CLA-2 OT:RR:CTF:TCM H162815 HvB
Leslie Zoe Cholula
Customs Compliance Administrator
QVC, Inc.
Studio Park
1200 Wilson Drive
West Chester, Pennsylvania 19380-4262
RE: Classification of two wreaths consisting of plaiting materials, artificial foliage, LEDs, and metal
Dear Ms. Cholula:
This letter is in response to your letter of March 24, 2011, to our National Commodity Specialist Division, in which you requested a binding ruling pertaining to the classification, under the Harmonized Tariff Schedule of the United States (HTSUS), of two wreaths. Your letter was forwarded to this office for a response.
FACTS:
You intend to import two different wreaths from China that are identified as a “Battery Operated 24 Inch Autumn Berry Grapevine Wreath” (Item H192535) (“Autumn Berry Grapevine Wreath”) and an “Autumn Twig Wreath, Pumpkins” (Item H192576) (“Twig Wreath”). The products are described below.
The Autumn Berry Grapevine Wreath is constructed of natural and artificial materials and measures 24 inches in diameter. The front of the wreath is covered with polyester leaves with plastic stems, artificial berries with paper-wrapped wire stems made from polyfoam, natural pine cones, and arching bunches of natural stems. The natural stems overarch the face of the wreath. The wreath is formed by two concentric metal wire circles, approximately 13 and 17 inches in diameter, respectively, which are soldered together with metal wire “spokes” at 7- to-8 inch intervals. Framed within the wire is a 2 inch wide bundle of natural stems. The polyester leaves are in various shades of orange and red. Arranged in grape-like clusters, the artificial berries are in various shades of red, purple, orange and yellow and each berry is approximately ¼ inches in diameter. A string of battery-powered light emitting diodes (“LEDs”) is interwoven into the wreath’s elements. You provided the following percentage breakdown of material used in the wreath’s construction: 30% polyfoam, 30% LEDs, 21% natural elements, 13% polyester, 4% wire, and 2% plastic. You also provided the following cost breakdown: 50% LEDs, 20% polyfoam, 11% polyester, 8% natural elements, 8% wire, and 3% plastic.
The Twig Wreath is constructed primarily from natural materials. Natural birch stems are adorned with artificial orange and red berries, which measure approximately ½ or ¾ inches in diameter. The artificial berries are attached to paper-wrapped wire stems. Both the paper-wrapped stems and the birch twigs radiate outward at 30 to 45 degree angles to the base circle. A string of LEDs is woven amongst the twigs and wire stems. Powering the LEDs is a battery box that has an “on/off/timer/twinkle” sensor that stays on for 6 hours. Visible from the back of the wreath is a metal frame consisting of a 9 inch diameter circle composed of a single 3 mm thick metal wire, with 1 inch diameter wire loops soldered to the circle at 2 inch intervals. Framed within the loops is an 1 inch wide bundle of twig stems. Together, the metal frame and stems form the circular base of the wreath. The breakdown of materials used most prominently by percentage is stated to be 46% natural twigs, 21% LEDs, 21% polyfoam, and 12% metal wire. The cost breakdown provided is 61% LEDs, 17% polyfoam, 12% metal wire, and 10% natural twigs.
ISSUE:
Whether the subject wreath is classified as an other article, made directly
to shape from plaiting materials of heading 4602, HTSUS, artificial flowers, foliage and fruit of heading 6702, HTSUS, or lamps of heading 9405, HTSUS?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). 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 GRIs 2 through 6 may then be applied in order.
The HTSUS provisions under consideration in this case are as follows:
4602 Basketwork, wickerwork and other articles, made directly to shape from plaiting materials or made up from articles of heading 4601; articles of loofah:
* * *
6702 Artificial flowers, foliage and fruit and parts thereof; articles made of artificial flowers, foliage or fruit:
* * *
9405 Lamps and lighting fitting including searchlights and spotlights and parts thereof, not elsewhere specified or included; illuminated signs, illuminated nameplates and the like, having a permanently fixed light source, and parts thereof not elsewhere specified or included:
CBP has classified wreaths composed of plaiting material and artificial foliage on a case-by-case analysis based on which material imparts the given wreath with its essential character. See, e.g., New York Ruling Letter (NY) N005692, dated February 16, 2007 and NY H87004, dated January 30, 2002 (classified wreaths in heading 4602, HTSUS); and NY N047158, dated January 15, 2009 and NY B86828, dated July 16, 1997 (classifying a wreath in heading 6702, HTSUS).
Because the wreaths at issue are composed of different materials that are prima facie classifiable in different headings (plaiting materials of heading 4602, HTSUS, artificial foliage of heading 6702, HTSUS, and lamps of heading 9405, HTSUS), GRI 3 is implicated. In particular, GRI 3(b) states, in pertinent part:
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.
In understanding the language of the HTSUS, the ENs may be utilized. The ENs, though not dispositive or legally binding, may provide commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. CBP believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
In its discussion concerning “essential character,” EN (VIII) to GRI 3(b) states:
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.
Since the subject wreaths are considered to be composite goods, GRI 3(b) requires that classification be based on the component that provides the product with its essential character. A GRI 3(b) analysis requires a fact intensive analysis. See Headquarters Ruling Letter (HQ) H147436, dated May 11, 2011 (in which we determined the classification of several decorative vine baskets). As noted above, EN (VIII) to GRI 3(b) provides that when performing an essential character analysis, the factors that should be considered are the bulk, quantity, weight or value, or the role of a constituent material in relation to the use of the goods. There have been several court decisions on "essential character" for purposes of classification under GRI 3(b). See Conair Corp. v. United States, 29 C.I.T. 888 (2005); Structural Industries v. United States, 360 F. Supp. 2d 1330, 1337-1338 (Ct. Int’l Trade 2005); and Home Depot USA, Inc. v. United States, 427 F. Supp. 2d 1278, 1295-1356 (Ct. Int’l Trade 2006), aff’d 491 F.3d 1334 (Fed. Cir. 2007) (Home Depot). "[E]ssential character is that which is indispensable to the structure, core or condition of the article, i.e., what it is." Home Depot USA, 427 F. Supp. 2d at 1293 quoting A.N. Deringer, Inc. v. United States, 66 Cust. Ct. 378, 383 (1971).
In Home Depot, the CIT classified lighting fixtures partly of metal and glass, wood or plastic according to their glass component. In so doing, the court held that the glass component imparted a lighting fixture with its essential character because the component, among other attributes, had greater visible area, weight, contributed to the decorative appearance and structure, and gave the structure its name.
Since both wreaths feature LEDs, we first discuss the applicability of heading 9405, HTSUS. Although the LEDs interspersed throughout the leaves of both wreaths account for the majority of the wreaths’ cost (50% with respect to the Autumn Berry Grapevine Wreath and 61% with respect to the Twig Wreath), none of the other factors mentioned in the EN to GRI 3(b) weigh in favor of finding that the LEDs impart either or both wreaths with its essential character. While the LEDs may add to the decorative appeal of the wreaths when powered on, such a complementary role is not sufficient to impart the wreaths with their essential character. Moreover, the presence or absence of the LEDs does not affect whether the wreaths is identifiable as such. Accordingly, we find that the LEDs interspersed throughout the leaves do not impart the instant wreaths with its essential character.
Autumn Berry Grapevine Wreath
In determining what the essential character of the Autumn Berry Grapevine Wreath is, we look to various factors, including the weight, cost, the role of constituent materials in relation to use of the good. As we have eliminated the LEDs as the source of the wreath’s essential character, at issue is whether the artificial foliage or the natural stems give the wreath its essential character. The artificial foliage consists of 45% of the materials (2% plastic, 13% polyester, and 30% polyfoam) used in the construction of the wreath. With respect to the cost, the artificial materials constitute 34% of the cost (3% plastic, 11% polyester, and 20% polyfoam). Thus, the artificial berries and leaves play a prominent role in the construction of the wreath, since they comprise nearly half of the materials used in the wreath’s construction and represent a third of the wreath’s cost.
Next, we look to the role of the components in relation to the use of the article at issue, mindful that the wreath is intended to be hung as a decoration. Applying the definition of essential character used by the Court of International Trade, we look to see what element is “indispensable to the merchandise.” Home Depot, 30 C.I.T. 445 at 460, Ibid. See also See Conair Corp. v. United States, 29 C.I.T. 888 at 895-897. In this regard, the artificial berries and leaves noticeably cover the entirety of the wreath. We note that the frame, and not the twigs, provides the wreath with its circular structure. The twigs merely serve as filler for the metal frame and are not visible from the front of the wreath. Despite providing the wreath with its circular structure, the metal frame is also completely obscured by the other elements of the wreath. In this instance, the artificial foliage imparts the wreath with its essential character as the artificial foliage is the predominant decorative material, both in composition (45%) and in visibility. Based on the foregoing analysis, we find that the Autumn Berry Grapevine Wreath is classifiable in heading 6702, HTSUS. We note that this decision is consistent with NY N069064, dated August 19, 2009, and NY N047158, dated January 15, 2009.
Twig Wreath
With respect to the Twig Wreath, we note that the twigs account for 46% of the materials used in construction, and 10% of the cost, compared to the artificial foliage which constitutes 21% of the materials and 17% of the cost. While the bulk of the materials weigh in favor of heading 4602, HTSUS, the similar cost of the artificial foliage and plaiting materials does not weigh in favor of either component.
In terms of the role of the constituent materials in relation to the use of the goods, we note that although the artificial foliage contributes to the decorative aspects, the plaiting materials also remain visible as a backdrop for the artificial foliage while simultaneously providing the wreath with its circular structure. Because they play this dual role, we find that the plaiting materials provide the wreath with its essential character. See Home Depot, 427 F. Supp. 2d at 1295-1356, HQ H063640, dated August 3, 2009, and HQ H141058, dated January 11, 2011.
HOLDING:
By application of GRI 3(b), the subject “Battery Operated 24 Inch Autumn Berry Grapevine Wreath” (item number H192535) is classified in heading 6702, more specifically, subheading 6702.10.20, which provides for “Artificial flowers, foliage and fruit and parts thereof; articles made of artificial flowers, foliage or fruit: Of plastics: Assembled by binding with flexible materials such as wire, paper, textile materials, or foil, or by gluing or by similar methods.” The column one, general rate of duty for merchandise of subheading 6702.10.20 is 8.4% ad valorem.
By application of GRI 3(b), the subject “Autumn Twig Wreath, Pumpkins” (item H192576) is classified in heading 4602, HTSUS, which provides for: “Basketwork, wickerwork and other articles, made directly to shape from plaiting materials or made up from articles of heading 4601; articles of loofah”. It is specifically provided for under subheading 4602.19.60, HTSUS, which provides for: “Basketwork, wickerwork and other articles, made directly to shape from plaiting materials or made up from articles of heading 4601; articles of loofah: Of vegetable materials: Other: Other: Other: Wickerwork”. The column one, general rate of duty for merchandise of subheading 4602.19.60, HTSUS, is Free.
Duty rates are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov/tata/hts.
Sincerely,
Ieva K. O’Rourke, Chief
Tariff Classification and Marking Branch