OT:RR:CTF:CPMM H268403MMM
Mr. Ralph Saunders
Deringer Logistics Consulting Group 1 Lincoln Boulevard, Suite 225 Rouses Point, NY 12979
RE: Modification of NY L82296 and Revocation of NY I87269, NY D84404, NY 816190, NY N005466, NY C85171, and NY L86796; Classification of “piggy” Banks
Dear Mr. Saunders,
This is reference to the New York Ruling Letter (NY) L82296, issued to you by U.S. Customs and Border Protection (CBP) on February 22, 2005 concerning classification of an animal “piggy” bank under the Harmonized Tariff Schedule of the United States (HTSUS). We have reviewed your ruling, and determined that it is incorrect, and for the reasons set forth below, are modifying your ruling.
We have also reviewed NY I87269, dated October 11, 2002, NY D84404, dated December 2, 1998, NY 816190, dated October 31, 1995, NY N005466, dated January 26, 2007, NY C85171, dated April 2, 1998, and NY L86796, dated August 5, 2005, and determined they are also incorrect, and for the reasons set forth below, we are revoking those rulings.
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), a notice of the proposed action was published in the Customs Bulletin, Volume 54, No. 42, on October 28, 2020. No comment was received in response to this notice.
FACTS:
In your ruling NY L82296 (representation of a pig), and in rulings NY I87269 (representation of a pig), NY D84404 (representation of a soda vending machine), and NY 816190 (representation of Mickey Mouse character), CBP classified the subject plastic “piggy” banks into heading 9503, HTSUS, as toys.
In NY N005466, CBP stated as follows in reference to the subject merchandise:
Described as a Zillions Counting Pig Toy Bank. There is no designated item number indicated for the product. The article is a large, translucent pig bank with a digital reader that indicates the amount of money in the bank. This “piggy” bank encourages a child to save money and tells them the amount in the bank deposited.
In NY C85171, CBP stated as follows:
The first article is a PVC bank measuring approximately 4" in height. It is depicted in the shape of the head of the Looney Tune cartoon character "Marvin the Martian." It has a black face, large white eyes, and is shown wearing a green trojan helmet. The article has a small coin slot in its top and a retrieval plug in the base. The base is red in color and contains the legend "BIRTHDAY GREETINGS EARTHLING!!!." Inside of the article is an electronic musical mechanism which plays a Happy Birthday melody when coins are dropped through the coin slot. This mechanism consumes a large part of the cavity of the article.
The second article is a PVC bank measuring approximately 4" in height. It is depicted in the shape of a football permanently mounted to a football tee. The football is brown and white in color and contain a small coin slot in its top. The football tee is orange in color and has a retrieval plug in its base. The utility of these items is limited due to the small size of the respective coin slots and storage capacities.
In NY L86796, CBP stated as follows:
An animal bank that is composed of a plastic body covered with plush on the outside surface. The product is designated as item number C078JA01245. The bank is a whimsical depiction of an elephant, and although it is a functional bank, the primary purpose of the article is to amuse a child or an adult.
CBP also classified the merchandise in NY N005466, NY C85171, and NY L86796 in heading 9503, HTSUS, as toys.
ISSUE:
Whether the subject “piggy” banks are classified in heading 9503, HTSUS, as other toys.
LAW AND ANALYSIS:
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
GRI 1 requires that classification be determined first 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 heading and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order. GRI 2(a) provides, in relevant part, that "[a]ny reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished articles has the essential character of the complete or finished article."
The Harmonized Commodity Description and Coding System Explanatory Notes ("ENs") constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs 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).
The 2019 HTSUS provision under consideration are as follows:
3924: Tableware, kitchenware, other household articles and hygienic or toilet articles, of plastics:
6307: Other made up articles
8543: Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof:
9503: Dolls, other toys
Note 2 to Chapter 39, states in relevant part:
2. This chapter does not cover:
(s) Articles of section XVI (machines and mechanical or electrical appliances)
(y) Articles of Chapter 95 (for examples, toys, games, sports equipment) The ENs to Heading 9503 state in relevant part:
(D) Other toys.
This group covers toys intended essentially for the amusement of persons (children or adults). However, toys which, on account of their design, shape or
constituent material, are identifiable as intended exclusively for animals, e.g., pets, do not fall in this heading, but are classified in their own appropriate heading. This group includes:
All toys not included in (A) to (C). Many of the toys are mechanically or electrically operated.
These include:
(xxii) Toy money boxes
* * * *
Classification within Chapter 39 is subject to Chapter 39, Legal Note 2(y), which excludes from Chapter 39 goods that are classifiable in Chapter 95, HTSUS. Therefore, if the subject articles are described in Chapter 95, they are precluded from classification in any of the provisions of Chapters 39, even if they are described therein. We must therefore first address whether the subject articles are described in heading 9503, HTSUS.
Although the term “toy” is not defined in the HTSUS, EN 95.03 provides that heading 9503, HTSUS, covers toys intended essentially for the amusement of persons. U. S. v. Topps Chewing Gum, 58 CCPA 157, C.A.D. 1022 (1971) (hereafter Topps), is illustrative in determining whether an article is intended for the amusement of the user. Topps held that an article may be considered a toy if it provides the same kind of amusement as a plaything. In Topps, various decorative buttons with humorous quotes which created evident and inherent amusement were classified as toys of heading 9503.
Where merchandise might have another purpose in addition to providing amusement, the primary purpose of the item must be its amusement value for it to be classified as a toy. In Ideal Toy Corp. v.
United States, 78 Cust. Ct. 28, 33 (1977), the Customs Court held that “when amusement and utility become locked in controversy, the question becomes one of determining whether the amusement is incidental to the utilitarian purpose, or the utility purpose is incidental to the amusement.”
Additionally, heading 9503, HTSUS, is a "principal use" provision within the meaning of Additional U.S. Rule of Interpretation (AUSRI) 1(a), HTSUS.1 For articles governed by principal use, Additional U.S. Rule of Interpretation 1(a), HTSUS, provides that, in the absence of special language or context which otherwise requires, such use "is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use." In other words, the article's principal use at the time of importation determines whether it is classifiable within a particular class or kind.
In determining whether the principal use of a product is for amusement, and thereby classified as a toy, Customs considers a variety of factors, including: (1) the general physical characteristics of the merchandise; (2) the expectation of the ultimate purchasers; (3) the channels, class or kind of trade in which the merchandise moves; (4) the environment of the sale (i.e., accompanying accessories and the manner in which the merchandise is advertised and displayed); (5) usage, if any, in the same manner as merchandise which defines the class.2 Not all of these factors will necessarily be relevant in every
1 Minnetonka Brands v. United States, 110 F. Supp. 2d 1020, 1026 (CIT 2000).
2 United States v. Carborundum Co., 63 C.C.P.A. 98, 102, 536 F.2d 373, 377 (1976).
situation. In the instant case, the factors for which information is available is primarily the physical characteristics.
While EN 95.03(D)(xxii) provides specifically for toy money boxes, any toy classifiable in heading 9503, HTSUS, particularly one with a dual purpose of utility and amusement, must meet the criteria discussed above. For example, in Nadel & Sons Toy Corp. v. United States, 4 CIT 20 (1982), the Court of International Trade discussed the application of these precedents to a plastic money bank in the figure of Uncle Sam. The figure was standing on a decorated platform which served as a receptacle of coins. One of Uncle Sam’s arms was extended and its hand was designed to accommodate a coin. When a button was pressed, the arm dropped the coin into a satchel that opened. The Court found that the purpose of the Uncle Sam bank was to save and store coins. The Court stated that “the coins are received into the article in a manner that amuses is incidental and not controlling,” and that there was little “amusement value” in such a pastime, which would be soon abandoned.
In the instant case, the physical features of the subject banks are not characteristic of a toy. These banks serve a utilitarian purpose, and if they provide any amusement, it is incidental to the utilitarian purpose. Similar to the toy bank in Nadel, the purpose of the banks is to save and store coins, with very little amusement value.
Additionally, although the subject banks in NY C85171 and NY 816190 have amusing appearances, as they are representations of recognizable licensed animated characters (“Mickey Mouse” and “Marvin the Martian”), they do “not promote pretend and role play, stimulate imagination, combat a child’s ennui, promote mimetic activity or provide the opportunity for children to develop manipulative skill or muscular dexterity” and are also not characteristic of a toy.3 Thus the subject merchandise in NY L82296, NY I87269, NY D84404, NY 816190, and the Football bank in NY C85171 are by application of GRI 1 not toys and are classified in heading 3924, HTSUS as household articles of plastic.
The Zillions Counting Toy pig (NY N005466), the Marvin the Martian bank (NY C85171), and the plush animal bank (NY L86796) are by application of GRI 3(b), composite goods classified in heading 3924. According to GRI 3(b), composite goods consisting of different materials or made up of different components shall be classified as if they consisted of the material or component which gives them their essential character. Although the GRIs do not provide a definition of “essential character,” EN (VIII) of GRI 3(b) provides guidance. According to this EN, the essential character may 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.
It is well-established that a determination as to “essential character” is driven by the particular facts of the case at hand.4 Essential character has traditionally been understood as “that which is indispensable to the structure, core or condition of the article, i.e., what it is” and as “the most outstanding and distinctive characteristic of the article.”5
3 Headquarters Ruling H275175, dated September 5, 2017 (citing Springs Creative Prods. Group v. United States, 35 I.T.R.D. (BNA) 1955, Slip Op. 13-107 (Ct. Int’l Trade Aug. 16, 2013).
4 See, e.g., Alcan Food Packaging (Shelbyville) v. United States, 771 F.3d 1364, 1366 (Fed. Cir. 2014) (“The ‘essential character’ of merchandise is a fact-intensive issue.”); see also EN VIII to GRI 3(b) (“The factor which determines essential character will vary as between different kinds of goods.”).
5 Structural Indus. v. United States, 360 F. Supp. 2d 1330, 1336 (Ct. Int’l Trade 2005).
The plastic components provide the essential character to the subject merchandise. The electronic components in NY N005466 and NY C85171 and the textile components in NY L86796 are merely used to provide minimal amusement. However, the plastic components are the most distinctive characteristic of the banks, as they are the bulk of the article as well as the component in which the coins are stored. The subject merchandise in NY N005466, NY C85171 and NY L86796 are also properly classified in heading 3924, HTSUS as household articles of plastic by application of GRI 3(b).
HOLDING:
By application of GRI 1 and GRI 3(b), the subject merchandise, is classified in heading 3924, HTSUS. The “piggy” banks are specifically described in subheading 3924.90.56, HTSUSA (Annotated), which provides for: “Tableware, kitchenware, other household articles and hygienic or toilet articles, of plastics: Other: Other.” The 2019 column one general rate of duty for subheading 3924.90.56, HTSUSA, is 3.4% ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usitc.gov/tata/hts.
EFFECT ON OTHER RULINGS
New York Ruling Letter L82296, dated February 22, 2005 is hereby MODIFIED in accordance with the above analysis.
New York Ruling Letters I87269, dated October 11, 2002, D84404, dated December 2, 1998, 816190, dated October 31, 1995, N005466, dated January 26, 2007, C85171, April 2, 1998, and L86796, dated August 5, 2005 are hereby REVOKED in accordance with the above analysis.
In accordance with 19 U.S.C. § 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Craig Clark, Director
Commercial and Trade Facilitation Division
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