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HQ W967855




July 19, 2007

CLA-2 OT:RR:CTF:TCM W967855 HMC

CATEGORY: CLASSIFICATION

TARIFF NO.: 6702.90.6500

Ms. Pamela Johnson
Starbucks Coffee Company
Tax & Customs Department
2401 Utah Ave., South
Seattle, WA 98134

RE: Christmas Basket Garland; Sprig; Reconsideration of New York Ruling K88101; Modified

Dear Ms. Johnson:

This is in response to your letter, dated July 21, 2005, on behalf of Starbucks Coffee Company, concerning your request for reconsideration of New York Ruling (“NY”) K88101, dated August 5, 2004, issued by Customs and Border Protection (“CBP”), which classified a sprig, identified as the “Christmas Basket Garland” under subheading 6702.90.6500 of the Harmonized Tariff Schedule of the United States (“HTSUS”). For the reasons set forth below, we hereby modify NY K88101.

Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. 1625(c)), 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, 2186 (1993), notice of the proposed modification of NY K88101 was published in the Customs Bulletin, Volume 41, Number 22, on May 23, 2007. CBP received no comments during the notice and comment period that closed on June 22, 2007.

FACTS:

On July 21, 2004, Starbucks Coffee Company (“Starbucks”) requested CBP provide a classification ruling for a sprig identified as the “Christmas Basket Garland,” SKU 186985, (“sprig”). The sprig is composed of “poinsettia” leaves made of white paper. The paper leaves are attached to wire stems that have been wrapped with white paper. The poinsettia sprig beads are made of Styrofoam and coated with red colored lacquer. The wire stems are bound together with white paper to form an artificial flower. They are attached together to form a sprig that measures 10.25” x 6” x 2.” The artificial poinsettia sprig is adorned with a red ribbon. The sprig can be hooked onto a basket. There is no dispute that the paper leaves impart the essential character to the poinsettia sprig.

In NY K88101, dated August 5, 2004, in response to Starbucks’ original ruling request of July 21, 2004, CBP provided the classification of the sprig. NY K88101 held that the applicable heading for the articles under consideration was heading 6702, HTSUS, which provide for “Artificial flowers, foliage and fruit and parts thereof; articles made of artificial flowers, foliage or fruit.”

Starbucks contends that the sprig is classifiable under subheading 9505.10.50, HTSUS. A telephone conference was conducted with Starbucks’ representatives and members of my staff on October 27, 2006, to discuss this matter. We note that CBP recently issued protest decision HQ W968134, dated March 13, 2007, in which it classified identical merchandise under subheading 6702.90.65, HTSUS, as “[a]rtificial flowers, foliage and fruit and parts thereof; articles made of artificial flowers, foliage or fruit: of other materials: other: other.”

ISSUE:

Whether the Starbucks’ sprig, made of artificial paper leaves should be classified in heading 9505, HTSUS, as a festive article or in heading 6702, HTSUS, as an article made of artificial flowers, foliage or fruit.

LAW AND ANALYSIS:

Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that virtually all goods are classified by application of GRI 1, that is, 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 provisions under consideration are as follows:

6702 Artificial flowers, foliage and fruit and parts thereof; articles made of artificial flowers, foliage or fruit: 6702.90 Of other materials:
Other
6702.90.65 Other.

9505 Festive, carnival or other entertainment articles, including magic tricks and practical joke articles;
parts and accessories thereof:

9505.10 Articles for Christmas festivities and parts and accessories thereof: Other
9505.10.50 Other.

In NY K88101, CBP determined that the sprig was not a festive article and classified it as “other artificial flowers, foliage and fruit and parts thereof; articles made of artificial flowers, foliage or fruit: of other materials” of subheading 6702.90.6500, HTSUS. NY K88101 found that classification under heading 9505, as a festive article was not applicable to the subject merchandise because it was not a complete article for decorative purposes like wreaths and swags and because it was not used to decorate the home. Starbucks believes that NY K88101, dated August 5, 2004, is not correct. Instead, Starbucks contends that the sprig should be classified as other articles of Christmas festivities and parts and accessories thereof of subheading 9505.10.5020, HTSUS. Starbucks is of the view that the sprig is a complete article and satisfies the criteria used to classify merchandise as festive articles. The chapter notes to Chapter 95, HTSUS, do not exclude artificial flowers and foliage. Similarly, the chapter notes to Chapter 67, HTSUS, do not exclude festive articles.

Note 1(e) to Chapter 67, HTSUS, does not specifically exclude festive articles from Chapter 67, HTSUS. It states that “1. [t]his chapter does not cover: (e) [t]oys, sports equipment, or carnival articles (chapter 95);” Also, Note 3 to Chapter 67, HTSUS, states that “Heading 6702 does not cover: (b) Artificial flowers, foliage or fruit of pottery, stone, metal, wood or other materials, obtained in one piece by molding, forging, carving, stamping or other process, or consisting of parts assembled otherwise than by binding, gluing, fitting into one another or similar methods.” Inasmuch as the subject merchandise is artificial flowers or foliage consisting of parts assembled by binding, gluing, fitting into one another or similar methods, it is not excluded from heading 6702, HTSUS.

We are thus left with the question as to whether the sprig in question is classifiable in heading 9505, HTSUS, as a festive article or in heading 6702, HTSUS, as an article made of artificial flowers, foliage or fruit. If the article in question is prima facie classifiable in headings 9505 and 6702, we believe that GRI 3 must be consulted. We must therefore first determine whether the subject sprig qualifies as a festive article of heading 9505, HTSUS.

In Midwest of Cannon Falls, Inc. v. United States, 20 C.I.T. 123 (Ct. Int’l Trade, 1996), aff’d in part, rev’d in part, 122 F.3d 1423 (Fed. Cir. 1997) (hereinafter Midwest), the Court addressed the scope of heading 9505, HTSUS, specifically the class or kind of merchandise termed “festive articles,” and provided guidelines for classification of such goods in the heading.

Previously, CBP has noted that several items composed of artificial foliage satisfy the Midwest guidelines and are recognized as festive articles for the Christmas holiday. These items include evergreen branches, poinsettia, pine cone, pine needle leaves, holly leaves, laurel leaves, holly berries or mistletoe, which are incorporated into a wreath, centerpiece, candle ring, garland, swag or sprig. See HQ 967237, dated September 9, 2004; See also, NY I89773, dated January 27, 2003.

When examining the sprig, as a whole, it must be evident that the merchandise is associated or used with the particular festival of Christmas. Furthermore, in HQ 950999, dated April 16, 1992, garlands with artificial foliage were classified in 9505.10.40, HTSUS, as festive articles for Christmas festivities. The following is the language from HQ 950999 wherein CBP explained which types of garlands, wreaths, etc. would be classifiable in 9505.10, HTSUS, as festive articles for Christmas festivities.

Those artificial foliage items which qualify as Christmas articles of subheading 9505.10 include wreaths, garlands, candle rings, centerpieces -- complete articles -- made up of foliage commonly and traditionally associated with Christmas [i.e., artificial poinsettias, pine cones, pine needle leaves, evergreen branches, holly berries, holly leaves, laurel leaves, or mistletoe (singly or combination thereof)]. (This largely restates Customs position under the TSUS). These articles can be further decorated with plastic sleighs, miniature Santas, glass balls, ribbon, etc. Stylized/modern versions of Christmas wreaths, garlands, etc. (i.e., those articles decorated with neon poinsettias, mauve glass balls, etc.) also qualify as festive.

We must determine nevertheless whether the Starbucks decorative article under consideration can be classified as a festive article in heading 9505, HTSUS, in light of the Midwest decisions. In making this determination, we must analyze whether the decoration under consideration fits the criteria for festive articles that are classified in heading 9505, HTSUS. The Court of International Trade in Midwest was aided by the criteria established in the case United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F.2d 373 (1976), cert. denied, 429 U.S. 979 (hereinafter “Carborundum”). Those criteria include the general physical characteristics of the article, the expectation of the ultimate purchasers, the channels, class or kind of trade in which the item moves, the environment of the sale (accompanying accessories and the manner in which the item is advertised and displayed), the use in the same manner as merchandise which defines the class, the economic practicality of so using the import, and recognition within the trade of this use. In considering the Midwest standards, we believe that the sprig is not classifiable in heading 9505, HTSUS.

As stated in HQ W968134, dated March 13, 2007, it is our view that the sprig under consideration in this instance is not immediately recognizable as a Christmas decoration. Although Starbucks has presented evidence to show that it was intended for use as a decoration in its stores during Christmas time, we believe that based on its appearance, the sprig does not seem to be exclusively associated with Christmas celebrations. In other words, in our judgment, there seems to be no reason why it could not be used as a decoration at another time of the year. The sprig that is under consideration in this instance is not the customary sprig that is typically exhibited as Christmas decorations. It is not made of tinsel nor does it have the usual customary Christmas colors of red and green. Although it is made of white paper and is supposed to resemble poinsettia leaves and flowers, we do not believe that most people would be able to discern that the white paper leaves are supposed to be artificial poinsettia leaves and flowers that are connected with the Christmas celebration. While the sprig is certainly used by Starbucks as a decoration during the Christmas holiday, if it was set apart from other Christmas decorations, we do not think that it would immediately stand out as an item that would only be seen at Christmas time. Rather, in our judgment, the sprig could be easily used to decorate an area during other celebratory occasions besides the Christmas holidays. Thus, we believe that it would not be aberrant to display the sprig as a decoration at times during the year other than Christmas.

Starbucks claims that the sprig was used in its stores as a decoration only during the Christmas holiday season and that it had no other use. Starbucks further claims that the chapter notes and ENs to heading 9505, HTSUS, do not exclude articles from the heading if they are not primarily for use in the home. To support this point, Starbucks submitted a copy of instructions that were issued to its stores from a Holiday 2004 Workbook concerning the display of the holiday decorations. These instructions indicate that all stores will receive the Starbucks holiday trim to create a festive atmosphere with a unified theme. The holiday trim will be used from holiday setup through December 25, and on December 26, it will be removed. The instructions further explained that the holiday decorations will be removed and SKU’d for sale, but that the holiday trim is not to be sold prior to December 26.

Although we recognize that, on a case-by-case basis, an article displayed outside the house may be found to be a festive article and that sprigs may be considered complete articles, such considerations are unnecessary in this case. We disagree with Starbucks’s contention that the subject sprig was intended as a decoration only during the Christmas holiday season and that it had no other use. As stated above, in this instance, the fact that the subject merchandise is used during the Christmas holidays did not make it a festive article of heading 9505, HTSUS. We note that the sprig was offered for sale to consumers after the Christmas holiday. Thus, it is not unreasonable to conclude that consumers other than Starbucks could buy the sprig and subject it to a different use. The sprig, we therefore believe, is not closely associated with the Christmas holiday as it may be equally used and displayed on occasions other than the Christmas holidays. Accordingly, we find that the sprig in this case is not classified as a festive article in heading 9505, HTSUS, but instead in heading 6702, HTSUS, which provides for: “Artificial flowers, foliage and fruit and parts thereof: articles made of artificial flowers, foliage or fruit.” For a similar finding see HQ W968134, dated March 13, 2007, a protest decision involving the same merchandise considered in this case. The ENs to heading 6702, HTSUS, which provides for artificial foliage, support the classification of the subject sprig as articles made of artificial flowers, foliage or fruit. The Harmonized Commodity Description and Coding System Explanatory Notes (EN’s) constitute the official interpretation of the Harmonized System. While not legally binding on the contracting parties, and therefore not dispositive, the EN’s provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the Harmonized System. CBP believes the EN’s should always be consulted. See T.D. 8980, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989). The EN to heading 6702, HTSUS, which states, in pertinent part:

This heading covers:

Artificial flowers, foliage and fruit in forms resembling the natural products, made by assembling various parts (by binding, glueing, assembling by fitting into one another or similar methods). This category also includes conventional representations of flowers, foliage or fruit made up in the manner of artificial flowers, etc.

Parts of artificial flowers, foliage or fruit (e.g., pistils, stamens, ovaries, petals, calyces, leaves and stems).

Articles made of artificial flowers, foliage or fruit (e.g., bouquets, garlands, wreaths, plants), and other articles, for use as trimmings or as ornaments, made by assembling artificial flowers, foliage or fruit.

HOLDING:

By application of GRI 1, the sprig, identified as the “Christmas Basket Garland” is classified in heading 6702, HTSUS. It is specifically provided for in subheading 6702.90.6500, HTSUS, which provides for: “Artificial flowers, foliage and fruit and parts thereof; articles made of artificial flowers, foliage or fruit: Of other materials: Other: other.” The column one duty rate is 17 percent. 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:

NY K88101, dated August 5, 2004, is modified with respect to its legal analysis. The classification of the item described therein is unchanged. 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

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