CLA-2 RR:CR:GC 961020 MMC
Mr. Arlen T. Epstein
Serko & Simon
One World Trade Center
Suite 3371
New York, NY 10048
RE: NYRL B89587 affirmed; Stuffed Jointed Teddy Bear Key Ring
Dear Mr. Epstein:
This is in reference to your October 10, 1997, letter, on
behalf of Russ Berrie and Company, requesting reconsideration of
New York Ruling Letter (NYRL) B89587 dated September 19, 1997,
concerning, among other things, the classification of a stuffed,
jointed, teddy bear key ring under the Harmonized Tariff Schedule
of the United States (HTSUS). A sample was submitted for our
examination.
FACTS:
The subject article, identified as item # 1813, is a steel
chain with a stuffed 2 inches long teddy bear with jointed arms
and legs, attached to one end and a steel key loop attached to
the other end. It is made in China. The headings under
consideration are as follows:
9503 Other toys; reduced-size ("scale") models and
similar recreational models, working or not;
puzzles of all kinds; parts and accessories
thereof
7326 Other articles of iron or steel
ISSUE:
Whether the stuffed, miniature, jointed, teddy bear key ring
is classifiable as a toy for tariff purposes.
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with
the General Rules of Interpretation (GRIs). The systematic
detail of the Harmonized System is such that virtually all goods
are classified by application of GRI 1, that is, according to the
terms of the headings of the tariff schedule and any relative
Section or Chapter Notes. In the event that the goods cannot be
classified solely on the basis of GRI 1, and if the headings and
legal notes do not otherwise require, the remaining GRIs may then
be applied.
In NYRL B89587, the steel key loop was determined to impart
the essential character of the article. Therefore, the article
was classified under subheading 7326.20.00, HTSUS, which provides
for [o]]ther articles of iron or steel: [o]ther. You contend
that the article should be classified in heading 9503, HTSUS, as
a toy. The subject key chain consists of a metal key ring and
chain attached to a stuffed, jointed, teddy bear. No one heading
of the HTSUS specifically provides for the article as a whole.
The teddy bear component of the article is described by heading
9505, HTSUS. The ring and chain component is described by
heading 7326, HTSUS, as an article of iron or steel. As no one
heading describes the article as a whole, the teddy bear key
chain is considered a composite good consisting of both a toy and
metal portion. As such, it cannot be classified according to GRI
1.
GRI 2(a) is inapplicable because it applies to incomplete or
unfinished articles, and the key chain is imported in a finished
complete condition. GRI 2(b) states, in pertinent part, that any
reference in a heading to a material or substance shall be taken
to include a reference to mixtures or combinations of that
material or substance with other materials or substances. The
classification of goods consisting of more than one material or
substance shall be according to the principles of GRI 3.
GRI 3(a) states that when, by application of rule 2(b) or
for any other reason, goods are, prima facie, classifiable under
two or more headings, 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 or to part only of the items in a set
put up for retail sale, 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. As
the teddy bear key chain is a composite good, we must apply rule
3(b), which provides that composite goods are to be classified
according to the component that gives the good its essential
character.
In understanding the language of the HTSUS, the Explanatory
Notes (ENs) of the Harmonized Commodity Description and Coding
System may be utilized. The ENs, although not dispositive or
legally binding, provide a commentary on the scope of each
heading, and are generally indicative of the proper
interpretation of the HTSUS. See, T.D. 89-80, 54 Fed. Reg. 35127
(August 23, 1989).
EN VIII to GRI 3(b) explains that "[t]he 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 the constituent material in relation to
the use of the goods." We must determine whether the stuffed
jointed bear or the metal key ring imparts the essential
character to this article.
You claim that the essential character of the key ring is
imparted by the teddy bear component because it comprises the
substantial majority of the weight, value and bulk of the
article. We disagree. We believe that, in this instance, these
factors do not resolve the issue of essential character. It is
the role of the constituent materials in relation to the use of
the goods that imparts the essential character.
Customs has consistently held that, when a key chain has
both a functional and non- functional component it is the
functional component which provides the article's essential
character. See Headquarters Ruling Letter (HRL) 950636, dated
January 16, 1992. Further, in HRL 960118 dated July 28, 1997, we
determined that a functional key chain/ring, not a voice
synthesizer comprised a key ring's essential character. See
also, HRL 959473 dated April 8, 1997 and HRL 958452 dated July 3,
1996. Concerning the subject article, it is the ring/chain
component which makes up the utilitarian portion of the article,
whereas the miniature teddy bear is primarily for decorative
purposes. Moreover, we believe that the article will be used
predominantly to hold keys. We therefore find that it is the
metal key ring that imparts the essential character. As such it
is classifiable in subheading 7326.20.0050, HTSUS, as: [o]ther
articles of iron or steel: [a]rticles of iron or steel wire:
[o]ther, with a column one duty rate of 4.3 percent ad valorem.
NYRL B89587 is affirmed.
HOLDING:
The teddy bear key ring is classifiable in subheading
7326.20.0050, HTSUS, as: [o]ther articles of iron or steel:
[a]rticles of iron or steel wire: [o]ther, with a column one duty
rate of 4.3 percent ad valorem. NYRL B89587 is affirmed.
Sincerely,
John Durant, Director
Commercial Rulings Division