CLA-2 OT:RR:CTF:TCM H122351 EGJ
Kathy Mastracche
Procurement Director
Reeves International
14 Industrial Road
Pequannock, NJ 07440
RE: Revocation of NY N103196: Classification of “Makedo” Kits
Dear Ms. Mastracche:
This is in response to your correspondence dated June 14, 2010, in which you requested reconsideration of New York Ruling Letter (NY) N103196, dated May 20, 2010, issued to you concerning the tariff classification of the “Makedo” kits. In NY N103196, U.S. Customs and Border Protection (CBP) classified the subject merchandise in heading 3926, HTSUS, as other articles of plastics. We have reviewed NY N103196 and find it to be in error. For the reasons set forth below, we hereby revoke NY N103196.
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, notice of the proposed revocation was published on April 29, 2015, in the Customs Bulletin, Volume 49, No. 17. CBP received no comments in response to this notice.
FACTS:
The subject merchandise is the “Makedo” series of construction kits. In NY N103196, the Makedo kits are described as follows:
The “Makedo” kits are intended to be used to create original projects using materials found around the home, such as cardboard boxes, plastic containers, egg cartons and fabric scraps. The primary components of the kits are connectors, hinges and a construction tool. The connectors are used to attach the found pieces and scraps together. Each connector consists of a ridged pin with a flat head and a clip that secures onto the ridges of the pin. When the clip is squeezed it releases the pin to allow reuse of both parts. The hinges have holes on each side so they can be secured with the pin and clip connector. The hinges, which can pivot freely or lock in place, can join or create a corner between two materials or can form a swiveling moving part. Each kit contains a construction tool made entirely of plastics that has a serrated blade on one side to safely cut materials such as cardboard and a point on the other to pierce holes. Each kit also includes an inspiration poster featuring project ideas.
According to your reconsideration request, the Makedo kits are marketed and advertised as “green” toys because children use them to construct different articles from found materials, such as cardboard, scrap paper, newspapers, Styrofoam cups, etc. Some Makedo kits include stickers to decorate the finished project. The Makedo kits were featured in the Earth-Friendly Product Zone at New York City’s 2010 Toy Fair. Also, the Makedo kits are sold in the toy sections of online retailers such as Walmart.com, Amazon.com and Ebay.com. The Makedo kits range in retail price from $20 to $60, depending upon the size of the kit. The Makedo Flowers kit has the following statement on its package: “Makedo is a reusable system for creating things from the stuff around you. It aims to inspire social change through playful creativity.” Pictures of sample Makedo kits are provided below:
ISSUE:
Are the Makedo kits classified as toys of heading 9503, HTSUS, or as other articles of plastics of heading 3926, HTSUS?
LAW AND ANALYSIS:
Classification under the Harmonized Tariff Schedule of the United States (HTSUS) 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 GRIs may then be applied.
The HTSUS headings under consideration are the following:
3926 Other articles of plastics and articles of other materials of headings 3901 to 3914:
* * *
9503 Tricycles, scooters, pedal cars and similar wheeled toys; dolls’ carriages; dolls, other toys; reduced-scale (“scale”) models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof:
* * *
Note 2(y) to Chapter 39 states that:
2. This chapter does not cover:
(y) Articles of chapter 95 (for example, toys, games, sports equipment)
* * *
Additional U.S. Rule of Interpretation 1(a), HTSUS, provides that:
1. In the absence of special language or context which otherwise requires:
(a) a tariff classification controlled by use (other than actual 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.
* * *
The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff 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 at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
EN 95.03 states, in pertinent part:
Other toys.
This group covers toys intended essentially for the amusement of persons (children or adults)….
These include:
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(iii) Constructional toys (construction sets, building blocks, etc.).
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(xviii) Educational toys (e.g., toy chemistry, printing, sewing and knitting sets).
***
Collections of articles, the individual items of which if presented separately would be classified in other headings in the Nomenclature, are classified in this heading when they are put up in a form clearly indicating their use as toys (e.g., instructional toys such as chemistry, sewing, etc., sets).
* * *
Note 2(y) to Chapter 39 excludes articles of Chapter 95 from classification in Chapter 39. If the Makedo kits are classifiable in Chapter 95, they cannot be classified in Chapter 39. As such, we will first determine whether the Makedo kits can be classified as toys of heading 9503, HTSUS.
Heading 9503 provides, in pertinent part, for “other toys.” In Minnetonka Brands v. United States, 110 F. Supp. 2d 1020, 1026 (Ct. Int’l Trade 2000) (“Minnetonka”), the U.S. Court of International Trade (CIT) determined that a toy must be designed and used principally for amusement and should not serve a utilitarian purpose. Thus, the CIT concluded that heading 9503, HTSUS, is a “principal use” provision within the meaning of Additional U.S. Rule of Interpretation 1(a) (AUSR 1(a)), HTSUS. Id.
Applying AUSR 1(a), the Makedo kits must belong to the same class or kind of goods which have amusement as a principal use, i.e. toys. In United States v. Carborundum Co., 536 F.2d 373, 377 (1976), the U.S. Court of Customs and Patent Appeals stated that in order to determine whether an article is included in a particular class or kind of merchandise, the court must consider a variety of factors, including: (1) the general physical characteristics of the merchandise; (2) the channels, class or kind of trade in which the merchandise moves (where the merchandise is sold); (3) the expectation of the ultimate purchasers; (4) the environment of the sale (i.e., accompanying accessories and marketing); (5) usage, if any, in the same manner as merchandise which defines the class; (6) the economic practicality of so using the import; and (7) the recognition in the trade of this use. Id. While these factors were developed under the Tariff Schedule of the United States (predecessor to the HTSUS), the courts have also applied them under the HTSUS. See, e.g. Minnetonka, 110 F. Supp. 2d 1020, 1027; see also Aromont USA, Inc. v. United States, 671 F.3d 1310 (Fed. Cir. 2012), Essex Manufacturing, Inc. v. United States, 30 C.I.T. 1 (2006).
In Springs Creative Products Group v. United States, 47 Cust. B. & Dec. 37, 131 - 146 (Sept. 4, 2013) (“Springs Creative”), the U.S. Court of International Trade (CIT) applied the Carborundum factors to determine the tariff classification of the Make-it-Yourself No-Sew Fleece Throw Kits (NSF throw kits). Except for scissors, the NSF throw kits contain all the materials needed to make a finished fleece throw blanket. Id. at 134. The CIT noted that the NSF throw kits are marketed with images and videos of an adult and child having fun while assembling the throw together. Id. at 136. The CIT stated that the NSF throw kits promote the development and education of young children by helping a child develop skills such as manual dexterity, cutting, tying and counting. Id. Also, the CIT pointed out that the NSF throw kits cost more than a finished fleece throw. Id. at 135. Finally, the CIT cited to the ENs to heading 95.03, which state that the heading includes constructional toys and educational toys, such as sewing and knitting sets. Id. at 140. The ENs further state that collections of articles, which are classifiable in different headings, are classified together when they are put up in a form clearly indicating their use as toys. Id. The CIT determined that the NSF throw kits were classifiable as toys of heading 9503, HTSUS, for the following reasons:
[T]he court finds the subject merchandise to be of the class or kind of merchandise whose principle use is amusement, diversion, or play, rather than the practicality of a fleece throw. The unique physical characteristics of the merchandise, the design and marketing of the merchandise as craft kits and as items of amusement (rather than as finished fleece throws or as fleece material), the expectation of the ultimate purchaser that these items will be used to create a fleece throw, the regular use of the merchandise by children for amusement purposes, the fact that the merchandise sells at a significant price premium to finished fleece throws, and other facts revealed at trial support this conclusion. Id.
Turning to the Makedo kits, the physical characteristics of the kits are that they consist of plastic hinges, connectors, clips, a kid-safe cutting tool, an inspiration poster, and sometimes stickers. With regard to the channels of trade, we note that Makedo kits are sold in the toy departments of large retailers. The Makedo kits range in retail price from $20 to $60, depending upon the size of the kit. This cost is likely much higher than the cost of the individual components, such as plastic hinges and stickers. The kits are marketed towards children to inspire creative thinking through play. The goal is for children to combine the Makedo kit connectors with found materials to create crafts such as cardboard robots, newspaper flowers, scrap paper dollhouses, etc. The Makedo kits were featured at New York City’s Toy Fair, which indicates that the trade recognizes their use as toys.
Like the NSF throw kits in Springs Creative, we find that the principal use of the Makedo kits is amusement. Children can spend hours building different types of crafts with the hinges and connectors. They can also decorate their creations with the stickers. CBP has classified similar creative craft kits as toys of heading 9503, HTSUS. See, e.g. NY 811972, dated July 19, 1995 (Make Your Own Fort kits), NY F80917, dated January 5, 2000 (Make Your Own Bubble Gum, Chocolate and Soap kits), and NY L81098, dated December 6, 2004 (Wood Craft Making Kits). As such, the Makedo kits are also classifiable as toys of heading 9503, HTSUS. Since the Makedo kits are classifiable in heading 9503, HSTUS, Note 2(y) to Chapter 39 excludes them from classification in Chapter 39.
HOLDING:
By operation of GRI 1, AUSR 1(a) and GRI 6, the Makedo kits are classifiable as toys in heading 9503, HTSUS, and are specifically provided for in subheading 9503.00.00, HTSUS, which provides for “Tricycles, scooters, pedal cars and similar wheeled toys; dolls’ carriages; dolls, other toys; reduced-scale (“scale”) models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof: Other.” The 2015 column one, general rate of duty is free.
Duty rates are provided for your convenience and 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.
EFFECT ON OTHER RULINGS:
NY N103196, dated May 20, 2010 is hereby revoked.
In accordance with 19 U.S.C. §1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division