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NY G80850




September 5, 2000

CLA-2-95:RR:NC:2:224 G80850

CATEGORY: CLASSIFICATION

TARIFF NO.: 9503.41.0010

Teresa A. Gleason
Baker & McKenzie
815 Connecticut Avenue, N.W.
Washington, D.C. 20006-4078

RE: The tariff classification and country of origin marking of a Hot & Cold Cuddly Bear made in China.

Dear Ms. Gleason:

In your ruling request on behalf of R.G. Barry Corporation dated July 20, 2000, you asked that Customs rule on the tariff classification and country of origin marking of an animal figure imported from Mexico.

The Hot & Cold Cuddly Bear is an amusing, cartoon-like representation of an animal with plush skin, stuffed head and appendages, and a torso compartment that is filled with what is termed energy packs. The Cuddly Bear figure is assembled and stuffed in China. It is exported to Mexico with a hollow torso and a Velcro opening in its back. In Mexico a Hot Pack consisting of dry, white, long-grain rice encased in a textile pouch and a Cold Pack consisting of a mixture of 70 percent water and 30 percent glycol, and polyurethane foam sealed in a water-tight polyurethane film bag are inserted into the animal compartment to form the completed Hot and Cold Cuddly Bear. The article is considered stuffed for tariff purposes.

The Cuddly Bear figure is designed for use in conjunction with the so-called energy packs primarily as a toy plaything for the amusement of children or adults. The Hot Pack component is designed to be heated in a microwave oven and thereafter retain and radiate heat for a number of hours. The Cold Pack can be refrigerated and will remain cold for a period of time. We assume the purpose of the energy packs is to impart warmth or cold to the figure to promote a utility attribute as well as enhance the play value of the Cuddly Bear.

Tariff Classification

The General Rules of Interpretation (GRI) governs classification of goods under the Harmonized Tariff Schedule of the United States (HTSUS). GRI 1 provides that classification shall be determined according to the terms of the headings and relative section or chapter notes. Where goods cannot be classified solely on the basis of GRI 1, the remaining GRIs will be applied, in the order of their appearance.

The Cuddly bear component, with or without the energy packs, is a whimsical and cartoon representation and in our opinion primarily used in the hands of the ultimate consumer as a plaything and a source of amusement. We find that it is a toy for tariff purposes notwithstanding any other secondary utility it may offer. The applicable heading for the toy Cuddly Bear component is heading 9503, HTSUS. The applicable heading for the Hot Pack component is heading 1404, HTSUS. Custom’s classification of the Cold Pack in heading 2905, HTSUS, is currently under review before Customs Headquarters. As the tariff does not contain a heading that specifically provides for toys and rice-filled or water/glycol-filled packs, together, classification cannot be based on GRI 1.

GRI 3 applies to goods that prima facie classifiable under two or more headings. GRI 3 states, in pertinent part, the following:

(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.

In determining the essential character of the subject good in accordance with GRI 3(b), Customs looks to various factors for guidance. Such factors include, but are not limited to, the nature of the component, its bulk, weight or value, or by the role of the constituent material in relation to the use of the good. After examining the Hot & Cold Cuddly Bear article, it is our opinion that the toy Cuddly Bear component imparts the essential character of the whole good. By bulk and cost and its primary role in the use of the article, the toy comprises the essentiality of the article. The packs, on the other hand, simply enhance or amplify the toy character of the toy bear. Thus, the merchandise is classifiable in Heading 9503, HTSUS, which is the provision for, inter alia, toys.

The applicable subheading for the Hot & Cold Cuddly Bear will be 9503.41.0010, HTSUS, the provision for other toys; stuffed toys representing animals or non-human creatures (for example, robots and monsters) and parts and accessories thereof. The general rate of duty is free.

Country of Origin Marking

The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its 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 of origin marking requirements and exceptions of 19 U.S.C 1304.

Section 134.1(b), of the Customs Regulations defines the term “country of origin” as:
the country of manufacture, production, or growth of any article of foreign origin entering the U.S. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the ‘country of origin’ within this part; however, for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin. (Emphasis added).

Section 134.1(j) of the regulations provides that the “NAFTA Marking Rules” are the rules promulgated for purposes of determining whether a good is a good of a NAFTA country. Section 134.1(g) defines a “good of a NAFTA country” as an article for which the country of origin is Canada, Mexico or the U.S. as determined under the NAFTA Marking Rules.

Part 102, Customs Regulations (19 CFR Part 102), sets forth the “NAFTA Marking Rules.” Section 102.11, Customs Regulations sets forth the required hierarchy for determining the country of origin for marking purposes. Section 102.11(a) states that “the country of origin of a good is the country in which:

The good is wholly obtained or produced;
The good is produced exclusively from domestic materials: or Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.”

“Foreign material” is defined in section 102.1(e) as “a material whose country of origin as determined under these rules is not the same country as the country in which the good is produced.”

In the instant case, a partially stuffed toy bear figure produced in China is imported into Mexico for processing and then imported into the U.S. The imported Hot & Cold Cuddly Bear is neither “wholly obtained or produced,” or “produced exclusively from domestic (Mexican) materials.” Therefore, for purposes of determining the origin of the imported good, section 102.11(a)(3) is the applicable rule that next must be applied. Under this rule, the country of origin of a good is the country in which each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 of the regulations. Section 102.20 of the rules sets forth the specific tariff classification changes and/or other operations which are specifically required in order for country of origin to be determined on the basis of operations performed on the foreign material(s) contained in a good.

As indicated above, the Hot & Cold Cuddly Bear article imported from Mexico is classifiable in subheading 9503.41.0010, HTSUS. Thus, the applicable change in tariff classification is set out in section 102.20(s), Section XX, Chapter 95 as follows:

9503.41-9504.49A change to toys classified in subheading 9503.41 through 9503.49 from any other heading; or a change to toys classified in subheading 9503.41 through 9503.49 from parts and accessories classified in subheading 9503.41 through 9503.49; or a change to parts and accessories classified in subheading 9503.41through 9503.49 from any other heading, except from heading 9502, 6111, or 6209.

The toy bear figure (absent the torso packs) when imported into Mexico from China is classifiable in subheading 9503.41.0010, HTSUS. In this case, we find that the toy Cuddly Bear article does not undergo any of the applicable changes in tariff classification set out in section 102.20(s) and, as a result, section 102.11(b) of the hierarchical rules must be applied next to determine the country of origin of the finished Hot & Cold Cuddly Bear.

Section 102.11(b) of the interim Customs Regulations provides that:

Except for a good that is specifically described in the Harmonized System as a set, or is classified as a set pursuant to General Rule of Interpretation 3, where the country of origin cannot be determined under paragraph (a), the country of origin of the good:

Is the country or countries of origin of the single material that imparts The essential character of the good, or

If the material that imparts the essential character of the good is fungible, has been commingled, and direct physical identification of the origin of the commingled material is not practical, the country or countries of origin may be determined on the basis of an inventory management method provided under the Appendix to Part 181 of the Customs Regulations.

The imported article is not described in the Harmonized System as a set, nor is it classified as a set pursuant to General Rule of Interpretation 3. Thus, section 102.11(c) is not applicable. Further, section 102.11(b)(2) is not applicable to the circumstances. In consequence, the rule that must be applied to determine the country of origin of the imported article is section 102.11(b)(1).

Applying section 102.11(b)(1) to the facts of this case, we find that the single material that imparts the essential character of the finished Hot & Cold Cuddly Bear is the textile toy likeness. Since the origin of this component does not change as a result of the processing performed in Mexico under section 102.20(s), as explained above, the country of origin of the imported Hot & Cold Cuddly Bear for marking purposes is the country of origin of the textile toy likeness when imported into Mexico. Accordingly, the individual toy Hot & Cold Cuddly Bear or its retail container in which the toy is sold to the ultimate purchaser in the U.S. must be marked to indicate China as the country of origin in accordance with the marking requirements of 19 U.S.C. 1304.

This ruling is being issued under the provisions of Section 177 of the Customs Regulations (19 C.F.R. 177).

A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Tom McKenna at 212.637.7015.

Sincerely,

Robert B. Swierupski
Director,
National Commodity

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