Issue 308, July 10, 2001
The recent decision of the United States Court of International Trade in Park B. Smith, Ltd., v. United States has increased the types of articles that can be classified as "festive articles" under Heading 9505 of the Harmonized Tariff Schedule of the United States (HTSUS). A festive article is one that is closely associated with a holiday or festive occasion and which is displayed or used on or during that occasion or holiday. Typically, the "close association" is created by the physical appearance of the article. Merchandise classifiable under the festive articles provision is duty-free.

Prior to the Park B. Smith decision, the Customs Service had taken the position that functional or utilitarian items, such as cups, cookie jars, pitchers, teapots and other articles of kitchen and tableware were classifiable in Heading 9505, only if they were three-dimensional representations of an accepted symbol for a recognized holiday such as Christmas, Valentine's Day, Easter, Halloween, Thanksgiving, Independence Day or Passover. In other words, Customs refused to recognize any functional item that contained a two-dimensional representation as a festive article. For example, a plate painted with a Santa Claus figure could not be classified as a festive article. Wearing apparel, linens and similar items also were immediately excluded from classification in Heading 9505 under this definition.

The three-dimensional vs. two-dimensional distinction was struck down in Park B. Smith. In that case, the trade court recognized that two-dimensional representations of holiday themes found on dhurries, placemats, napkins and table runners rendered these items festive articles. The case also held that certain color patterns were so closely associated with certain holidays that the mere presence of those patterns or schemes was enough to render the article festive, even if the article contained no other image or holiday motif.

It is likely that the decision will be appealed to the Court of Appeals for the Federal Circuit, where part or all of it could be reversed. Nevertheless, companies that imported or are importing items that contain recognized holiday images or color patterns that could be considered festive articles under the Park B. Smith decision should consider how this decision impacts them and what steps can be taken to protect their rights to possible duty refunds in the event the decision is affirmed.

Those with questions regarding this decision are invited to contact the author below.

Our contributing writer, F.D. "Rick" Van Arnam, is a Partner at the international trade and Customs law firm of Barnes, Richardson & Colburn in New York, and can be reached via email or at (212) 725-0200.

Please note that due to the complex nature of the subject matter, Danzas AEI cannot be responsible for actions taken by the reader in reliance on the information contained herein without prior consultation with Danzas AEI.