CLA-2 CO:R:C:G: 085376 DPS
Mr. John Maser
Total Port Clearance, Inc.
10 Fifth Street
Valley Stream, N.Y. 11581
RE: Croquet Sets from Malaysia and Taiwan; Classification,
GSP Eligibility, Marking and Quota/Visa Requirements
Dear Mr. Maser:
This is in response to your letter of July 17, 1989, on
behalf of Regents Sports Corp., in which you requested a
ruling on the classification under the Harmonized Tariff
Schedule of the United States Annotated (HTSUSA), GSP status
and marking requirements for croquet sets comprised of
components made in Taiwan and Malaysia. Ms. Vergona of your
office provided further information in a communication dated
January 9, 1990, concerning revised country of origins for
some of the croquet set components, as well as value
information for each component. You also requested
information about quota/visa requirements, and their effect
upon the nylon carry bags which accompany the croquet sets
your client plans to import. One sample of the subject
croquet set was provided with your ruling request.
FACTS:
The submitted sample is a six player croquet set. The
retail box lists the contents as follows:
1. 6 hardwood mallets with white caps, the mallet
measures 7" in length; and 6 handles
which measure 24" in length (the 6
mallets are disassembled in the box);
the handles and mallets are stated to be
from Malaysia; the plastic caps which
are marked "made in Taiwan" are stated to
be from Malaysia by the inquirer.
2. 2 stakes which measure 16" in length and are
stated to originate in Malaysia.
3. 6 thermo-press enamel finish croquet balls which
measure 3 inches in diameter; pursuant to the
inquirer's July 17,1989 submission, the balls
originate from Malaysia; pursuant to the
inquirer's January 9, 1990, submission, the
country of origin of the balls has changed
from Malaysia to Taiwan.
4. 9 galvanized wire wickets which are said
to originate in Taiwan.
5. A woven nylon carry bag from Taiwan
designed to hold the assembled components
of the croquet set.
ISSUES:
(1) What is the proper classification and rate of duty for
the subject croquet set.
(2) Whether the nylon carry bag is subject to visa/quota
requirements, and, if so, how they apply to the set.
(3) Whether the croquet set is eligible for GSP treatment as
a product of Malaysia.
(4) Whether marking the box in which the set is packaged,
indicating the country of origin of each article,
and attaching stickers that indicate the country of
origin on the polybag of each packed component,
satisfies the country of origin marking
requirements.
LAW & ANALYSIS:
Classification
The General Rules for the Interpretation of the
Harmonized System (GRI's) govern classification under the
Harmonized Tariff Schedule. According to GRI 1, the primary
consideration in determining whether merchandise should be
classified in a heading should be given to the language of
the heading and any relevant chapter or section notes, and,
provided such headings or notes do not otherwise require,
according to the remaining GRI's, taken in order.
The merchandise at issue is a croquet set, which
contains various components. Because there is no specific
provision covering "croquet sets," the question of whether
the merchandise should be considered a set for tariff
purposes arises. The Explanatory Notes to the HTSUSA
constitute the official interpretation of the tariff at the
international level. The Explanatory Notes to GRI 3(b)
provide further guidance in determining what constitutes a
"set." The relevant note states, in pertinent part:
(X) 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 repacking
(e.g., in boxes or cases or on boards).
In this case, it is our view that the above "set"
criteria are met. First, the subject merchandise consists of
at least two different articles which are prima facie
classifiable in different headings (ie., the nylon carry bag,
which is classifiable under 4202.92.3030, HTSUSA, which
covers sports bags with outer surface of textile materials,
and the croquet mallets, which are classifiable under
9506.99.6080, the provision for articles and equipment for
outdoor games, not specified or included elsewhere in the
chapter). Secondly, the items are put up in a manner suitable
for sale directly to consumers without repacking. The third
criterion, that the goods consist of articles put up together
to meet a particular need or carry out a specific activity,
is also satisfied. Therefore, the subject merchandise
qualifies for treatment as a set.
Pursuant to GRI 3(b), sets are classified according to
the component that imparts the essential character to the
set. The Explanatory Notes for GRI 3(b), at VIII, state in
pertinent part:
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, its bulk, quantity, weight or
value, or by the role of a constituent
material in relation to the use of the
goods.
In applying the Explanatory Note, we believe that the croquet
mallets and stakes impart the essential character to the set.
The mallets and stakes are dedicated to the specific activity
for which the set was designed, to play croquet.
Consequently, this set is classifiable under subheading
9506.99.6080, HTSUSA, as articles and equipment for
gymnastics, athletics, other sorts (including table-tennis)
or outdoor games, not specified or included elsewhere in this
chapter...: other: other: other. Items classified under this
provision are subject to a duty rate of 4.64 percent ad
valorem.
Quota/Visa Requirements
Merchandise which is classifiable per se under Chapter
95, HTSUSA, is not subject to visa requirements or quota
restraints. However, the nylon bag is not classifiable per
se under that chapter. It is only classifiable there by
virtue of its being a component of the set. Thus, consistent
with Headquarters Ruling Letter (HRL) 084935, dated August
23, 1989, the nylon bag which is part of the croquet set, is
subject to visa requirements and quota restraints under
subheading 4202.92.3030, HTSUSA. The textile category is
670. The duty rate on the nylon bag corresponds to the
classification of the set. 4202.92.3030, HTSUSA, only
applies in this case for visa requirements and quota
restraints.
GSP Eligibility
Under the Generalized System of Preferences (GSP) (19
U.S.C. 2461-2466), eligible articles which are imported
directly from a designated beneficiary developing country
(BDC) into the U.S. qualify for duty-free treatment if the
sum of the cost or value of the materials produced in the BDC
plus the direct costs involved in processing the eligible
article in the BDC is at least 35% of the article's appraised
value at the time it is entered in the U.S. 19 U.S.C. 2463.
Direct costs of processing operations mean those costs either
directly incurred in, or which can be reasonably allocated
to, the growth, production, manufacture, or assembly of the
specific merchandise under consideration. See 19 CFR 10.178.
Malaysia is a BDC, see General Note 3 (c)(ii)(A),
HTSUSA, and, according to the above analysis, the samples at
issue will be classified under subheading 9506.99.6080,
HTSUSA, a GSP-eligible provision. Accordingly, the articles
may be entered without payment of duty under the GSP if the
sum of the cost of those components produced in Malaysia plus
the direct costs of the Malaysian processing operation is not
less than 35 percent of the appraised value of the croquet
sets at the time of their entry into the U.S. Although cost
information was provided, it appears inconsistent.
Therefore, we are unable to determine from the information
provided whether this 35% value-content requirement will be
satisfied.
Country of Origin/Marking Requirements
Section 304 of the Tariff Act of 1930, as amended (19
U.S.C. 1304), provides, in general, that all articles of
foreign origin imported into the U.S. shall be marked in a
conspicuous place as legibly, indelibly and permanently as
the nature of the article (or 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 country or origin marking requirements and exceptions of
19 U.S.C. 1304.
Pursuant to 19 U.S.C. 1304(a)(3)(D) and section
134.32(d), Customs Regulations (19 CFR 134.32(d)), an
exception from individual marking is applicable where the
marking of the container of an imported article will
reasonably indicate the origin of the article. This
exception is normally applied in cases where the imported
article(s) is imported in a properly marked container and
Customs officials at the port of entry are satisfied that the
ultimate purchaser in the U.S. will receive it in its
original marked container.
In addition, section 134.46, Customs Regulations (19 CFR
134.46), requires that when the name of any city or locality
in the U.S., or the name of any foreign country or locality
other than the country or locality in which the article was
manufactured or produced, appear on an imported article or
its container, there shall appear legibly and permanently, in
close proximity to such words, letters or name, and in at
least a comparable size, the name of the country of origin
preceded by "Made in," "Product of," or other words of
similar meaning.
In this case, the components of the croquet set are
products of two different countries. The mallets and the
stakes are products of Malaysia; the wickets, the balls and
the nylon carrying bag are products of Taiwan. The set is
imported and sold in a retail carton which bears a picture of
and information about the product. You have submitted an
actual-size copy of the marking to be used on the retail
carton. The copy shows that the Canadian distributor's name
and address appear directly above the words "Made in Malaysia
Except Bag and Wickets Made in Taiwan," all in lettering 1/8
inch in size. In an April 17, 1990 telephone conversation
with a member of my staff, you indicated that the marking
will be changed to reflect Taiwan as the country of origin of
the balls and that the Canadian distributor's name and
address appear on only one panel of the retail carton.
Based on the submitted retail carton sample and
information provided to my staff in writing and by telephone,
it is our opinion that the marking is sufficiently
conspicuous to satisfy the requirements of 19 CFR 134.46.
So long as the subject croquet sets continue to be sold in
the described retail cartons, and Customs officials at the
port of entry are satisfied that the ultimate purchaser will
receive them in this fashion, we are of the opinion that
marking the retail cartons in lieu of marking the individual
components of the set, satisfies the statutory requirements.
HOLDING:
The subject croquet set is classifiable as equipment
for outdoor games, not elsewhere specified or included in
Chapter 95, under subheading 9506.99.6080, HTSUSA. Articles
classified under this provision are subject to a duty rate of
4.64 percent ad valorem.
Consistent with HRL 084935, dated August 23, 1989, the
nylon bag which is part of the croquet set at issue, is
subject to visa requirements and quota restraints applicable
to merchandise classifiable under subheading 4202.92.3030,
HTSUSA. The textile category is 670. The bag remains part
of the set for rate of duty purposes.
Pursuant to General Note 3 (c)(ii)(A), HTSUSA, Malaysia
is a beneficiary developing country. In accordance with the
classification of the set under subheading 9506.99.6080,
HTSUSA, a GSP-eligible provision, the articles may be entered
without payment of duty under the GSP if Customs officials at
the port of entry are satisfied that the sum of the costs of
those components produced in Malaysia plus the direct costs
of the Malaysian processing operation is not less than 35
percent of the appraised value of the croquet sets at the
time of entry into the U.S.
Based upon the information supplied by the inquirer, it
is our opinion that marking the retail carton to indicate the
country of origin of all components of the set, as described
above, is sufficiently conspicuous to satisfy the
requirements of 19 CFR 134.46. So long as Customs officials
at the port of entry are satisfied that the ultimate
purchaser will receive the subject croquet set in the
described retail cartons, marking the retail cartons in lieu
of marking the individual components of the set, satisfies
the statutory requirements.
With regard to the quota/visa requirement, please be
advised that the designated textile and apparel category may
be subdivided into parts. If so, visa and quota requirements
applicable to the subject merchandise may be affected. Since
part categories are the result of international bilateral
agreements which are subject to frequent renegotiations and
changes, to obtain the most current information available, we
suggest that you check, close to the time of shipment, the
Status Report on Current Import Quotas (Restraint Levels), an
issuance of the U.S. Customs Service, which is updated weekly
and is available at your local Customs office.
Due to the changeable nature of the statistical
annotation (the ninth and tenth digits of the classification)
and the textile restraint (quota/visa) categories, you should
contact your local Customs office prior to importing the
merchandise to determine the current applicability of any
import restraints or requirements.
Sincerely,
John Durant, Director
Commercial Rulings Division