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HQ 964923




March 30, 2001

CLA-2 RR:CR:TE 964923 mbg

CATEGORY: CLASSIFICATION

TARIFF NO.: 9503.90.0045

Julie Matthews, Esq.
Pleasant Company
8400 Fairway Place
Middleton, WI 53562-2254

RE: Classification of doll carrier from China; PD G83798- Void Ab Initio

Dear Ms. Matthews:

This is to inform you that Customs has reviewed Port Decision (“PD”) G83798, issued to you on November 22, 2000, in which a doll carrier from China was classified as a toy in subheading 9503.90.0045 of the Harmonized Tariff Schedule of the United States Annotated (“HTSUSA”). For the reasons set forth below, PD G83798 is void ab initio.

FACTS:

PD G83798 states:

The subject merchandise is described as a “Bitty Baby Carrier.” It is made of textile and is designed to carry a small doll. It measures approximately 12 3/8 inches long and 9 ¾ inches wide. It has two (2) adjustable shoulder straps to facilitate wearing and two (2) small straps to secure the doll. It also has a small pocket that allows the inclusion of a small toy animal.

In PD G83798, the subject merchandise was classified as an “other toy” in subheading 9503.90.0045, HTSUSA, with a free rate of duty.

ISSUE:

What is the proper classification of the subject merchandise under the HTSUSA?

LAW AND ANALYSIS:

Prior to addressing the classification issue presented, it is necessary to discuss the duties, responsibilities and obligations of parties seeking rulings from Customs in the post “Mod Act” era. The North American Free Trade Agreement Implementation Act of 1993 included major provisions in Title VI of that Act relating to Customs Modernization which have come to be known as the “Mod Act.” The Mod Act has transformed the way the Customs Service and importers do business. Primary among these changes is a new responsibility called informed compliance that is shared between the trade community and the U.S. Customs Service. Informed compliance permeates virtually all import transactions and determines how government and the trade community will interact. Informed compliance has inspired new protocols and stratagems under which the importing community and government have new rights and responsibilities toward each other.

At the heart of informed compliance is a strategy called reasonable care, in which the trade community demonstrates its exercise of due diligence by following the suggestions and protocols promulgated by the Customs Service in its publications, which include not only the various informed compliance publications available on Customs Website (www.customs.gov), but also include Customs rulings, Customs Regulations, Court decisions and law.

Informed compliance is a shared responsibility between Customs and the importing community by which Customs communicates its requirements to the trade, and the people and businesses subject to those requirements conduct their regulated activities in accordance with U.S. laws and regulations. A key component of informed compliance is the expectation that the importer will exercise reasonable care in his or her importing operations.

Informed compliance benefits both parties. When voluntary compliance is achieved, Customs resources need not be inefficiently expended. From the trade perspective, when voluntary compliance is attained, compliant parties are less likely to have their shipments examined or their entries reviewed and more likely to receive their merchandise quickly.

Reasonable care is an explicit responsibility on the part of the importer. Despite its seemingly simple connotation, the term reasonable care defies easy explanation because the facts and circumstances surrounding every transaction differ, from the experience of the importer to the nature of the imported articles.

During the course of any transaction, however, it is the responsibility of the importer to provide the Customs Service with all information necessary to make a proper decision. When a ruling request is made, section 177.2 of the Customs Regulations (19 C.F.R. §177.2) sets forth procedures as to the information which must be provided to Customs. These regulations state in relevant part:

(b) Content-(1) Generally. Each request for a ruling must contain a complete statement of all relevant facts relating to the transaction. Such facts include . . . a description of the transaction itself, appropriate in detail to the type of ruling requested.

(2) Description of transaction- (i) Generally. The Customs transaction to which the ruling request relates must be described in sufficient detail to permit the proper application of relevant Customs and related laws.

(ii) Tariff classification rulings. (A) If the transaction involves the importation of an article for which a ruling as to its proper classification under the provisions of the Harmonized Tariff Schedule of the United States is requested, the request for a ruling should include a full and complete description of the article and whenever germane to the proper classification of the article, information as to the article’s chief use in the United States . . . .

As stated in section 177.9 of the Customs Regulations (19 C.F.R. §177.9), a ruling letter issued by Customs is binding on all ports and represents the position of the Customs Service with respect to that particular transaction:

(a) Effect of ruling letters generally. A ruling letter issued by the Customs Service under the provisions of this part represents the official position of the Customs Service with respect to the particular transaction or issue described therein and is binding on all Customs Service personnel in accordance with the provisions of this section until modified or revoked.

In order for an accurate classification determination to be made, the onus is on the party seeking a ruling to provide all necessary information for the classification of that merchandise to Customs. The facts of this case indicate that there has been a material omission of facts with respect to the subject merchandise. PD G83798 was issued to Pleasant Company on November 22, 2000. However, at the time PD G83798 was issued to Pleasant Company, you failed to inform Customs that a ruling had previously been issued to them on the same merchandise. According to our records, Pleasant Company also received a ruling on the classification of a doll carrier on June 12, 2000, in New York ruling letter (“NY”) F87328. Furthermore, on September 7, 2000, counsel for Pleasant Company filed a motion for reconsideration of NY F87328 with Customs. The failure to indicate that a ruling letter had been issued on the same merchandise and was under reconsideration by Customs Headquarters when Pleasant Company filed a ruling request that resulted in the issuance of PD G83798 was not in accordance with the responsibilities of an importer nor in accordance with the Customs Regulations (19 C.F.R. §177.2).

At the time PD G83798 was issued, Customs had no indication that insufficient information had been submitted to warrant the issuance of a ruling as per the terms of sections 177.3 and 177.7 of the Customs Regulations. Based on this omission of relevant facts in connection with the issuance of PD G83798, we find that the ruling was void ab initio (i.e., null from the beginning). Accordingly, there is no need to either revoke or modify PD G83798. (See also, Headquarters Ruling Letters (HQ) 961505, issued August 20, 1998, and HQ 952349, issued August 17, 1992.) The use of PD G83798 in the context of any import transactions will raise issues of reasonable care and may result in penalties under 19 U.S.C. 1592. This office will continue to process the request for reconsideration of NY F87328, dated June 12, 2000, filed by counsel on behalf of Pleasant Company. That ruling, NY F87328, reflects the official position of the Customs Service until modified or revoked under 19 U.S.C. 1625(c). That ruling classified the merchandise as a handbag in subheading 4202.22.4500, HTSUSA.

HOLDING:

The doll carrier is classified in subheading 4202.22.4500, HTSUSA, which provides for “Trunks, suitcases, vanity-cases, attaché cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder boxes, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper: Handbags, whether or not with shoulder strap. Including those without handle: With outer surface of textile materials: Other: Of vegetable fibers and not of pile or tufted construction: Of cotton.” The general column one rate of duty is 6.6 percent ad valorem and the textile restraint number is 369.

The designated textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest that you check, close to the time of the shipment, the Status Report on Current Import Quotas (Restraint Levels), an internal issuance of the U.S. Customs Service, which is available for inspection at your local Customs office.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories applicable to textile merchandise, you should contact your local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.

Sincerely,

John Durant, Director

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