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HQ 953605


December 23, 1993

CLA-2 CO:R:C:F 953605 GGD

CATEGORY: CLASSIFICATION

TARIFF NO.: 9503.30.40

Ms. Laurie Everill
J.C. Penney Purchasing Corporation
Post Office Box 10001
Dallas, Texas 75301-0001

RE: "Bag of Blocks;" Composite Article with Components from China and Israel

Dear Ms. Everill:

This letter is in response to your inquiry of February 8, 1993, concerning the classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), of an article identified as a "Bag of Blocks." The bag will be imported from China and the blocks from Israel. A sample article was submitted with your inquiry.

FACTS:

The sample submitted to this office, identified by foreign supplier's item no. 51190, consists of a textile drawstring bag containing 120 variously shaped blocks of injected, molded plastic. The bag and drawstring are comprised of 100 percent cotton woven materials. When flat, the bag measures approximately 10-1/2 inches in width by 13-1/2 inches in height. The bag will be manufactured in China, then purchased and imported into Israel by the Israeli block manufacturer, who will screen print the bag with the words "BAG OF BLOCKS." The Israeli manufacturer will insert the blocks into the bag and package the article for retail sale in the U.S.

ISSUES:

1) Whether the article should be classified in heading 9503, HTSUSA, the provision for other toys; or in heading 6307, HTSUSA, as an other made up article of textile.

2) Whether the article is entitled to duty-free treatment under the United States-Israel Free Trade Area Implementation Act of 1985.

LAW AND ANALYSIS:

Classification under the HTSUSA is made in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the harmonized system 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 Explanatory Notes (ENs) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUSA by offering guidance in understanding the scope of the headings and GRIs.

Heading 9503, HTSUSA, applies to "other toys," i.e., all toys not specifically provided for in the other headings of chapter 95. Although the term "toy" is not defined in the tariff, the EN to chapter 95 indicates that a toy is an article designed for the amusement of children or adults. The ENs to heading 9503 indicate that, among other toys, the heading covers "[c]onstructional toys (construction sets, building blocks, etc.)."

In this case, the article consists of two components, i.e., plastic blocks and a textile bag. Each component is classifiable in a different heading; the blocks in heading 9503, HTSUSA, and the bag in heading 6307, HTSUSA. Since the goods cannot be classified by reference to GRI 1, we look to GRI 2(b), which in pertinent part states that:

[t]he classification of goods consisting of more than one material or substance shall be according to the principles of rule 3.

GRI 3(a) directs that the headings are regarded as equally specific when each heading refers to only part of the materials contained in mixed or composite goods. Therefore, to determine under which provision the article will be classified, we look to GRI 3(b), which states that:

[m]ixtures, composite goods consisting of different materials or made up of different components...which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.

Explanatory Note VIII to GRI 3(b) provides the following guidance concerning the essential character determination:

The factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.

Mindful that the textile bag functions merely to transport and store the blocks (the latter clearly also the component of greater value), we find that the plastic blocks provide the essential character of the whole article. The "Bag of Blocks" is properly classified in subheading 9503.30.40, HTSUSA, the provision for "Other toys...and accessories thereof: Other construction sets and constructional toys, and parts and accessories thereof: Toy building blocks, bricks and shapes." In accordance with Headquarters Ruling Letter (HRL) 086297, issued January 26, 1990, we note that textile articles classified in Chapter 95, HTSUSA, by application of GRI 3(b), are not subject to separate visa requirements or quota restraint levels.

With respect to the eligibility of the goods for duty-free treatment, we note that pursuant to General Note 3(c)(vi)(A), HTSUSA, products of Israel imported into the customs territory of the U.S. and entered under a provision for which a rate of duty appears in the "Special" subcolumn followed by the symbol "IL" in parentheses, are eligible for the tariff treatment set forth in the subcolumn, in accordance with section 4(a) of the United States-Israel Free Trade Area Implementation Act of 1985 (99

Stat. 82). However, General Note 3(c)(vii)(B), HTSUSA, states that imported goods are eligible for treatment as "products of Israel" only if--

(1) each article is the growth, product or manufacture of Israel or is a new or different article of commerce that has been grown, produced or manufactured in Israel;

(2) each article is imported directly from Israel into the customs territory of the United States; and

(I) the cost or value of the materials produced in Israel plus

(II) the direct costs of processing operations performed in Israel, is not less than 35 percent of the appraised value of each article at the time it is entered.

In light of the fact that the article's textile bag component is a product of China, and that this component is not substantially transformed into a different item by its being screen printed in Israel, it is our determination that the composite article is not eligible for duty-free treatment.

HOLDING:

Supplier's item no. 51190, identified as a "Bag of Blocks," is properly classified in subheading 9503.30.40, HTSUSA, the provision for "Other toys...and accessories thereof: Other construction sets and constructional toys, and parts and accessories thereof: Toy building blocks, bricks and shapes." The general column one rate of duty applicable to this merchandise is 6 percent ad valorem.

Because the entire imported article is not a product of Israel, in accordance with the statutory requirements of the United States-Israel Free Trade Area Implementation Act of 1985, neither the article nor its components is entitled to duty-free treatment.

The issue as to the country of origin/marking of this article has been referred to the Value and Marking Branch. A response will be provided to you under separate cover.

Sincerely,

John Durant, Director

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