CBP has issued a directive that offers guidance on the tariff classification of festive articles in accordance with a court decision in a case involving the classification of certain knitted cardigans and blouses and woven ladies’ shirts. The decision by the U.S. Court of Appeals for the Federal District in Michael Simon Design Inc. v. United States reaffirmed the landmark rulings by the Court of International Trade in Midwest of Cannon Falls and Park B. Smith that utilitarian goods may be classified under duty-free provisions of the Harmonised Tariff Schedule of the U.S. as festive articles. In this particular case, the court found that certain apparel articles decorated with festive symbols or motifs were properly classified as festive articles under HS Chapter 95.
CBP notes that, effective 3 February 2007, the HTSUS Chapter 95 notes were amended pursuant to Proclamation 8097 to exclude certain utilitarian articles, including apparel, from classification in that chapter. Because Chapter 95 Note 1(v) excludes certain utilitarian articles and Michael Simon grants these articles duty-free treatment as articles of heading 9505, CBP has requested:
◇◆that the USITC initiate a Section 1205 investigation on the impact that the adoption of the new Chapter 95 note has had on imports of utilitarian or functional articles with festive designs and/or motifs; and◇◆that the USITC recommend to the USTR the adoption of new duty-free provisions in Chapter 98 for certain utilitarian articles with festive designs and/or motifs.
In addition, CBP has issued the following guidance on the classification of festive articles, which supersedes any previous guidance documents issued by CBP on this matter.
◇◆Except for certain cooking utensils, utilitarian or functional articles with festive designs and/or motifs entered prior to 3 February 2007 will be classified and liquidated in Chapter 95 (heading 9505) as festive articles if the articles are (1) closely associated with a festive occasion and (2) used or displayed principally during that festive occasion such that use or display at any other time would be aberrant.
◇◆Purely decorative articles not otherwise excluded from Chapter 95 or heading 9505 will be classified and liquidated as festive articles in heading 9505 if the articles are (1) closely associated with a festive occasion and (2) used or displayed principally during that festive occasion such that use or display at any other time would be aberrant.
CBP also advises that this guidance does not include costumes, which means that the classification of costumes will be continued to be controlled by the CAFC decision in Rubie’s Costume Company v. United States.
