CLA-2 CO:R:C:F 952915 LPF
Mr. Greg J. Grasher
Border Brokerage Company
P.O. Box B
Blaine, WA 98230
RE: Classification of doughcraft figurines; Heading 9602, HTSUSA;
Molded or carved articles not elsewhere specified or included; Heading 8505, HTSUSA; Permanent magnets and articles intended to become permanent magnets after magnetization; HRLs 089333, 082060, 083195
Dear Mr. Grasher:
This is in response to your letter dated September 18, 1992,
submitted on behalf of Kitras and Newton, regarding the proper
classification, under the Harmonized Tariff Schedule of the
United States Annotated (HTSUSA), of doughcraft figurines. You
submitted samples with your request for a binding ruling. We
note that two doughcraft articles, a brooch in the shape of a
teddy bear and a Christmas tree ornament consisting of a teddy
bear, were classified in New York Ruling Letter 878883, issued
October 28, 1992. We regret the delay in responding to your
inquiry.
FACTS:
The doughcraft articles, manufactured in Canada, are
constructed of dough. The dough is made by mixing flour, water,
salt and sometimes tempera paint for coloring. It is then shaped
by hand or with very simple tools and baked in a conventional
oven. After the article is painted, it is dipped into a liquid
plastic coating for sealing and finishing. The final stage is
the addition of magnets, bows, artificial flowers, etc. The
magnets are manufactured in the U.S. The articles at issue
include:
1) a teddy bear magnet measuring approximately 2-1/2 inches by 1-3/4 inches, the magnet portion composed of barium, iron, lead, and strontium oxide compounds as well as synthetic rubber (Hypalon);
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2) a wall decoration approximately 5 inches by 5-1/2 inches, consisting of a figurine in the shape of a teddy bear, wearing an apron and a hat, including the words "Grandma's
Kitchen," written across a ribbon placed behind the bear's
head, and a hook to facilitate its hanging; and
3) a figurine 3 inches in height in the shape of a sitting teddy bear wearing a pink bow and holding a bouquet of artificial flowers in its arm.
ISSUE:
Whether the doughcraft articles are classifiable in heading
9602 as molded or carved articles not elsewhere specified or
included, in 8505 as permanent magnets, or elsewhere in the
HTSUSA.
LAW AND ANALYSIS:
The General Rules of Interpretation (GRIs) taken in their
appropriate order provide a framework for classification of
merchandise under the HTSUSA. Most imported goods are classified
by application of GRI 1, that is, 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 may then be applied.
The Explanatory Notes (ENs) to the Harmonized Commodity
Description and Coding System, which represent the official
interpretation of the tariff at the international level,
facilitate classification under the HTSUSA by offering guidance
in understanding the scope of the headings and GRIs.
Heading 9602 provides, inter alia, for molded or carved
articles, not elsewhere specified or included. The ENs to 9602
state that:
[f]or the purposes of these materials, the expression
"moulded articles" means articles which have been moulded
to a shape appropriate to their intended use. On the other hand, materials moulded in the shape of blocks, cubes, plates, bars, sticks, etc., whether or not impressed during moulding, are not included.
Subject to the exclusions mentioned below, this group
includes:...
(7) Moulded or carved articles with a basis of flour or
starch, agglomerated with gum and lacquered (imitation
flowers or fruit, moulded in one piece, statuettes, etc.).
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The term "mold" is defined as, "1:... to knead (dough) into a
desired consistency or shape 2: to give shape to... 3: to form in
a mold...." while the term "carve" is defined as, "1: to cut with
care or precision...." See Webster's Ninth New Collegiate
Dictionary 211, 764 (1990). Based on the language included in
the ENs to 9602 and the definitions of the terms "mold" and
"carve," it is our position that heading 9602 was intended to
include articles "shaped by hand or with very simple tools." As
the ENs to 9602 indicate that the heading includes those articles
not specified or included in other headings of the Nomenclature,
it appears the provision was intended to be construed in an
inclusive, as opposed to exclusive, manner. The wall decoration
and sitting teddy bear doughcraft articles are classifiable
therein. The appropriate subheading is 9602.00.50.
In regard to the teddy bear magnet, since no HTSUSA heading
provides for the article, as a whole, it is not classifiable at
the GRI 1 level. Thus, we turn to GRI 3(a) to classify the
article in the HTSUSA heading providing for one of its
components: either the magnet in heading 8505, or the teddy bear
figure in heading 9602. Since each of the possible headings, in
this case, refers to only part of the good, the headings are
regarded as equally specific, and we do not classify the article
by GRI 3(a) but rather by GRI 3(b).
GRI 3(b) provides that articles made up of different
components, that is, composite goods, shall be classified as if
they consisted of the component which gives them their essential
character. "Essential character" is the attribute which strongly
marks or serves to distinguish what an article is. EN VIII to
GRI 3(b) explains that bulk, quantity, weight, value or the role
of a constituent material in relation to the use of the article
are indicia of essential character.
The ENs to 8505, providing for permanent magnets, indicate
that:
...permanent magnets consist of pieces of hard steel,
special alloys or other materials (e.g., barium ferrite agglomerated with plastics or synthetic rubber) which have
been rendered permanently magnetic. Their shape varies according to the use for which they are designed.... Permanent magnets remain classified here whatever their use, including small magnets used, inter alia, as toys.
In the past, Customs has not classified merchandise similar
to the subject articles within 8505 because the ENs state that:
...the heading d oes not cover:...[e]lectro-magnets, permanent magnets or magnetic devices of this heading, when presented with machines, apparatus, toys, games, etc., of which they are designed to form part (classified with those machines, apparatus, etc.).
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In Headquarters Ruling Letters 089333, issued August 26, 1991,
083195, issued April 28, 1989, and 082060, issued April 29, 1991,
it was determined, pursuant to GRI 3(b), that the essential
character of various refrigerator magnets incorporating
decorative fronts or figures was imparted by the magnet.
However, because the, "magnets [were] designed to form part of
the article...[and were] presented with and incorporated into a
textile [or plastic] caricature," they were not classified within
8505, but rather in the heading providing for each magnet's
component material (e.g., iron, steel, or ceramic).
It is our current position that articles which primarily
serve as magnets are classifiable as permanent magnets in heading
8505. Whereas this decorative magnet still, as a whole,
functions as a magnet and likely is purchased for its magnetic
capabilities, this article is appropriately described as a
"permanent magnet."
This decorative magnet is not presented with any other
article, nor is it designed to form part of another article.
Instead, when viewed in its entirety, it is presented alone and
functions distinctly as a permanent magnet. The fact that the
article includes a decorative front does not preclude it from
classification in 8505 as a permanent magnet. It also is
composed of material, inter alia, barium ferrite agglomerated
with synthetic rubber, which according to the ENs is
characteristic of permanent magnets.
The article is distinguished by the magnet component which
allows the article to function as a magnet. Accordingly, the
magnet imparts the essential character, and the entire article is
classifiable in heading 8505. The appropriate subheading is
8505.19.00.
HOLDING:
The doughcraft articles of a sitting teddy bear, and a teddy
bear wall decoration are classifiable in subheading 9602.00.50,
HTSUSA, as "Worked vegetable or mineral carving material...and
other molded or carved articles, not elsewhere specified or
included;...: Other." From the information provided, it appears
that these articles are "originating goods" as defined by General
Note 3(c)(vii)(B), HTSUSA, and will enjoy certain tariff
preferences under the United States - Canada Free Trade Agreement
(CFTA), if entered before January 1, 1994. The special rate of
duty, for Canadian articles, is 1.8 percent ad valorem.
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The doughcraft teddy bear magnet is classifiable in
subheading 8505.19.00, HTSUSA, as "Electromagnets; permanent
magnets and articles intended to become permanent magnets after
magnetization...: Permanent magnets and articles intended to
become permanent magnets after magnetization: Other." From the
information provided, it does not appear that this article would
have qualified for preferential tariff treatment under the CFTA,
if entered before January 1, 1994. The applicable rate of duty
is 4.9 percent ad valorem.
In accordance with Presidential Proclamation 6641, on January
1, 1994 the North American Free Trade Agreement (NAFTA) became
effective thereby suspending the CFTA. Advance rulings
specifically may be requested with respect to prospective,
current, and ongoing NAFTA transactions from the Office of
Regulations and Rulings or the Area Director of Customs, New York
Seaport.
Sincerely,
John Durant, Director
Commercial Rulings Division