CLA-2:RR:CR:TE 963221 SG
Despina Keegan, Esq.
Serko & Simon, LLP
c/o Baker & Hostetler
666 5th Avenue, 16 floor
New York, New York 10103
Re: Request for Reconsideration of NY D83544, dated February 1, 1999; Tariff Classification of Novelty “Grinch” Stuffed Coin Purse Made in China.
Dear Ms. Keegan:
On February 1, 1999, New York Ruling Letter (NY) D83544 was issued to your client, Jaclyn, Inc., in response to its request for a binding ruling on the tariff classification of a novelty coin purse. In that ruling, the novelty coin purse was classified under subheading 4202.32.9550, of the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for articles of a kind normally carried in the pocket or in the handbag, with outer surface of textile materials, other, of man-made fibers. You request reconsideration of that decision. A sample, style 4289, was submitted to Headquarters for review.
FACTS: The sample, style 4289, is described as a stuffed toy made to resemble the Dr. Seuss “Grinch”. It measures about 5 inches high and 2 ½ inches wide (at its widest point). It is constructed of a textile plush exterior. The arms, legs and head are stuffed with non-woven textile material. The torso has a 2 ¾ inch pouch approximately 3 inches wide and 2 inches deep sewn into its back. The opening is closed by means of a metal zipper with a relatively large zipper pull. Attached to the zipper pull is a metal split ring that has a metal J-hook clasp attached to it. The J-hook clasp allows the article to be attached to a belt loop, backpack, etc. The pouch can easily hold six dollars worth of quarters. The pouch has a textile interior lining. We understand that a small tea bag sized packet of polyvinyl chloride (PVC) was sewn into the bottom portion of the article, although the sample we were provided with had the bottom opened and the packet removed prior to being forwarded to our office.
ISSUE
Whether the article is a novelty coin purse under heading 4202, HTSUSA, or is a stuffed toy representing animals or non-human creatures, under heading 9503, HTSUSA?
ANALYSIS
Classification under the HTSUSA 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.
Heading 4202, HTSUSA, provides for:
Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper.
Heading 9503.41.0010, HTSUSA, provides, in pertinent part, for:
Other toys; reduced–size (“scale”) models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof: Toys representing animal or non-human creatures (for example, robots and monsters) and parts and accessories thereof: Stuffed toys and parts and accessories thereof; Stuffed toys.
Legal Note 1(l) to Chapter 42 excludes articles of Chapter 95 such as toys, games or sports equipment. Similarly, Legal Note 1(d) to Chapter 95 excludes sports bags or other containers of heading 4202, HTSUSA. Two Legal Notes such as these do not mutually exclude each other, but rather instruct that classification is made in the one chapter that properly includes the article under consideration. See Headquarters Ruling Letter (HQ) 088665, dated June 14, 1991, and Avenues in Leather v. United States, 11 F. Supp. 2d 719 (CIT 1998), affirmed, 178 F.3d 1241 (CAFC 1999). Accordingly, we must determine which Chapter properly includes the article under consideration.
The Harmonized Commodity Description and Coding System, Explanatory Notes (EN), represent the official interpretation of the Harmonized System at the international level (for the 4 digit headings and the 6 digit subheadings) and facilitate classification under the HTSUSA by offering guidance in understanding the scope of the headings and GRI. The EN, although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUS, and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
Although the term "toy" is not defined in the tariff, the EN to chapter 95, HTSUS, state, in pertinent part, that "this Chapter covers toys of all kinds whether designed for the amusement of children or adults." Although not set forth as a definition of "toys", this term has been interpreted by Customs as equating "toys" with articles "designed for the amusement of children and adults."
In the tariff context, "amuse" is mainly used in contrast to some utilitarian or functional quality and the focus is not how the toys are used, but whether they are designed to amuse. It has been Customs position that the "amusement" requirement means that a toy should be designed and used principally for amusement and should not serve a utilitarian purpose. In this case, the utilitarian function of the articles is not merely incidental. Instead, the manufacturer expended additional cost and effort to construct the article so that it has a pouch with a metal zipper, and so that it can be easily carried by a young child by means of the J-hook clasp.
While the features of the Grinch are entertaining, the Grinch has little play value. Moreover, “Customs has ruled on several occasions that articles having toy like features such as animal shapes or non-human shapes are not classified as toys, but are classified in provisions that recognized their use as functional items despite a novelty appearance (for example, backpacks and sleeping bags).” HQ 088665, dated June 14, 1991.
In HQ O88665, Customs ruled that a “Wrist Rascal” was a novelty coin purse classifiable under heading 4202, HTSUSA. The “Wrist Rascal” was a full-figured representation of a baby chick worn on the wrist which primarily functioned as a key-case or coin purse. Customs found that the “Wrist Rascal” was not a toy because it was not used for the amusement of children or adults, but rather as a container to carry personal items that had ornamental features. Like the “Wrist Rascal,” the instant article’s primary function is to be a container to carry personal items.
Customs has ruled on similar merchandise that is indicative in this case. In HQ 963478, dated May 30, 2001, Customs determined that the primary function of a stuffed “Bean Bag Face” with a zippered pouch approximately 3 inches deep and 2 inches wide, and metal split key ring with attached J-hook clasp, was “to act as a container for personal items of a small child, e.g., coins, bills, and keys. Like the stuffed animal backpack, the whimsical nature of the “Bean Bag Faces” is designed to appeal to children, and is outweighed by the item’s utility.” Customs applied the reasoning of HQ 088665, and concluded that the “Bean Bag Face” was “an article of a kind normally carried in the pocket or handbag”.
In HQ 950752, dated January 9, 1992, Customs considered whether a stuffed animal that had a sealable compartment and that could be worn as a backpack, was a toy or a backpack. Customs reasoned:
Although the whimsical characters are designed to appeal to children, the presence of a functional compartment, shoulder straps and hook and loop closures indicate an intent for use as a carrying case, a use which characterizes the article at issue. The compartment which forms the animal body is functionally relevant and capable of use by a small child for the storing of small toys or supplies.
You argue that whatever utilitarian function the article possesses is secondary and incidental to its primary purpose (i.e. to provide amusement or enjoyment). In support of your argument, you cite NY C89828, dated July 9, 1998. That ruling involved the classification of stuffed toy “Teletubbies” attached to keychains. However, unlike the instant article, the toy “Teletubbies” were fully stuffed except for their “miniscule pouch”, and consequently the items’ main appeal was the play value. It therefore functioned more as a toy than as a container to carry personal items.
Customs has ruled that the small carrying capacity of a pouch, due to small size or overstuffing, will reduce the utilitarian value of the item. See HQ 964737, dated January 4, 2001, (ruling that the small flat pocket on a “Hello Kitty” keychain was insufficient to find that the primary use was that of a novelty coin purse); and HQ 962670, dated April 20, 1999 (ruling that the small pocket on a “Rugrats” doll /backpack did not provide sufficient space to find that the article’s primary use was that of a “novelty backpack”). In addition, in HQ 961502, dated April 19, 1999, Customs ruled that the “Huggie Heart Shareables” doll, which had straps for carrying, had a zippered pocket so small that it was not practical to serve as a pack for a child who carries the doll; instead, the practical use of the zippered pocket was to store or carry the Shareable accessories. As such Customs found it was not a “novelty backpack”. Unlike those items, the “Grinch” is not fully stuffed and its pouch is large enough so that its utilitarian value as a coin purse is not diminished.
We note that you cite HQ 961502 and HQ 962670 as support for your position that due to the physical characteristics, the subject item is classifiable as a chapter 95 “toy”. The issue in both of these rulings was whether the items were classifiable as dolls or as backpacks. As we stated above, Customs determined that neither of these items provided sufficient space in their pouches to find that their primary use was that of a “novelty backpack”. The issue here is whether the “Grinch” is classifiable as a doll or as a coin purse. The pouch in the “Grinch” is large enough to transport small articles such as keys, coins, or currency. As such it serves as a functional coin purse. Like the “Bean Bag Face” the whimsical nature of the “Grinch” which is designed to appeal to children is outweighed by the item’s utility,
This ruling is consistent with prior rulings on similar articles. See NY E80540, dated April 20, 1999 (plush duck with a zippered pocket measuring approximately 3 ¾” by 2 ½” sewn into the back is a coin purse); PD D86561, dated February 4, 1999, (6” stuffed animal with pouch and keychain is a coin purse). In addition, in HQ 088665, on the classification of the “Wrist Rascals” coin purse, Customs considered whether the classification of the article under consideration, as an “article of a kind normally carried in the pocket or handbag” is improper because of its size and dimension. Customs stated:
The subject article qualifies as a “similar article” [in heading 4202, HTSUSA] in that it functions much like a key-case, wallet, or coin purse, it holds and transports small articles such as keys, coins, or currency. The HTSUSA does not require that article of this nature be “designed” to be carried on the person. The HTSUSA provision merely requires that an item be “of a kind normally carried in the pocket or in the handbag.” Such use of the word normally does not exclude those items which usually are carried in the pocket or handbag but are adapted to be worn on the person.
Applying the reasoning cited above, the article under consideration is an “article of a kind normally carried in the pocket or handbag”.
HOLDING
For the foregoing reasons, NY D83544, dated February 1, 1999, is affirmed.
The “Grinch,” style 4289, is classified under 4202.32.9550, HTSUSA, textile category 670, which provides for “Trunks, suitcases . . . knapsacks and backpacks, . . . wallets, purses, of textile materials . . .: 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 textile materials: Other: Other Of man-made fibers. The general column one rate of duty is 18.3% ad valorem.
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 negotiations and changes, we suggest that the importer 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 the local Customs office.
Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, the importer should contact the local Customs office prior to importing the
merchandise to determine the current status of any import restraints or requirements.
Sincerely,
John Durant, Director Commercial Rulings Division