Request for Binding Ruling for plastic coin bank

HQ H090039 April 19, 2010 CLA-2 OT:RR:CTF:TCM H090039 CkG CATEGORY: Classification TARIFF NO: 3924.90.56 Gita Yao Milgram Freight Services, Ltd. 407 rue McGill, suite 500Montreal, QuebecCanada H2Y 2G7 Re: Request for Binding Ruling for plastic coin bank Dear Ms. Yao: This is in response to your request of November 24, 2009, to the National Commodity Specialist Division, on behalf of your client, Ekomini, Inc., concerning the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of a plastic coin bank. Your letter was forwarded to this office for reply. FACTS: The Ekomini bank consists of a plastic moneybox in the shape of a treasure chest with a built-in coin reader and a USB cable. The product literature indicates that the user inserts coins into the plastic moneybox. The battery operated coin reader keeps the amount of coins inserted in memory. The amount is not displayed on the device itself, but the user can keep track of it by connecting to a home computer with the USB cable and accessing www.ekominiville.com, which also contains games and interactive storytelling designed to teach a child basic money management skills. The user can retrieve the money inserted by removing the coin reader. The product is recommended for children ages 6-12. ISSUE: Whether the ekomini money bank is classifiable as a toy of heading 9503, HTSUS, or as a household article of plastic of heading 3924, HTSUS. LAW AND ANALYSIS: Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to the remaining GRIs 2 through 6. The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). The HTSUS provisions under consideration are as follows: 3924: Tableware, kitchenware, other household articles and hygienic or toilet articles, of plastics: 3924.90: Other: 3924.90.56: Other * * * * * 9503: Tricycles, scooters, pedal cars and similar wheeled toys; dolls’ carriages; dolls, other toys; reduced-scale (“scale”) models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof….. 9503.00.00: Other…………. * * * * * Chapter 39, Note 2(y) states: This chapter does not cover… Articles of chapter 95 (for example, toys, games, sports equipment); EN 39.24 provides, in pertinent part, as follows: This heading covers the following articles of plastics: (C) Other household articles such as ash trays, hot water bottles, matchbox holders, dustbins, buckets, watering cans, food storage containers, curtains, drapes, table covers and fitted furniture dustcovers (slipovers). EN 95.03 states, in pertinent part: D)  Other toys. This group covers toys intended essentially for the amusement of persons (children or adults)….This group includes: Educational toys (e.g., toy chemistry, printing, sewing and knitting sets). Toy money boxes; babies; rattles, jack-in-the-boxes; toy theatres with or without figures, etc. Certain toys (e.g., electric irons, sewing machines, musical instruments, etc.) may be capable of a limited use; but they are generally distinguishable by their size and limited capacity from real sewing machines, etc. * * * * * Classification within Chapter 39 is subject to Chapter 39, Legal Note 2(y), which excludes from Chapter 39 goods that are classifiable in Chapter 95, HTSUS. Therefore, if the subject article is described in Chapter 95, it is precluded from classification in any of the provisions of Chapters 39, even if it is described therein. We must therefore first address whether the subject article is described in heading 9503, HTSUS. Although the term “toy” is not defined in the HTSUS, EN 95.03 provides that heading 9503, HTSUS, covers toys intended essentially for the amusement of persons. U. S. v. Topps Chewing Gum, 58 CCPA 157, C.A.D. 1022 (1971) (hereafter Topps), is illustrative in determining whether an article is intended for the amusement of the user. Topps held that an article may be considered a toy if it provides the same kind of amusement as a plaything. In Topps, various decorative buttons with humorous quotes which created evident and inherent amusement were classified as toys of heading 9503. Where merchandise might have another purpose in addition to providing amusement, the primary purpose of the item must be its amusement value for it to be classified as a toy. In Ideal Toy Corp. v. United States, 78 Cust. Ct. 28, 33 (1977), the Customs Court held that “when amusement and utility become locked in controversy, the question becomes one of determining whether the amusement is incidental to the utilitarian purpose, or the utility purpose is incidental to the amusement.” Heading 9503, HTSUS, is a "principal use" provision within the meaning of Additional U.S. Rule of Interpretation (AUSRI) 1(a), HTSUS. Minnetonka Brands v. United States, 110 F. Supp. 2d 1020, 1026 (CIT 2000). In determining whether the principal use of a product is for amusement, and thereby classified as a toy, Customs considers a variety of factors, including: (1) the general physical characteristics of the merchandise; (2) the expectation of the ultimate purchasers; (3) the channels, class or kind of trade in which the merchandise moves; (4) the environment of the sale (i.e., accompanying accessories and the manner in which the merchandise is advertised and displayed); (5) usage, if any, in the same manner as merchandise which defines the class. United States v. Carborundum Co., 63 C.C.P.A. 98, 102, 536 F.2d 373, 377 (1976). Not all of these factors will necessarily be relevant in every situation. In the instant case, the factors for which information is available are primarily the physical characteristics and environment of sale. While EN 95.03(D)(xxii) provides specifically for toy money boxes, any toy classifiable in heading 9503, HTSUS, particularly one with a dual purpose of utility and amusement, must meet the criteria discussed above. For example, in Nadel & Sons Toy Corp. v. United States, 4 CIT 20 (1982), the Court of International Trade discussed the application of these precedents to a plastic money bank in the figure of Uncle Sam. The figure was standing on a decorated platform which served as a receptacle of coins. One of Uncle Sam’s arms was extended and its hand was designed to accommodate a coin. When a button was pressed, the arm dropped the coin into a satchel that opened. The Court found that the purpose of the Uncle Sam bank was to save and store coins. The Court stated that “the coins are received into the article in a manner that amuses is incidental and not controlling,” and that there was little “amusement value” in such a pastime, which would be soon abandoned. In the instant case, the physical features of the instant bank are not characteristic of a toy. The bank offers no manipulative play value, and its appearance is not inherently amusing. The bank is intended to resemble a treasure chest, but even if a treasure chest were deemed inherently amusing for the purpose of heading 9503, HTSUS, the resemblance in this case is minimal. The marketing, advertisement and sale of the product emphasize both the educational and amusing aspects of the product; however, most, if not all, of the amusement a child might derive from the package offered by Ekomini would stem from the online games rather than the coin bank itself. Alternatively, EN 95.03 (D)(xvi) also provides for “educational toys.” The ekomini money bank may be considered an educational article, in that it is intended to teach children the value of saving and other money-management principles. Classification of articles as educational toys is limited to goods of the same class or kind as the examples listed in EN 95.03, HTSUS. EN 95.03 refers to toy chemistry, printing, sewing and knitting sets as examples of educational toys. As semi-functional representations of the actual products, the “educational” toys listed in EN 95.03 are capable of a “limited use,” but are generally distinguishable by their size and limited capacity from real sewing machines, etc. They are designed to allow the user to mimic or even undertake the basic activities of actual chemistry, printing, sewing or knitting sets. They take advantage of a child’s natural curiosity and desire to role-play at being an adult. The actual learning of principles of chemistry or development of sewing skills is thus secondary to the entertainment value of role-playing and exploding volcanoes. Hence, to be considered a toy, an amusing educational article must be a limited use representation that provides for role-playing. In the instant case, the money bank is not a semi-functional representation of an actual product related to money management, even though it allows the user to mimic adult activities related to money management on the website. Rather, the user is actually saving real money, as one would with any coin bank. Furthermore, an educational toy classifiable in heading 9503, HTSUS, must still be inherently amusing. As noted by the CIT in Nadel & Sons, there is little inherent amusement value in depositing coins in a box. The ekomini money bank is not a toy classifiable in heading 9503, HTSUS. It is thus classifiable according to its constituent material as an article of plastic of Chapter 39, HTSUS. Because it is designed for use in the home, it is classified as a household article of plastic of heading 3924, HTSUS. HOLDING: By application of GRI 1, the ekomini money bank is classified in heading 3924, HTSUS, and is specifically provided for in subheading 3924.90.56, HTSUS, which provides for “Tableware, kitchenware, other household articles and hygienic or toilet articles, of plastics: Other: Other.” The 2010 column one, general rate of duty is 3.4% ad valorem. 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 World Wide Web at http://www.usitc.gov/tata/hts/. A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction. Sincerely, Gail A. Hamill, Chief Tariff Classification and Marking Branch