CLA-2 RR:TC:FC 958452 ALS

Port Director of Customs
U.S. Customs Service
1 E. Bay St., Room 104
Savannah, GA 31401

RE: Request for Further Review of Protest 1704-95-100237, Dated April 28, 1995, Concerning the Classification of a Bead Key Chain with a Miniature Plastic Box Attached Thereto

Dear Mr. Richter:

This is in reference to a protest filed against decisions of February 10 and March 17, 1995, concerning the classification of an item invoiced as "Storzalots Key Chain."

FACTS:

The product under consideration is a composite article consisting of a plastic box with a lid which has an appendage on both the lid and box through which is threaded a length of beaded/ball chain with a clasp. The box measure approximately 2 inches by 1 1/4 inches by 5/8 inch. It is a miniature replica of a full size container marketed by the importer. The box is a promotional, advertising type of article which is generally given away at sales demonstration meetings known as "parties" where the importer's products are demonstrated and sold. The imported article, which is identified on the invoice and other entry documents as a key chain, is not sold.

ISSUE:

What is the classification of the subject article?

- 2 -

LAW AND ANALYSIS:

Classification of merchandise under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) is governed by the General Rules of Interpretation (GRI's) taken in order. GRI 1 provides that the classification is determined first in accordance with the terms of the headings and any relative section and chapter notes. If GRI 1 fails to classify the goods and if the headings and legal notes do not otherwise require, the remaining GRI's are applied, taken in order.

The subject article was entered under subheading 7117.90.5000, HTSUSA, as imitation jewelry. Both the importer and Customs at the port of entry have agreed that such classification was erroneous. The importer has suggested that the article should be classified in subheading 7315.89.5000, HTSUSA, which provides for "Chain and parts thereof, of iron or steel: other chain: Other: Other." The importer notes that the relative Explanatory Notes (EN) indicate that beaded chain is included in this provision. The importer has alternatively suggested that the article should be classified in subheading 7326.20.0050, HTSUSA, as other articles of steel, other.

We note that while there is agreement that the article was incorrectly entered and liquidated, the port of entry disagrees with the importer's suggested classifications. It has suggested that the plastic box, which is attached to the key chain, forms the essential character of the product and that classification as an article of plastic is appropriate.

The subject article, which is invoiced as a key chain, is similar to other promotional key chains distributed by the importer. They are miniature replicas of products distributed by the importer and are too small to be functional. We note that key chains frequently have attachments, whether decorative or functional. Articles consisting of a key chain with a decorative attachment have been considered to have the essential character of the key chain and have been so classified in accordance with the provisions of GRI 3(b).

When the attachment to the chain appears to be functional a question arises as to which component, the chain or the attachment, forms the essential character of the article. In Headquarters Ruling Letter 950636, dated January 16, 1992, which covered a plastic photo frame attached to a metal key ring, we indicated that "the steel element of the subject key rings is what makes up the utilitarian portion of the key rings. It is the part that keeps keys together, which is the primary purpose - 3 -

of key rings. The plastic element is present for decorative purposes and to add bulk to the entity."

Other Headquarters rulings, e.g., HRL 950980, dated January 21, 1992, regarding chains with plastic holders for credit cards or charms attached thereto, and HRL 089282, dated August 2, 1991, regarding a key ring with a pencil and miniature memo pad attached thereto, held that the key chain/ring formed the basis for classification although the attachments had functional capabilities. However, such functional capabilities may cause a question to arise as to which component of the product, if any, form the essential character of the product, e.g., HRL 081193, dated August 2, 1988, in which the attachment was a calculator with a built-in timekeeping mechanism. In that ruling we held that the essential character was equally dependent on the calculator and the key chain.

A question arises as to whether the instant article has any functional capabilities because its lid can be opened and snapped shut. It has been suggested that the article could be used to hold a few pills or coins. The broker, however, has advised us that the article, which is given away as a free promotional item, is not intended for this purpose, that the plastic hinges would break if the article was used in such fashion and that the only reason the plastic box opens is because it is designed to replicate the importer's full-sized article. We note that if the article were to be used as a pill box, one would have to presume that the user would use the chain to attach the article to a belt or some other article. We do not believe that this is the normal course of action for the adult female consumer, to whom the importer markets it product, or a male consumer. Our observation is that the user of a pill box would keep it in another container, such as a purse, or a pocket, and not attach it to a belt of other article. In this regard, we note that the importer has distributed other miniature replicas of its products as promotional items and that these items are too small to be functional. Thus, we believe that it was intended that the ball chain function as a key chain rather than an attaching device, that the chain is the primary functional component of the article and that the plastic article merely serves as a reminder of the availability of certain of the importer's products. Accordingly, we have concluded that the chain is the focus for the proper classification of the composite article and that it is not classifiable as an article of plastic.

Since it is agreed that the article is not an article of imitation jewelry, the questions remains as to under which of two subheadings in chapter 73, HTSUSA, the article should classified. - 4 -

The suggested alternatives are subheading 7315.89.5000, HTSUSA, which provides for chain and parts thereof, of iron or steel: other chain and subheading 7326.90.8585, HTSUSA, which provides for other articles of iron or steel. We note that subheading 7315.89.5000, HTSUSA, more specifically describes the article under consideration. Further, the Explanatory Notes to the Harmonized System (EN), which represent the view of the international classification experts, specifically notes that heading 73.15 covers ball chain. Accordingly, we have concluded that the subject article should be classified thereunder. HOLDING:

Ball/beaded chain with a clasp to which a miniature plastic box is attached is considered to be a key chain and is classifiable in subheading 7315.89.5000, HTSUSA, which provides for Chain and parts thereof, of iron or steel: Other chain: Other: Other.

Since reclassification of the merchandise as indicated above will result in a lower rate of duty than the liquidated or claimed rate you are instructed to allow the protest in full.

A copy of this ruling should be attached to the Customs Form 19 and provided to the protestant as part of the notice of action on the protest.

In accordance with Section 3A(1)(b) of Customs Director 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be provided by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entries in accordance this decision must be accomplished prior to the mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Tariff Classification
Appeals Division