Customs BuLLeTIN AND DECISIONS Weekly Compilation of Decisions, Rulings, Regulations, Notices, and Abstracts Concerning Customs and Related Matters of the U.S. Customs Service U.S. Court of Appeals for the Federal Circuit and U.S. Court of International Trade VOL. 35 JANUARY 10, 2001 This issue contains: U.S. Customs Service General Notices U.S. Court of International Trade Slip Op. 00-170 NOTICE The decisions, rulings, regulations, notices and abstracts which are published in the Customs BULLETIN are subject to correction for typographical or other printing errors. Users may notify the U.S. Customs Service, Office of Finance, Logistics Division, National Support Services Center, Washington, DC 20229, of any such errors in order that corrections may be made before the bound volumes are published. Please visit the U.S. Customs Web at: http://www.customs.gov For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402 U.S. Customs Service December 27, 2000 Department of the Treasury Office of the Commissioner of Customs Washington, D.C. The following documents of the United States Customs Service, Office of Regulations and Rulings, have been determined to be of sufficient interest to the public and U.S. Customs field offices to merit publication in the Customs BULLETIN. JOHN DURANT, (for Stuart P. Seidel, Assistant Commissioner, Office of Regulations and Rulings.) U.S. Customs Service General Notices PROPOSED REVOCATION OF RULING LETTER AND TREATMENT RELATING TO TARIFF CLASSIFICATION OF CERTAIN PICTURE FRAMES WITH CHRISTMAS MOTIFS AGENCY: U.S. Customs Service, Department of the Treasury. ACTION: Notice of proposed revocation of tariff classification ruling letters and the revocation of treatment relating to the classification of picture frames with Christmas motifs. SUMMARY: 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), this notice advises interested parties that Customs intends to revoke a ruling and any treatment previously accorded by Customs to substantially identical transactions concern- ing the tariff classification of picture frames with Christmas motifs under the Harmonized Tariff Schedule of the United States (HTSUS). Comments are invited on the correctness of the intended action. DATE: Comments must be received on or before February 9, 2001. ADDRESS: Written comments (preferably in triplicate) are to be ad- dressed to: U.S. Customs Service, Office of Regulation and Rulings, Attention: Commercial Rulings Division, 1300 Pennsylvania Avenue, N.W., Washington, D.C. 20229. Comments submitted may be in- spected at the same address. FOR FURTHER INFORMATION CONTACT: Andrew M. Langreich, General Classification Branch: (202) 927-2318. SUPPLEMENTARY INFORMATION: BACKGROUND On December 8, 1993, Title VI (Customs Modernization), of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057) (hereinafter “Title VI”), became effective. Title VI amended many sections of the Tariff Act of 1930, as amended, and related laws. Two new concepts that emerge from the law are U.S. CUSTOMS SERVICE “informed compliance” and “shared responsibility.” These con- cepts are premised on the idea that in order to maximize voluntary compliance with Customs laws and regulations, the trade community needs to be clearly and completely informed of its legal obligations. Accordingly, the law imposes a greater obligation on Customs to pro- vide the public with improved information concerning the trade community’s responsibilities and rights under the Customs and re- lated laws. In addition, both the trade and Customs share responsibil- ity in carrying out import requirements. For example, under section 484 of the Tariff Act of 1930, as amended (19 U.S.C. §1484), the im- porter of record is responsible for using reasonable care to enter, classify and value imported merchandise, and provide any other in- formation necessary to enable Customs to properly assess duties, col- lect accurate statistics and determine whether any other applicable legal requirement is met. 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, this notice advises interested parties that Customs intends to revoke Headquarters Ruling Letter (HQ) 962410, dated July 15, 1999, which pertains to the classification of certain picture frames with Christmas motifs. HQ 962410 is set forth as “Attachment A” to this document. Although in this notice Customs is specifically referring to one rul- ing, HQ 962410, this notice covers any ruull ings on this merchandise that may exist but have not been specifically identified. Customs has undertaken reasonable efforts to search existing databases for rul- ings and no further rulings have been found. Any party who has re- ceived an interpretive ruling or decision (i.e. , ruling letter, internal advice memorandut n or decision or protest review decision) on the merchandise subject to this notice, other than the referenced rulings (see above), should advise Customs during this notice period. Similarly, pursuant to section 625(c)(2), Tariff Act of 1930 (19 U.S.C. 1625(c)(2)), as amended by section 623 of Title VI, Customs intends to revoke any treatment previously accorded by Customs to substan- tially identical transactions. This treatment may, among other rea- sons, be the result of the importer’s reliance on a ruling issued to a third party, Customs personnel applying a ruling of a third party to importations of the same or similar merchandise, or the importer’s or Customs previous interpretation of the HTSUS. Any person in volved in substantially identical transactions should advise Customs during this notice period. An importer’s failure to advise Customs of substantially identical transactions or ofa specific ruling not identi- fied in this notice, may raise issues of reasonable care on the part of the importer or his agents for importations of merchandise subse- quent to this notice. Customs, pursuant to 19 U.S.C. 1625(c)(1), intends to revoke HQ 962410, and any other ruling not specifically identified, to reflect the proper classification of the merchandise pursuant to the analysis set forth in Proposed HQ 963282 (see “Attachment B” to this document). CUSTOMS BULLETIN AND DECISIONS, VOL. 35, NO. 2, JANUARY 10, 2001 Additionally, pursuant to 19 U.S.C. 1625(c)(2), Customs intends to re- voke any treatment previously accorded by Customs to substantially identical transactions. Before taking this action, consideration will be given to any written comments timely received. Dated: December 22, 2000. MARVIN AMERNICK, (for John Durant, Director, Commercial Rulings Division.) [Attachments] July 15, 1999 CLA-2 RR:CR:GC 962410 AML Category: Classification Tariff No. 9505.10.40 Port DIRECTOR OF CUSTOMS 1000 2nd Avenue Seattle, Washington 98104-1049 Re: Protest 3001-98-100381; Festive articles; Picture Frames with Christmas Motifs. Dear Port Director: The following is our decision regarding protest 3001-98-100381, concerning your classification of picture frames with Christmas motifs pursuant to the Har- monized Tariff Schedule of the United States (HTSUS). Samples were provided for our examination. Facts: The subject articles are very decorative picture frames with Christmas motifs. The motifs are in high bas-relief; virtually three dimensional. One frame depicts a fireplace adorned with the decorations readily associated with Christmas: a deco- rated Christmas tree with presents beneath it; garland on the mantle; and present- filled stockings hanging from the mantle. The second depicts Santa Claus holding his list in one hand and holding a stocking filled with presents in the other. The remainder of the frame depicts a decorated Christmas tree and Santa’s sack, overflowing with children’s toys and wrapped presents. Both frames are manu- factured from what appears to be a poly-resin material, and are designed to ac- commodate a 5" by 7" photograph. The protestant asserts that the weight and value of the constituent materials of the frames are as follows: polyresin — 60% of the weight and 55% of the value; glass — 20% of the weight and 10% of the value; plastic backing — 10% of the weight and 20% of the value; face paper — 1% of the weight and 1% of the value; and packaging — 9% of the weight and 14% of the value The articles were entered on August 25 and 26, 1997, and were liquidated on July 10, 1998, with classification in subheading 3924.90.20, HTSUS, as other house- hold articles of plastic, picture frames. This protest was filed on September 4, 1998. U.S. CUSTOMS SERVICE Issue: Whether the picture frames are classified in subheading 3924.90.20, HTSUS, as other household articles of plastic, picture frames; or in subheading 9505.10.40, HTSUS, as other articles for Christmas festivities and parts and accessoies thereof, of plastics? Law and Analysis: Initially we note that the protest was timely filed (i.e., within 90 days after but not before the notice of liquidation; see 19 U.S.C. $1514 (c)(3)(A ) and the matter is protestable (see 1514 U.S.C. 1514 (a)(2) and (5)) Classification under the 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 Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariffa t the international level, facilitate classification under the HTSUS by offering guidance in understanding the scope of the head- ings and GRI. The HTSUS headings under consideration are as follows: 3924 Tableware, kitchenware, other household articles and toilet articles, of plastics 3924.90 Ot(h er: 3924.90.20 Picture frames 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 9505.10.40 In Midwest of Cannon Falls, Inc. v. United States, Slip Op. 96-19 (Ct. Int’l Trade, 1996), affd in part, rev'd in part, 122 F.3d 1423, Appeal Nos. 96-1271, 96-1279 (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 new guidelines for classification of such goods in the heading. In general, merchandise is classifiable as a festive article in heading 9505, HTSUS, when the article, as a whole: Is not predominately of precious or semiprecious stones, precious metal or metal clad with precious metal; 2. Functions primarily as a decoration or functional item used in celebration of, and for entertainment on, a holiday; and 3. Is associated with or used on a particular holiday CUSTOMS BULLETIN AND DECISIONS, VOL. 35, NO. 2, JANUARY 10, 2001 Based upon a review of the articles subject to the Midwest decision, Customs is of the opinion that the Court has included within the scope of the class “festive articles” — decorative household articles which are representations of an accepted symbol for a recognized holiday, and utilitarian/functional articles that are three- dimensional representations of an accepted symbol for a recognized holiday. See Customs BuLLETIN, Volume 32, Numbers 2/3, dated January 21, 1998. In addition to the criteria listed above, the Court considered the general criteria for classification set forth in 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). Therefore, with respect to decorative and utilitarian articles re- lated to holidays and symbols not specifically recognized in Midwest or in the Customs BuLLetin dated January 21, 1998, Customs will also consider the general criteria set forth in Carborundum to determine whether a particular good belongs to the class or kind “festive articles.” Those criteria include the general physical characteristics of the article, the expectation of the ultimate purchaser, the chan- nels of trade, the environment of sale (accompanying accessories, manner of advertisement and display), the use in the same manner as merchandise which defines the class, economic practicality of so using the import, and recognition in the trade of this use. It is our position that the articles qualify as three dimensional because they are not designed or effective primarily as a flat or surface composition, but rather are specifically designed to give an illusion of depth or varying distances. See Webster’s Third New International Dictionary 2474 (1971). Although the frames can be placed on a table, counter, etc., because they are physical manifestations of the form of Santa Claus and other readily recognizable symbols of Christmas, they are sufficiently three dimensional to warrant classification within heading 9505. The picture frames are not predominately of precious or semiprecious stones, precious metal or metal clad with precious metal. The picture frames are func- tional, three-dimensional representations of articles readily associated with Christ- mas: a decorated Christmas tree with presents beneath it; garland on the mantle; and present filled stockings hanging from the mantle; and of course, Santa Claus. These articles are elaborately and overwhelmingly dedicated to the Christmas season. Because of their unique appearance and significant detail, they would likely be used as decoration only during the Christmas season. Wreaths, Christ- mas trees and Santa Claus are accepted symbol for the recognized holiday Christmas. Therefore, the picture frames qualify as festive articles of heading 9505. It should be noted that the determination made in this ruling constitutes the exception to the general rule that picture frames, whether or not having a festive motif, because of their utility and capability for year round use, will not be classi- fied in heading 9505, HTSUS, as festive articles. The two festive picture frames classified by this ruling are unique in that they are highly detailed and elaborately decorated with the Christmas motif. The molded images are highly detailed and are undeniably three dimensional; several protrude 1 1/2 to 2 1/2 inches from the flat back of the frames. This ruling is limited to these special frames. The general rules and guidelines enumerated in November, 1997, by the Customs Informed Compliance Publication entitled “Classification of Festive Articles as a result of the Midwest of Cannon Falls Court Case” remain in full force and effect. Holding: The three dimensional picture frames with Christmas motifs are classifiable under subheading 9505.10.40, HTSUS, as other articles for Christmas festivities and parts and accessoies thereof, of plastics. The protest should be GRANTED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to U.S. CUSTOMS SERVICE mailing the decision. Sixty days from the date of the decision, the Office of Regu- lations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.ustreas.gov, by means of the Freedom of Information Act, and other methods of public distribution. Pau. G. HEDFIELD, (for John Durant, Director, Commercial Rulings Division.) [ATTACHMENT CLA-2 RR:CR:GC 963282 AML Category: Classification Tariff No. 3924.90.20 Ms. JENNIFER ANDERSON EXPEDITORS CONSULTING SERVICES, LLC 999 Third Avenue Suite 4401 Seattle, WA 98104 Re: Reconsideration of HQ 962410; picture frames with Christmas motifs. DEAR Ms. ANDERSON: This is in reference to Headquarters Ruling Letter (HQ) 962410, issued to the Port Director of Customs, Seattle, Washington, in reply to protest 3001-98-100381, initiated by you on behalf of Costco Wholesale, which concerned the classification of picture frames with Christmas motifs under the Harmonized Tariff Schedule of the United States (HTSUS). We have reconsidered HQ 962410 and now believe that the classification set forth is incorrect. This letter sets forth the correct classification. However, because HQ 962410 was a decision on Application for further review of Protest 3001-98-100381, any reliquidation of the entry in that protest will be unaffected by this decision. Lac ts: ‘he articles at issue were described in HQ 962410 as follows: The subject articles are very decorative picture frames with Christmas mo- tifs. The motifs are in high bas-relief; virtually three-dimensional. One frame depicts a fireplace adorned with the decorations readily associated with Christ- mas: a decorated Christmas tree with presents beneath it; garland on the mantle; and present-filled stockings hanging from the mantle. The second depicts Santa Claus holding his list in one hand and holding a stocking filled with presents in the other. The remainder of the frame depicts a decorated Christmas tree and Santa’s sack, overflowing with children’s toys and wrapped presents. Both frames are manufactured from what appears to be a poly- resin material, and are designed to accommodate a 5" by 7" photograph. The protestant asserts that the weight and value of the constituent materials of the frames are as follows: polyresin — 60% of the weight and 55% of the value; glass — 20% of the weight and 10% of the value; plastic backing — 10% of the weight and 20% of the value; face paper — 1% of the weight and 1% of the value; and packaging — 9% of the weight and 14% of the value. CUSTOMS BULLETIN AND DECISIONS, VOL. 35, NO. 2, JANUARY 10, 2001 In HQ 962410, Customs classified the picture frames under subheading 9505.10.40, HTSUS, which provides for articles for Christmas festivities and parts and accessories thereof, other, of plastics. Issue: Whether the picture frames are classified in subheading 3924.90.20, HTSUS, as other household articles of plastic, picture frames; or in subheading 9505.10.40, HTSUS, as other articles for Christmas festivities and parts and accessories thereof, of plastics? Law and Analysis: The classification of merchandise under the HTSUS is governed by the General Rules of Interpretation (GRIs). GRI 1, HTSUS, provides, in part, that “for legal purposes, classification shall be determined according to terms of the headings and any relative section or chapter notes|.]” The HTSUS headings and subheadings under consideration are as follows: 3924 Tableware, kitchenware, other household articles and toilet articles, of plastics: 3924.90 Other: 3924.90.20 Picture frames. 9505 Festive, carnival or other entertainment articles, including magic tricks and practical joke articles; parts and accessories thereof: Articles for Christmas festivities and parts and accessories thereof Other: 9505.10.40 Of plastics The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the inter- national level. While not legally binding on the contracting parties, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of mer- chandise under the System. Customs believes the ENs should always be con- sulted. See T.D. 89-80. 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989). Note 1(k) to Chapter 95 excludes from classification in Chapter 95, among other things, “parts of general use, as defined in Note 2 to Section XV, of base metal (Section XV) or similar goods of plastics (Chapter 39).” Note 2 to Section XV provides, in pertinent part, that “part of general use” include “(c) [a]rticles of headings Nos. 83.01, 83.02, 83.08, 83.10 and frames and mirrors, of base metal, of heading No. 83.06.” Heading 830€ provides for, among other things, picture frames of base metal. See also the ENs to heading 8306. Given the fact that the subject picture frames are composed primarily of polyresin, they are, for classification purposes consid- ered to be composed of plastic (See Chapter 39: polyresin is a plastic under the HTSUS). Therefore, the picture frames with Christmas motifs are plastic parts of general use and classification as such under heading 9505 is precluded. Plastic picture frames are provided for eo nomine under subheading 3924.90.20,