manipulative play value.
A child can not role play "banker" keeping a bank account
balanced; it either is or it is not. "Pretending" would cause
the account of the child's real money to be inaccurate. It
requires adult interaction and supervision to function.
Moreover, the only possible manipulative play value, independent
of the article's educational aspects, is writing, specifically
numbers. Customs has never considered writing, coloring, drawing
or painting to be "manipulative play value." Nor does Customs
classify the tools for writing, coloring, drawing or painting as
toys since those tools are not designed to amuse.
Although heading 9503, HTSUS, does not describe the
"ParentBanc Checkbook Refill Kit", the "ParentBanc Checkbook
Refill Kit" nonetheless consists of components all described by
heading 4820, HTSUS. Therefore, it is classifiable according to
GRI 1, under subheading 4820.10.4000, HTSUS, which provides for
"Registers, account books, notebooks, order books, receipt books,
letter pads, memorandum pads, diaries and similar articles:
Other."
Inasmuch as the "ParentBanc," ParentBanc Jr." and
"ParentBanc Deluxe" are not described by heading 9503, HTSUS, and
two or more headings, describe their various components, they
cannot be classified according to GRI 1.
GRI 2(a) is inapplicable because it applies to incomplete or
unfinished articles, and the ParentBanc articles are imported in
a finished complete condition. GRI 2(b) states, in pertinent
part, that any reference in a heading to a material or substance
shall be taken to include a reference to mixtures or combinations
of that material or substance with other materials or substances.
The classification of goods consisting of more than one material
or substance shall be according to the principles of GRI 3.
GRI 3 states that when, by application of rule 2(b) or for
any other reason, goods are, prima facie, classifiable under two
or more headings, classification shall be effected as follows:
(a) The heading which provides the most specific
description shall be preferred to headings providing a more
general description. However, 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.
As the above mentioned headings describe only one particular
component of the ParentBanc set, the headings are considered
equally specific and GRI 3(b) must be examined.
EN Rule 3(b)(X) (pg. 4), provides a three-part test for
"goods put up in sets for retail sale":
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....;
(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 repackaging (e.g., in boxes or cases or
on boards).
"ParentBanc," "ParentBanc Jr." and "ParentBanc Deluxe" comprise
sets put up for retail sale. Their various components are
classifiable under different headings. Each of the articles is
put up together to meet the need of teaching children how to
manage their own money. Finally, all are imported in a
condition which is suitable for sale directly to consumers
without repackaging.
GRI 3(b) states:
(b) Mixtures, composite goods consisting of different
materials or made up of different components, and goods put
up 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.
According to EN GR 3, pg.4, 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. We
are of the opinion that none of the various components of the
"ParentBanc," "ParentBanc Jr." and "ParentBanc Deluxe" articles
provides an essential character. Each of the components works
together in concert to perform the goal of teaching children how
to mange their money. Because none of the components constitutes
an essential character, GRI 3(c) must be applied.
GRI 3(c) states:
When goods cannot be classified by reference to 3(a) or
3(b), they shall be classified under the heading which
occurs last in numerical order among those which equally
merit consideration.
The heading which appears last in numerical order for the
"ParentBanc", "ParentBanc Jr." and
"ParentBanc Deluxe" is heading 8470, HTSUS. Classification to
the 10 digit level will be under subheading 8470.10.0040, HTSUS,
which provides for "Calculating machines and pocket-size data
recording, reproducing and displaying machines with calculating
functions; accounting machines, postage-franking machines,
ticket-issuing machines and similar machines, incorporating a
calculating device; cash registers: 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."
HOLDING:
The "ParentBanc Checkbook Refill Kit" is classifiable under
subheading 4820.10.4000, HTSUS, which provides for "Registers,
account books, notebooks, order books, receipt books, letter
pads, memorandum pads, diaries and similar articles: Other."
The 1997 general column one duty rate is free.
The "ParentBanc", "ParentBanc Jr." and "ParentBanc Deluxe"
is classifiable under subheading 8470.10.0040, HTSUS, which
provides for "Calculating machines and pocket-size data
recording, reproducing and displaying machines with calculating
functions; accounting machines, postage-franking machines,
ticket-issuing machines and similar machines, incorporating a
calculating device; cash registers: 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 1997
general column one duty rate is 2.6% ad valorem.
HRL 958959 is revoked. In accordance with 19 U.S.C.
1625(c)(1), this ruling will become effective 60 days after its
publication in the Customs Bulletin. Publication of rulings or
decisions pursuant to 19 U.S.C. 1625(c)(1) does not constitute a
change of practice or position in accordance with section 177.10
(c)(1), Customs Regulations [19 CFR 177.10(c)(1)].
Sincerely,
John Durant, Director
Commercial RulingsDivision