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HQ 962224




January 30, 2001

CLA-2 RR:CR:TE 962224 SS

CATEGORY: CLASSIFICATION

TARIFF NO.: 9502.91.0000

Bruce N. Shulman, Esquire
Stein Shostak Shostak & O’Hara
1620 L Street, N.W., Suite 807
Washington, D.C. 20036-5605

RE: Request for Reconsideration of Headquarters Ruling Letter 957705; “My Size Barbie” and “My Size Bride Barbie”; Doll Garments That Can Also Be Worn by Small Girls; Doll Clothing; Subheading 9502.91.0000, HTSUSA; North American Free Trade Agreement

Dear Mr. Shulman:

This is in response to your letter dated September 10, 1998, on behalf of your client, Mattel Inc., requesting reconsideration of Headquarters Ruling Letter (HQ) 957705, dated July 30, 1998. Pursuant to the request for reconsideration, a meeting at Customs Headquarters was held with counsel and a representative of Mattel Inc. on June 19, 2000. Additional submissions, dated July 14, 1999, and September 22, 2000, were received.

This letter is to inform you that after review of the matter, it has been determined that the “My Size Barbie” and “My Size Bride Barbie” dolls are not eligible for duty free treatment under the North American Free Trade Agreement (NAFTA).

FACTS:

The articles at issue are the “My Size Barbie” doll (Item No. 2517) and “My Size Bride Barbie” dolls (Items No. 12052 and 12053). The dolls are three feet high, stand erect, and are assembled in Mexico from arms, heads, legs and torsos of Mexican or U.S. origin and hair of Italian origin. After assembly, the dolls are dressed in textile doll garments of Chinese origin and are exported to the United States. The “My Size Barbie” garments consist of a decorated body suit, short skirt and long skirt. The “My Size Barbie” doll also comes with textile stretch slippers, earrings and a necklace/tiara. The “My Size Bride Barbie” garments consist of a decorated bodysuit, skirt, separate sleeves which slip over the arms and a veil. The “My Size Bride Barbie” also comes with stretch slippers and a necklace. The doll garments and accessories can also be worn by small children. The bodysuit and slippers, made of stretch-to-fit fabric, are said to fit girls who wear sizes 4 to 10. The skirts have adjustable tie waistlines. The sleeves and veil are held in place by elastic. Customs acknowledges that the doll is advertised as having clothing that can be shared with a small girl.

On January 14, 1995, you filed a Request for Internal Advice and sought information concerning the dolls’ eligibility for duty-free treatment under the North American Free Trade Agreement (NAFTA). You contended that the outfits worn by the dolls were classifiable as fancy dress of Chapters 61 or 62, of the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), at the time they were imported into Mexico and thus made the required tariff shift for the dolls to qualify for preferential treatment under the NAFTA. You argued that the outfits were fancy dress because they were “costumes” that could also be worn by children and were well-constructed and intended for repetitive and extended use.

HQ 957705 was issued in response to the Request for Internal Advice. However, the response given in HQ 957705 was limited to the issue of tariff classification under the HTSUSA at the time of importation into the United States. The ruling held that the dolls, as imported into the U.S. for retail sale, were classified under subheading 9502.10.0060, HTSUSA, as dressed dolls. Although HQ 957705 stated that the doll accessories were not of a class or kind of goods principally used as fancy dress of chapter 62, HTSUSA, the ruling did not directly address the issue of NAFTA eligibility. The ruling explicitly stated that the Value Branch would respond to the NAFTA eligibility claim upon receipt of all the necessary documentation. However, it appears that the issue was never addressed.

In your request for reconsideration you pointed out several erroneous statements in the ruling. We agree that the dolls imported in 1993 and 1994 were subject to a rate of duty of 12 percent ad valorem. We also agree that a doll imported wearing a dress is classified under General Rule of Interpretation (GRI) 1 as a dressed doll of subheading 9502.10.00, HTSUSA. However, it is our understanding that the dolls at issue are also imported with cosmetics (lip gloss, nail polish, etc.) and jewelry. Under those circumstances, the retail package is a set pursuant to GRI 3 with the
essential character provided by the doll. Lastly, we agree that the jewelry, cosmetics and hair would make the required tariff shift to Chapter 95, HTSUSA.

Most importantly, the request for reconsideration, correctly points out that HQ 957705 failed to determine the NAFTA eligibility of the dolls. We agree that the classification of the doll garments from China at the time of their import into Mexico must be determined in order to decide the issue of NAFTA eligibility. Thus, this ruling serves to resolve the issue of NAFTA eligibility that was not addressed in HQ 957705.

ISSUE:

Whether the “My Size Barbie” and “My Size Bride Barbie” dolls are eligible for duty free treatment under the NAFTA?

LAW AND ANALYSIS:

To be eligible for the duty preference provided under the NAFTA, goods must be “originating goods” within the rules of origin in General Note 12(b), HTSUSA. General Note 12(b) provides in pertinent part:

For the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as “goods originating in the territory of a NAFTA party” only if—

(i) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or

(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so that—

(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein . . .

Since the dolls are not wholly obtained or produced entirely in Canada, Mexico and/or the United States, the dolls will only qualify for NAFTA treatment if the provisions of General Note 12 (b)(ii)(A) are met. In other words, each of the non-originating materials must undergo a change in tariff classification as described in subdivision (t) or satisfy the rules set forth in subdivisions (r), (s), and (t) of General Note 12, in order to qualify for NAFTA treatment.

All parties agree that the dolls are classified under subheading 9502.10, HTSUSA, as dressed dolls. The rule of origin that is applicable to merchandise classified in subheading 9502.10, HTSUSA, states that merchandise qualifies for treatment under NAFTA if there has been a change to subheading 9502.10 from any other chapter. See GN 12(t)/95.10 rule 2(A). Thus, each of the foreign components must be classified outside chapter 95, HTSUSA, in order to make the required tariff shift for NAFTA eligibility. Since the only foreign components at issue are the doll garments and slippers from China, we focus on their classification at the time of import into Mexico in order to determine the NAFTA eligibility of the dolls.

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. The Explanatory Notes (EN) 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 GRI.

Doll accessories are classified under heading 9502, HTSUSA. More specifically, subheading 9502.91.0000, HTSUSA, explicitly provides for doll garments, garment accessories, footwear and headgear. The EN to heading 9502, HTSUSA, state that the accessories provision includes dolls’ clothing, shoes and hats. Accordingly, it appears that the garments and slippers for the “My Size Barbie” and “My Size Bride Barbie” dolls are classifiable under subheading 9502.91.0000, HTSUSA, at the time of import into Mexico.

However, you contend that because the garments and slippers can be worn by small girls, they are fancy dress of textiles classified in chapter 61 or 62, HTSUSA. Although the term “fancy dress of textiles” is not defined by the HTSUSA, it is clear that fancy dress of textiles is precluded from classification in chapter 95, HTSUSA.

It is also equally clear that that doll accessories are excluded from classification in chapter 61 or 62, HTSUSA. See note 1(t) to Section XI, HTSUSA. See note 1(e) to chapter 95, HTSUSA. In support of your argument that the doll garments and slippers are fancy dress of textiles, you cite a long line of cases on “costumes.” Costumes which are of a flimsy nature and construction, lacking in durability, and generally recognized as not being normal articles of apparel are classified in chapter 95, HTSUSA, while other costumes are classified as articles of fancy dress in chapter 61 or 62, HTSUSA. See HQ 957318, dated November 15, 1994. However, the costume rulings are distinguishable from the present case in that they involve garments worn by humans. None of the costume rulings involve garments worn by dolls. Accordingly, the rulings on costumes are not controlling in this instance.

Furthermore, we note that the costume rulings are based on the EN to heading 9505, HTSUSA, which cover festive, carnival or other entertainment articles. The EN indicate that articles of fancy dress made of non-durable materials are classified under heading 9505, HTSUSA, while articles of fancy dress of textile materials are classified in chapter 61 or 62, HTSUSA. In contrast, there is nothing that limits doll clothing of heading 9502, HTSUSA, to being of a non-durable nature. Indeed, Customs is aware of doll clothing made by Mattel, Inc. which is extremely well-made. Unlike the costume rulings, the subject garments and slippers do not have any characteristics that make them inappropriate for classification as doll clothing under heading 9502.91, HTSUSA.

Customs obtained copies of a Transportation Entry, Invoice, Shipping Document and Bill of Materials which all indicated that the importer considered the outfits to be “doll accessories” classified under heading 9502.91, HTSUSA, at the time of import into Mexico. Although Mattel Inc. was in a position to verify how the goods were actually entered into Mexico, no entry documents, visas or similar evidence was presented to establish that the outfits were actually entered as articles of apparel or clothing accessories classified under chapter 61 or 62, HTSUSA. Accordingly, we find that relevant documentation supports the conclusion that the subject garments and slippers were classifiable under subheading 9502.91, HTSUSA, at the time of import into Mexico.

You contend that the use of the garments is immaterial to the classification of the garments. However, Additional U.S. Rule of Interpretation 1(A) states that a tariff classification controlled by use is to be determined in accordance with the use at the time of importation of that class or kind to which the imported goods belong and the controlling use is principal use. Although the textile garments and slippers may also be worn by little girls, they are primarily used with the dolls to which they will be assembled. Customs believes the principal use of the outfits is as doll clothing. The fact that a child can also put them on is secondary. The garments and slippers belong to a class or kind of goods which are principally used for the purpose of adorning dolls.

Furthermore, the National Import Specialist for toys advises that certain characteristics of the “My Size Barbie” and “My Size Bride Barbie” dolls necessitate specially made doll clothing. The dolls are very stiff and their arms, body and legs do not bend. The dolls are difficult to dress and undress due to the fact that their arms cannot be raised over their heads. Accordingly, the outfits had to be created in layers in order to give the appearance of a dress. Children’s costumes are not normally made in this manner. Thus, the design of the garments support the conclusion that principal use of the garments is as doll clothing.

The garments and slippers at issue are doll accessories at the time of import into Mexico. They are imported for the sole purpose of being assembled onto the dolls. We disagree with your argument that the classification of the dressed doll at the time of import into the United States has no relevance in determining the classification of the garments when entered into Mexico. The fact that the garments and slippers are assembled on the dolls in Mexico is probative of the fact that they are indeed doll accessories at the time of import into Mexico.

Although you agree that the garments are doll clothing when they are placed on the dolls and imported into the United States, you argue that the garments are for little girls at the time of import to Mexico. You cite cases in which garments imported in bulk were classified under chapter 61 or 62, HTSUSA, but then became toy sets under chapter 95, HTSUSA, when they were later combined with other articles. However, the instant case is distinguishable in that at the time of import into Mexico, the garments are dedicated to the dolls as evidenced by the importer’s documentation, design features necessitated by the dolls’ characteristics and the processing in Mexico with the dolls.

You assert that it is incorrect for Customs to consider the intent of the importer to unite the outfits with dolls. In the ruling you cited on suits and separates, Customs did not want identical goods to be classified differently based on how the importer intended to merchandise the goods after importation. See HQ 962125, dated May 5, 2000. Similarly, in the instant case, Customs does not want the garments to be classified differently based on whether the importer says they are for children or for dolls. In the suits and separates rulings, there was a legal note that set forth the requirements for classification as a suit and Customs held that if the goods met the terms of the note, they would be classified as a suit. Unfortunately, there are no similar legal notes in the instant case. As stated in HQ 962125, Customs classifies goods according to their condition at the time of importation. Customs finds that the instant outfits are doll clothing, which can secondarily be worn by small girls, in their condition at the time of importation into Mexico.

Lastly, we note that GN12(t)/95.10 Rule 2(B), HTSUSA, provides an additional rule of origin which allows a change from 9502.91-9502.99, HTSUSA, if certain regional value content requirements are met. Since no information was submitted to support a claim under Rule (2)(B), we decline to consider the NAFTA eligibility of the dolls under Rule (2)(B).

HOLDING:

The doll garments and slippers do not meet the tariff shift requirements of General Note 12(t)/95.10(2)(A), HTSUSA. Thus, the “My Size Barbie” and “My Size Bride Barbie” dolls are not eligible for duty free treatment under the North American Free Trade Agreement.

Sincerely,

John Durant, Director
Commercial Rulings Division

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