Ruling of the Week: Note Cards

Frankly, I am not the most thoughtful person in the world. I know that. I try my best to make up for it. Rarely does that effort include a greeting card. When forced by circumstances, I stand at the local Walgreen's card racks staring into an abyss of cards that are never quite right. Finding something in the sweet spot between excessively sappy and an infantile effort at humor is incredibly frustrating. Often, I end up with a call, email or the dreaded Facebook message. So, it surprises me to learn that people still buy boxes of pre-printed cards as ready-at-hand supplies should the need for a card materialize. Apparently, this happens.

This all comes to mind in the context of HQ H305186 (May 8, 2020) in which Customs and Border Protection classified a set of 60 note cards for Michaels Stores. 

The actual cards in the set fell into distinct categories, which will be important for classification purposes. Three styles of cards were printed with an exterior design. Three styles had text on the outside conveying the message "Thank You," "Cheers to You," or "Yay." All of the cards were blank on the inside.

There are two relevant tariff headings:

4909

Printed or illustrated postcards; printed cards bearing personal greetings, messages or announcements, whether or not illustrated, with or without envelopes or trimmings:

4911

Other printed matter, including printed pictures and photographs:

The difference between merchandise covered by these headings is pretty clear. If the cards bear a personal greeting, message, or announcement, they are classified in 4909. If not, they go in 4911.

The problem is that the set of cards is a mixture of cards with text and those that only have graphical elements. What to do?

As always, the answer lies in the General Rules of Interpretation. In this case, GRI 1 does not resolve the question because the two heading are equally applicable to the merchandise. That means we look to GRI 3(b) to classify the set on the basis of essential character. According to the Explanatory Notes, essential character is determined on the basis of the nature of the components including bulk, weight, value, and the role of the component in relation to the use of the good. Explanatory Notes, GRI 3(b) VII.

Here, the note cards are in equal quantities of textual and graphical. The values are also comparable. Thus, CBP determined that there is no component that imparts the essential character.

Consequently, CBP applied GRI 3(c) to classify the set in the HTSUS item that occurs last in numerical order (among those that merit equal consideration). Here, that is 4911 and the correct classification is 4911.91.40. 

Typically, both possible classifications are duty free. But, in today's world, there is a difference in the 301 duties. That probably explains the ruling request. This might create an opportunity for the company to manage its supply chain to engineer around the higher 301 duties by shipping the cards printed with text separately and packing the sets in the U.S. Or, it might be sufficient to change the number or value of each style of cards to establish the desired essential character. That, of course, depends on whether the savings justify the added costs. Still, it is something to consider.


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