Application for Further Review of Protest No. 1001-95-103758;Samples of cosmetic products; Italian Drug Importing Co. v. UnitedStates, 46 Cust. Ct. 243, C.D. 2263 (1961); United States v. London Records, Inc.,402 F.2d 1009, 56 C.C.P.A. 14 (1968); HRL 556174

HQ 559318 January 17, 1996 CLA-2 RR:TC:SM 559318 DEC CATEGORY: CLASSIFICATION TARIFF NO.: 9811.00.60 Area Director U.S. Customs J.F.K. Airport, Building 77 Jamaica, New York 11430 RE: Application for Further Review of Protest No. 1001-95-103758; Samples of cosmetic products; Italian Drug Importing Co. v. United States, 46 Cust. Ct. 243, C.D. 2263 (1961); United States v. London Records, Inc., 402 F.2d 1009, 56 C.C.P.A. 14 (1968); HRL 556174 Dear Sir: This is in reference to your memorandum dated July 10, 1995, forwarding the above-referenced protest and application for further review filed by Siegel, Mandell & Davidson, P.C., on behalf of Christian Dior Perfumes, Incorporated (Christian Dior), contesting the denial of the duty exemption under subheading 9811.00.60, Harmonized Tariff Schedule of the United States (HTSUS), to certain perfume products that the importer claims to be samples. FACTS: Christian Dior imported various items described as "Eye Make-Up Diorcil Sales Girl's Gift," "Capture Contour De L'oeil Gift," "Capture Sales Girl's Gift," "Lipstick Sales Girl's Gift," "5 Colour Sales Girl's Gift," and "Powder Blush Sales Girl's Gift" and entered them under subheading 9811.00.60, HTSUS. Customs disagreed with this classification and reclassified these articles in heading 3304, HTSUS. Counsel for Christian Dior claims that each of the above articles are either used for training seminars or distributed free of charge to Christian Dior sales consultants at Christian Dior cosmetic counters to acquaint and familiarize these individuals with the Christian Dior products. This is said to be necessary so that the sales consultants are better equipped to discuss, present, demonstrate, and recommend the product to potential customers. Counsel also states that the sales representatives will wear the fragrance or cosmetic to stimulate consumer interest in the particular items. The articles that are the subject of this protest are not promotional items offered for sale at a discount. They are non-commercial items identical to the commercially available retail product, but they are not authorized for sale at any level in the chain of distribution. Furthermore, each article is marked "NOT FOR RESALE." The commercial invoice accompanying the shipment subject to this protest refers to these products as "salesgirls gifts for training." ISSUE: Whether the cosmetic products that are distributed in the manner described above qualify as "samples" which are entitled to duty-free treatment under subheading 9811.00.60, HTSUS. LAW AND ANALYSIS: Subheading 9811.00.60, HTSUS, provides for the duty-free treatment of any sample either valued at less than $1 each or marked, torn, perforated, or otherwise treated so that it is unsuitable for use otherwise than as a sample to be used in the United States only for soliciting orders for products of foreign countries. The controlling factor is whether the importer uses the samples for the purpose of soliciting purchase orders for foreign merchandise and the creation of demand for future orders. If the items at issue are valued at more than $1 each, they may not be entered free of duty under this tariff provision unless they are marked as samples or treated in some way to render them unsuitable for commercial sale or any use other than as samples for obtaining orders for similar articles. The controlling factor is whether the importer uses the samples for the purpose of soliciting purchase orders for foreign merchandise and the creation of demand for future orders. In Italian Drug Importing Co. v. United States, 46 Cust. Ct. 243, C.D. 2263 (1961), the court allowed the free entry of vitamins marked "Sample - not for sale" which were distributed to physicians without charge for their patients. In Headquarters Ruling Letter (HRL) 556174, dated December 4, 1991, Customs determined that tablets imported in vials or blister packages marked "Sample - not for sale" for the purpose of distributing them to physicians in order to create a market in the United States, qualified as samples under subheading 9811.00.60, HTSUS. In United States v. London Records, Inc., 402 F.2d 1009, 56 C.C.P.A. 14 (1968), sample records with a label stating "Made in England - Not For Sale" were distributed throughout the United States to record reviewers and radio stations free of charge to generate demand for the music. The court held that these articles were entitled to duty-free entry as sample merchandise. The goods in this case were marked "Sample, not for sale." "The court [in the Italian Drugs case] observed that notwithstanding the fact that a temporary benefit was derived by the patients to whom the vitamins were distributed free of charge, the importations were...based upon the object of securing future orders...." London Records, 402 F.2d at 1011, 56 C.C.P.A. at 17. In addition, the court stated that The radio stations and disc jockeys were no more than a link in the "chain of solicitation." We view their role, as did the court below, "as incidental and wholly subordinate to what plainly appears as the sole motivating purposes behind the importation and distribution of the samples - creation of demand for future orders." Id., 56 C.C.P.A. at 18. According to counsel for the importer, the articles are used either for training seminars or distributed free of charge to Christian Dior sales consultants at Christian Dior cosmetic counters to acquaint and familiarize these individuals with the Christian Dior products. Counsel states that the distribution of the various products described above to the sales consultants who interact with customers in the retail marketplace is for the sole purpose of creating future demand for the cosmetic products in the United States. The consumption of the subject cosmetics in the context of training seminars or by sales consultants personally for the stated purpose of familiarizing the consultants with these products is clearly related to the training aspect of the personnel who sell the cosmetic items. Counsel states that the training and personal use with particular cosmetics improves the sales consultants' perspective when discussing, presenting, demonstrating, and recommending the product to potential customers. While Customs does not dispute the assumption that a well-trained salesperson is an asset in promoting sales, it is our position that the underlying training aspect of the use of these products presents too tenuous a connection to the statutory requirement that they be used "only for soliciting orders for products of foreign countries." Therefore, we find that the cosmetic products do not qualify for duty-free treatment as samples under subheading 9811.00.60, HTSUS. HOLDING: The sales consultants' cosmetics that are imported for training seminars and personal use by sales consultants, as described above, do not qualify as samples pursuant to subheading 9811.00.60, HTSUS. Therefore, the protest should be denied. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to the mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels. Sincerely, John Durant Director Tariff Classification Appeals Division