Ruling of the Week 2015.15: The Festive Penguin

Several alert readers have pointed me in the direction of the May 6, 2015 Customs Bulletin & Decisions in which U.S. Customs and Border Protection proposes to revoke NY N035321 (Aug. 18, 2008). In that ruling, Customs considered the classification of a 14-inch plastic penguin made of red, orange, green and clear beads. To make the item even more impressive, it is equipped with light bulbs that run through the frame and it wears a "Santa hat" made of lights. Stop there for a moment. As with my lighted tie, I have been unable to find a picture of this particular item. Note to anonymous law clerk who found me a representative tie: treat this as a challenge. Find me a picture, please.

Customs originally classified this item in Heading 3926 as an other article of plastic. The importer asked for reconsideration of that decision and asserted that it is properly classified as a festive article in heading 9505. As you probably know, the scope of heading 9505 has been the subject of a lot of litigation. This is primarily because goods classified in that heading are duty free and also because most things can be festive if seen in the right context. My kid's dirty soccer socks can be strung from the mantel to celebrate World Cup season.

In a tariff sense, festive articles includes items traditionally used at Christmas (e.g., artificial Christmas trees, nativity scenes, Christmas nutcrackers, and yule logs). More generally, the item must be closely associated with a festive occasion and must be used or displayed principally during that occasion. Seeing it on display at other times should be "aberrant."

"Other articles of plastic," on the other hand, is a basket provision. That means goods will not be classified in 3926 if they are specified or included elsewhere. So, if 9505 fits, 3926 fails.

So what about our penguin? Unlike a reindeer, there is no recognizable connection between a penguin and Christmas. But, in this case, the penguin has donned a "Santa hat." The hat is an article traditionally associated with Christmas and the festive Christmas season. So much so that CBP believes that the presence of the hat makes the display of this penguin aberrant outside of the Christmas season. This penguin is not a general decoration, it is a Christmas decoration. As such, it should be classified in 9505.10.25.

That's a win for the importer, and that is good enough for me.

I continue to believe that the test for festive articles related to Christmas, Easter, and other Christian holidays is too subjective. I have previously proposed a more scientific test. I still think it makes sense.

Also, this is a great opportunity for tariff engineering. I propose adding a Santa hat to basically anything that is dutiable. That doesn't seem like an artifice or disguise, does it?

Comments

Post a Comment

Popular posts from this blog

Ruling of the Week 2015.8: Old Jersey and Pitcairn Island

Image
For today's ROTW, I set out looking for a ruling dealing with some far off and preferably warm location. Turns out that, with the exception of coastwise transit issues, there are no Customs and Border Protection rulings involving Pitcairn Island or any of several Pacific Ocean microstates including Tuvalu , Niue , and Kiribati . Pitcairn Island What I did find is an interesting question about the country of origin marking for products of the Bailiwick of Jersey Island, Channel Islands. The ruling is HQ 561938 (Mar. 18, 2002). For those of you who may not know, Jersey is an island off the coast of Normandy, France. It is an independent international actor and not part of the U.K. although the U.K. is responsible for its defense and external relations. Also, the Queen is the Head of State in her capacity as "the Crown in Right of Jersey." It is, according to the U.S. Department of State, a " Crown Dependency " along with the Isle of Man and the Bailiwick o...
Read more

CAFC Decision in Double Invoicing Case

The Federal Circuit has issued a decision on the merits in United States v. Inn Foods, Inc.  There had been a previous decision on jurisdiction, which was followed by a trial at the Court of International Trade and then this appeal on the substance. The initial issue is whether Inn Foods' invoicing practice amounts to fraud.  Inn Foods had been receiving an invoice from growers in Mexico that had a relatively low sales prices on it.  Subsequent to entry, Inn Foods created a second invoice at something more similar to market value, retaining the original invoice number, and paid at that higher amount.   Superficially, this looks like a standard-issue double-invoicing scheme.  But, in the age of reconciliation, is it really more like a provisional pricing mechanism?  It might have been possible to make that argument had Inn Foods adjusted its entries accordingly.  It didn't and the loss of revenue was approximately $624,000.  Based on testimony and evidence indicating both knowl...
Read more

Ninestar and UFLPA Exhaustion

Image
Exhaustion is a key doctrine in administrative law. When applicable, it requires that a party unhappy with an agency’s determination complete the administrative appeal process before turning to the courts for judicial review. Requiring exhaustion typically promotes judicial efficiency by ensuring that disputes are resolved at the agency and, if they are not, that there is a complete record of the agency process. Exhaustion also ensures that the judiciary respects the executive agencies and their expertise.  There are, on the other hand, times when the courts will find that exhaustion is not necessary or appropriate. Such is the case in  Ninestar Corporation et al. v. United States  et al., a decision of the U.S. Court of International Trade.  Ninestar is also interesting because it is one of the first cases in the CIT involving the Uyghur Forced Labor Prevention Act, known as UFLPA. In my hiatus from active blogging, I missed the rise of UFLPA as a major compliance t...
Read more