CLA-2 CO:R:C:M 089282 DFC
Mr. Steven M. Kott
Manager Foreign
Merchandise Services
K-Mart Apparel Corporation
7373 West Side Avenue
North Bergen, New Jersey 07047-6411
RE: Chain, key, novelty w/pocket memo pad and pencil
Dear Mr. Kott:
In a letter dated March 19, 1991, you inquired as to
the tariff classification under the Harmonized Tariff Schedule
of the United States Annotated (HTSUSA) of a novelty key chain
with a suede covered pocket memo pad and pencil produced in
Taiwan. A sample was submitted for examination.
FACTS:
The merchandise involved consists of a split ring key
chain, a 1-1/2 inch long wood pencil, and a suede covered
miniature memo pad and paper. These components form an
article which is a novelty key chain. This article measures
2.25 inches x 2 inches when contained in the suede tri-fold
container. The memo pad is bound on one side by an adhesive
material and is inserted in a loop holder within the cover.
The memo paper consists of approximately ten sheets of paper
which have an adhesive material on the back of each sheet and
are inserted in a slit in the interior back cover. The suede
cover is specially shaped and fitted to contain only the memo
paper. The article is identified as style no. 2315 and is a
product of Taiwan.
-2-
ISSUE:
What component imparts the essential character to the
article?
LAW AND ANALYSIS:
Classification of goods under the HTSUSA is governed by
the General Rules of Interpretation (GRI's). GRI 1 provides
that "classification shall be determined according to the terms
of the headings and any relative section or chapter notes, and,
provided such headings or notes do not otherwise require,
according to [the remaining GRI's taken in order]." In other
words, classification is governed first by the terms of the
headings of the tariff and any relative section or chapter notes.
Inasmuch as the product is composed of different materials,
GRI 3 is applicable. Its relevant portions read as follows:
3. When, by application of rule 2(b) or for any other
reason, goods are, prima facie, classifiable under two
or more headings, classification shall be effected as
follows:
(a) The heading which provides the most specific
description shall be preferred to headings
providing a more general description. However,
when two or more headings each refer to part only
of the materials or substances contained in mixed
or composite goods . . . those headings are to be
regarded as equally specific in relation to those
goods, even if one of them gives a more complete
or precise description of the goods.
(b) Mixtures, composite goods consisting of different
materials or made up of different components, . .
. 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.
-3-
GRI 3(b), is relevant here because GRI 3(a) cannot be used
in determining classification of the product. The Explanatory
Notes to the HTSUSA (EN), although not dispositive, should be
looked to for the proper interpretation of the HTSUSA. See 54 FR
35128 (August 23, 1989). EN (IX) to GRI 3(b) at page 4 reads as
follows:
(IX) For the purpose of this Rule, composite goods made up
of different components shall be taken to mean not only
those in which the components are attached to each
other to form a practically inseparable whole but also
those with separable components, provided these
components are adapted one to the other and are
mutually complementary and that together they form a
whole which would not normally be offered for sale in
separate parts.
It is our opinion that the components involved meet the
definition of composite goods. They are separable items e.g., a
pencil, a memo pad and paper, a key ring chain and a suede tri-
fold cover. They are adapted for use together. Specifically, the
suede cover is designed to hold the pencil, memo pad and paper
and has a circular hole to which the key ring chain is attached.
Additionally, these components are mutually complementary and
are not normally offered for sale separately.
Composite goods are classifiable as if they consisted of the
component which gives them their essential character. EN VIII
to GRI 3(b) at page 4 reads 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.
It is our observation that the metal key ring with chain
gives the product its essential character. Our reason for this
conclusion is that it is fairly obvious that the predominant use
of this product will be as a key chain. The presence of the
other components comprising the product is secondary to the key
chain. Further, even if the paper and pencil were consumed and
not replaced, the key chain could still be used.
-4-
The product is classifiable under subheading 7326.90.90,
HTSUSA, as other articles of iron or steel, other, other, with
duty at the rate of 5.7 percent ad valorem.
HOLDING:
The metal key ring chain imparts the essential character to
the product.
The composite article consisting of a split ring key chain,
a pencil, and a suede covered miniature memo pad and paper is
classifiable under subheading 7326.90.90, HTSUSA.
Sincerely,
John Durant, Director
Commercial Rulings Division
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089282