The ruling, apparently drafted by Ebinezer Grinch von Scroogeheimer of the Regulations and Rulings Unit, considered the tariff classification of a complete, adult sized, and apparently well-made Santa costume known as the Premier Plush Nine Piece Santa Suit. Look at this picture and tell me whether it is a festive article closely associated with a holiday:
The problem is that Customs and Border Protection and importers do not get to rely on gut reactions when classifying merchandise. It is times like these that we shake our fist in the air and curse the damned General Rules of Interpretation.
The costume in question consisted of the top, pants, hat, belt, gloves, shoe covers, beard, wig, and a toy sack all packaged together. The top and pants were a synthetic blend, with sewn-in care labels stating the the garments are to be Dry cleaned.The top was lined and the top and pants were both trimmed with faux fur. It is all packaged together for retail sale.
There are two big issues here that lead to the ultimate classification of this merchandise. First, is the costume (or any component thereof) a festive article of Chapter 95? Second, is it a retail set under GRI 3, leading to a single tariff classification? A lump of coal goes in your stocking if you think this has a happy ending. [Did I do that right? That's outside my cultural experience.]
The thing to remember is that the several of the potentially applicable chapters, including Chapters 39, 42, and 67 include legally binding notes excluding articles of Chapter 95. Chapter 95, in turn, covers "Festive, carnival or other entertainment articles." Consequently, if the costumes are classifiable in Chapter 95, they would be excluded from the other chapters and entitled to duty-free entry into the United States, hence the ruling request.
This is where the rules start to get in the way of the obvious result. Note 1(t) to Section XI, which covers textiles and textile articles, excludes goods of Chapter 95 from that section. That is good for the importer. However, Note 1(e) to Chapter 95 excludes "fancy dress, of textiles, of chapter 61 or 62" from Chapter 95. Thus, if the costume is fancy dress, then it cannot be in Chapter 95 and if it is not in Chapter 95, then it is not excluded from Section XI.
According to prior decisions of the Court of Appeals for the Federal Circuit, "fancy dress, of textiles, of chapter 61 or 62" includes costumes that are also "wearing apparel." The difference between costumes that are wearing apparel and those that are not is based on the quality of finishing including the presence of zippers, insert panels, finished edges, and whether the costume is "flimsy." Basically this test is intended to differentiate the one-time wearable, cheap Halloween-style costume from substantial garments that might be worn repeatedly to masquerade balls in Jane Austin novels. Customs and Border Protection distills this into a test based on styling, construction, finishing touches, and embellishments.
In this case, Customs found that the top and pants had tightly sewn seams and that the top included a zipper concealed under the faux fur. All of the edges were finished. For this and other reasons, Customs found the garments to be non-flimsy. So, that makes the costume wearing apparel.
Next comes Note 3(a) to Chapter 61 which states that the components of a man's suit must be of the same fabric construction, color, and composition. The pants lack faux fur trim. As a result, Customs and Border Protection found the pants and top did not constitute a "suit" and should be classified as separates in 6105 (top) and 6103 (pants).
To make matters worse, Customs noted that Note 14 to Section XI states that textile garments of different headings are to be classified separately even if put up in a retail set. That is another reason the costume cannot be classified as a whole. Consequently, Customs moved on to individually classify the gloves, sack, wig, and beard. Of those, only the wig and beard made the cut as festive articles of Chapter 95. For some reason, Customs deferred ruling on the Santa hat, belt, and shoe covers until a later ruling.
The moral of this Christmas story is that tariff classification requires a detailed application of the legal text and that a quick gut reaction will often lead to no good. Or, that Customs' heart is two sizes too small.