us-cbp-cross-rulings-hq-081373•HQ 081373: Tariff classification of a women's wallet, two wallet/credit card holders, and two brass key rings manufactured in Korea.
HQ 081373: Tariff classification of a women's wallet, two wallet/credit card holders, and two brass key rings manufactured in Korea.
us-cbp-cross-rulings-hq-081373HQ 081373: Tariff classification of a women's wallet, two wallet/credit card holders, and two brass key rings manufactured in Korea.Guidance
Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.
HQ 081373
October 17, 1988
CLA-2 CO:R:C:G 081373 DC
CATEGORY: Classification
TARIFF NO.: 4202.32.2000; 4202.32.4000; 7419.19.5050
Stephen S. Weiser, Esq.
Siegel, Mandell & Davidson
Counsellors At Law
One Whitehall Street
New York, New York 10004
RE: Tariff classification of a women's wallet, two wallet/credit
card holders, and two brass key rings manufactured in Korea.
Dear Mr. Weiser:
In a letter dated November 18, 1987, on behalf of Liz
Claiborne Accessories, Inc., you inquired as to the tariff
classification under the proposed Harmonized Tariff Schedule of
the United States Annotated (HTSUSA), of a women's wallet,
wallet/credit card holders, and two brass key rings.
FACTS:
The sample designated as style 81631 is a women's wallet
measuring approximately 7-3/4 inches by 4 inches by 3/4 inch.
The article, which has a zippered closure and several inner
compartments for change, credit cards, etc., has a polyvinyl
chloride ("PVC") body with leather piping. A strip of leather,
approximately 7-1/2 inches long and approximately 1-3/4 inches
wide, reinforces the base of the article. A circular leather
logo patch, approximately one inch in diameter, has been sewn
onto the front of the article near the lower right-hand corner.
The sample designated as style 88921 is a wallet/credit card
holder, measuring approximately 4-1/2 inches by 5 inches when
closed and 8-3/4 inches by 5 inches when opened and laid flat, on
which leather piping borders cotton fabric. An all-leather
"change purse" with flap closure (measuring approximately 3-1/2
inches by 3 inches when the flap is closed and 3-1/2 inches by 4
inches when flap is open) has been affixed to one side of the
wallet and covers most of that side. A leather tab closure,
approximately 1-1/4 inches wide and 3 inches in length, extends
-2-
from this outer "change purse" to a snap closure on the other
side of the wallet. When fully open, the wallet reveals ten all-
leather credit card pockets, no other component material being
visible.
The sample designated as style 89021 is a wallet/credit card
holder with a snap closure. The wallet measures approximately 4-
1/4 inches by 3-3/4 inches when closed and approximately 4-1/4
inches by 9-1/2 inches when opened and laid flat. The body of
the wallet contains cotton fabric bordered by leather piping. A
leather flap, approximately 4-1/4 inches by 3-1/4 inches,
extends from the rear side of the wallet to the front, where it
covers a snap closure. When secured, the leather flap covers
more than half of the front side.
The sample designated as style 82551 is a key ring made of
brass which is attached to a triangle-shaped ornament by means of
a leather loop. One side of the ornament (solid color) is made
entirely of leather. The other side of the ornament (patterned)
consists of PVC with leather piping and contains a small brass
logo.
The sample designated as style 88121 is a key ring made of
brass which is attached to a circular leather ornament by a
leather loop. A circular brass logo has been affixed to one side
of the ornament.
You claim that the essential character of the outer surface
of style Nos. 81631, 88921 and 89021 is imparted by the leather
component and, therefore, each of these articles is classifiable
under subheading 4202.31.6000, HTSUSA, as articles of a kind
normally carried in the pocket or in the handbag with outer
surface of leather, of composition leather or of patent leather.
The rate of duty for this provision is 8 percent ad valorem.
Further, you maintain that the key rings made of brass and
designated as style Nos. 82551 and 88121 are classifiable under
the provision for other articles of leather or of composition
leather, other in subheading 4205.00.8000, HTSUSA, and entitled
to free entry.
ISSUE:
Whether the essential character of the women's wallet,
wallet/credit card holders and brass key rings is imparted by
their leather components.
-3-
LAW AND ANALYSIS:
General Rule of Interpretation (GRI) 3(b), HTSUSA, provides
as follows:
(b) Mixtures, composite goods consisting of different
materials or made up of different components and goods
put up in sets for retail sale, which cannot be
classified by reference to 3(a), shall be classified as
if they consisted of the material or component which
gives them their essential character, insofar as this
criterion is applicable.
The Explanatory Notes for GRI 3(b) state in pertinent part
as follows:
(VIII) The factor which determines essential character
will vary as between different kinds of goods. It
may, for example, be determined by the nature of the
material or component, its bulk, quantity, weight or
value, or by the role of a constituent material in
relation to the use of the goods.
You have expressed concern that Customs will determine
essential character of the outer surface based solely on a
physical measurement of the surface area of the component
materials comprising the outer surface area. Thus, if a textile
material predominates in area over each other single outer
surface material, the article will be considered to have an outer
surface of textile materials for tariff purposes.
In Headquarters letter 081165 PR dated October 27, 1987,
this office took the position that with respect to luggage and
related products, a determination of essential character can be
based on a measurement of the material of the outer surface.
Specifically, an item of luggage or a related product would be
considered as having an outer surface of textile materials if the
textile material predominates in area over each other single
outer surface material.
It is our position that a determination of essential
character of the outer surface of luggage and related products
cannot be based solely on the material contained therein which
predominates by outer surface area over any other single
material. Such a result would be contrary to the Explanatory
Notes for GRI 3(b), supra, which set forth additional criteria
for determining essential character. Consequently, HRL 081165 PR
dated October 27, 1987, has been modified by HRL 081374 dated
August 8, 1988, to reflect this view.
-4-
In support of your position you cite the case of Canadian
Vinyl Industries, Inc. v. United States, 76 Cust. Ct. 1, C.D.
4626 (1976), wherein the court found that certain polyurethane
skin with a nylon fabric backing was classifiable as flexible
sheets "almost wholly of plastics" made in imitation of patent
leather in item 771.40 Tariff Schedules of the United States.
For tariff purpose the phrase "almost wholly of" means that the
essential character of the article is imparted by the named
material. In finding that the polyurethane skin supplied the
essential character of the article, the court concluded that the
essential character of this article is the distinctive visual and
tactile quality of the polyurethane "skin." These qualities gave
the article its own special nature. The court further elaborated
saying that "the polyurethane skin of this importation, in
addition to supplying the essential visual and tactile
characteristics, also contributes attributes of strength and
flexibility in conjunction with the nylon backing."
Following the court's reasoning in the above-cited case you
assert that leather imparts the essential character of the outer
surface of the women's wallet and the credit card holders for the
following reasons:
(1) leather comprises a significant percentage of the
outer surface areas of these styles. In fact there
appears to be more leather than fabric in the
wallet/credit card holder designated as style No.
88921;
(2) the leather portions are integral to the construction
and design of these articles as leather is used in all
critical parts of the articles where flexibility and
durability are essential;
(3) leather, which is softer and more pliable than PVC and
longer lasting and less prone to fraying than cotton
fabric, is used on these articles at all stress points
such as corners, seams and snap closures;
(4) leather shapes the articles more effectively than PVC
or fabric;
(5) leather is vital to the effective use of the articles,
i.e., their ability to securely store currency, credit
cards, change, etc. throughout the day;
(6) leather is invaluable from a marketability standpoint.
Consumers perceive a distinct difference between all-
textile or all-PVC flat goods and similar articles with
-5-
leather trim, unquestionably preferring the appearance
of articles with leather to those without;
(7) if the leather portions were replaced by man-made
materials, consumers would not find the articles nearly
as desirable even though they would be far less
expensive;
(8) the articles involved would appeal to a different
segment of the consuming public if the leather
components were eliminated or substantially diminished;
(9) the importance of leather to the consumers is further
illustrated by the fact that for marketing purposes,
hangtags stating "Genuine Leather trim" are attached to
each of these articles when sold at retail. If such
hangtags did not accompany the articles some consumers
would not purchase the articles because they would not
be certain the leather is genuine;
(10) the fact that leather is in chief value, although no
longer dispositive for classification purposes under
the Harmonized System, militates toward a finding that
leather rather than PVC or fabric imparts the essential
character of the outer surfaces of these styles; and
(11) the value of the leather, in and of itself, attracts
consumers to these particular articles rather than ones
with far less (or no) leather.
Although a determination of essential character of the outer
surface of luggage and related products cannot be based solely on
a physical measurement of the component materials of the outer
surface area, it is our observation that such a measurement is of
paramount importance in determining whether the exterior surface
is "leather" or "textile" or "plastics". Specifically, when
viewing luggage and related products, the materials of the outer
surfaces produce a visual impact which in many instances leaves
little or no doubt as to what material gives the outer surfaces
their essential character.
An examination of the women's wallet, style 81631, reveals
that the plastic portion clearly predominates by surface area
over that covered by the leather. We note that the leather
present is primarily used as a trim. Thus, the presence of the
leather is subsidiary to the presence of the plastic material.
When one views this sample, the impression given by the outer
surface is that of a plastic article.
-6-
An examination of the wallet/credit card holder, style
89021, reveals that the textile portion predominates by surface
area over that covered by the leather. In this instance leather
is used as a part of the closure and also as a trim. Again the
presence of the leather is subsidiary to the presence of the
textile material. When one views this sample, the impression
given by the outer surface is that of a textile article.
An examination of the wallet/credit card holder, style
88921, reveals that the textile material may predominate only by
a small margin of surface area covered over that covered by the
leather. In this instance the margin is so small that we are
unable to state that the fabric portion of the article imparts
its essential character. Consequently, we are compelled to turn
to GRI 3(c), and GRI 6, HTSUSA, which provide as follows:
3. * * *
(c) When goods cannot be classified by reference to 3(a)
or 3(b), they shall be classified under the heading
which occurs last in numerical order among those
which equally merit consideration.
6. For legal purposes, the classification of goods in the
subheadings shall be determined according to the terms of
those subheadings and any related subheading notes and,
mutatis mutandis, to the above rules, on the understand-
ing that only subheadings at the same level are
comparable. For the purposes of this rule, the relative
section, chapter and subchapter notes also apply unless
the context otherwise requires.
The subheadings which equally merit consideration here are
subheading 4202.31, HTSUSA, providing for articles of a kind
normally carried in the pocket or in the handbag, with outer
surface of leather, and subheading 4202.32, HTSUSA, providing for
articles of a kind normally carried in the pocket or in the
handbag, with outer surface of textile materials. Following GRI
3(c), HTSUSA, classification of the wallet/credit card holder,
style 88921, under subheading 4202.32, HTSUSA, is appropriate.
Your claim that chief value should be a factor which
militates toward a finding that leather constitutes the essential
character of these articles is without merit. The concept of
chief value plays no role in the classification of merchandise
under the HTSUSA.
-7-
The Explanatory Notes to GRI 3(b) state that value may be a
factor in determining essential character. Here it is claimed
that the value of the leather is greater than the other exterior
materials and is the element that attracts the buyer. Value, in
either situation as proposed by you, has little or no impact in
this case in determining essential character.
You suggest that confirmation of your view that leather
imparts the essential character of the articles under the HTSUSA
would be in accord with the President's intent that the
Harmonized System conversion be duty neutral.
This particular argument is irrelevant in this instance.
The President's guidelines for the conversion from the Tariff
Schedules of the United States (TSUS), to the Harmonized Tariff
Schedules of the United States (HTSUS), do not mandate that every
article be subjected to the same rate of duty under the HTSUS as
it was under the TSUS.
The key rings designated as styles 82551 and 88121 are
currently classifiable under the provision for other objects of
personal adornment valued over 20 cents per dozen pieces or parts
in item 740.41, TSUS, and dutiable at the rate of 11 percent ad
valorem. A similar HTSUSA provision covers other imitation
jewelry in subheading 7117.90.5000, HTSUSA, with duty at the rate
of 11 percent ad valorem. However, the Explanatory Note to
Heading 7117, states:
It is to be noted that articles of personal use of a
kind normally carried in the pocket, in the handbag
or on the person, such as those listed in paragraph
(B) of the Explanatory Note to Heading 71.13 ...
[e.g., key rings] are not regarded as imitation
jewelry.
Assuming that the key rings are of leather as required by
heading 4202, they could not be classified therein because
heading 4202 enumerates only articles which are containers and
cases.
As to these key rings, we are aware that leather comprises a
substantial percentage of the key ring ornaments and indeed may
be the dominant feature of the articles in a visual sense. How-
ever, the U.S. Customs publication entitled "Harmonized System
Handbook" states in pertinent part that "the essential character
of a product has generally been construed to mean 'the attribute
which strongly marks or serves to distinguish what an article is;
that which is indespensable [sic] to the structure, core or
condition of the article'". Applying this test to the key rings,
we find that the brass portion of the articles which is the key
-8-
ring itself is the component which gives the key rings their
essential character. Specifically, the metal portion plays a
most significant role in the use of the rings and is
indispensable to their structure, core or condition.
HOLDING:
The women's wallet, style 81631, is classifiable under
subheading 4202.32.2000, HTSUSA, as articles of a kind normally
carried in the pocket or in the handbag, with outer surface of
plastic sheeting, other, with duty at the rate of 20 percent ad
valorem.
The wallet/credit card holder, style 89021, is classifiable
under subheading 4202.32.4000, HTSUSA, textile category 369, as
articles of a kind normally carried in the pocket or in the
handbag, with outer surface of textile materials, of cotton, with
duty at the rate of 7.2 percent ad valorem.
The wallet/credit card holders, styles 89021 and 88921 are
classification under subheading 4202.32.4000, HTSUSA, textile
category 369, as articles of a kind normally carried in the
pocket or in the handbag, with outer surface of textile
materials, of cotton with duty at the rate of 7.2 percent ad
valorem.
The key rings, styles 82551 and 88121, made of brass, are
classifiable under subheading 7419.99.5050, HTSUSA, as other
articles of copper, other, other, other, other with duty at the
rate of 5 percent ad valorem.
These classifications represent the current position of the
Customs Service regarding the dutiable status of the merchandise
under the HTSUSA which will be effective on January 1, 1989. If
there are changes before that date, this advice may not continue
to be applicable.
Sincerely,
John Durant, Director
Commercial Rulings Division
6cc: A.D. N.Y. Seaport
1cc: John Durant
1cc: Kevin Gorman N.Y. Seaport
1cc: Commerce
1cc: Tom Budnik
DCahill:tj:typed 08/09/88
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