HQ H061116
CLA-2 RR:CTF:TCM H061116 MG
Port Director
U.S. Customs and Border Protection
2831 Talleyrand Avenue
Jacksonville, Florida 32206
RE: Request for Internal Advice; Classification of Coach Lanyard Card Case
Dear Port Director:
This is in reply to your correspondence, dated April 24, 2009, forwarding a request for internal advice filed by McGuire Woods, on behalf of Coach Services, Inc., regarding the classification of a Lanyard Card Case under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). Product description and specifications were submitted for our review. In reaching our decision, consideration was also given to the substance of a telephone conference with a member of my staff on December 8, 2010 and post-meeting submissions received from counsel on December 9, 2010 and December 22, 2010.
FACTS:
The merchandise in question consists of two Style, Nos. 60001 and 60159, comprised of a leather lanyard and a leather card case. The styles are identical but for color and leather type. The card case consists of a two-sided card case measuring 3.93” x 2.64”. One side of the card case has a transparent (mylar) window intended to display an identification card. The other side of the card case, has two pockets for other cards, such as identification cards, credit cards, or business cards. The leather lanyard measures 14.17” and is detachable. The leather lanyard also has a metal handtag, a jump ring and dog leash.
ISSUE:
Whether the Lanyard Card Case is classified under subheading 4202.31.60, HTSUS, which covers, in part, articles of a kind normally carried in the pocket or in the handbag, with an outer surface of leather, or under subheading 4205.00.80, HTSUS, which covers other articles of leather.
LAW AND ANALYSIS:
The following HTSUS provisions are under consideration:
4202 Trunks, suitcases, vanity cases, attaché cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers;
traveling bags, insulated food or beverage bags, toiletry bags,
knapsacks and backpacks, handbags, shopping bags, wallets,
purses, map cases, cigarette cases, tobacco pouches, tool bags,
sports bags, bottle cases, jewelry boxes, powder cases, cutlery
cases and similar containers, of leather or of composition leather,
of sheeting of plastics, of textile materials, of vulcanized fiber or of
paperboard, or wholly or mainly covered with such materials or with
paper:
* * *
Articles of a kind normally carried in the pocket or in the handbag:
4202.31 With outer surface of leather, of composition leather
or of patent leather:
* * *
4202.31.60 Other.
* * * *
4205 Other articles of leather or of composition leather:
* * *
Other:
Other:
* * *
4205.00.80 Other.
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI's). GRI 1 provides that the classification of goods shall be determined 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 based on GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI’s 2 through 6 may then be applied in order. In addition, in interpreting 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).
Coach asserts that the subject merchandise is not of the class or kind of articles normally carried in the pocket or purse classified under heading 4202, HTSUS, but rather, as an “other” article of leather under heading 4205, HTSUS. We note at the outset that heading 4205, HTSUS, is a residual or “basket” provision and such provisions are intended as “broad catch-alls to encompass the classification of articles for which there is not a more specifically applicable subheading. EM Industries, Inc. v. United States, 22 C.I.T. 156, 999 F. Supp. 1473, 1480 n.9 (1998). Therefore, in order for the merchandise to be classified as “other articles” under heading 4205, HTSUS, it must be affirmatively excluded from classification within heading 4202, HTSUS.
Heading 4202, HTSUS, provides, in relevant part, for wallets and similar containers of leather or of composition leather. EN 42.02 indicates that the heading covers only those articles specifically named, and “similar containers.” As to the broad reach of the residual provision for “similar containers” in heading 4202, HTSUS, by virtue of ejusdem generis the subject merchandise need only possess the essential character or purpose running through all of the enumerated examples contained in heading 4202, HTSUS, to be classified under that heading. Totes, Incorporated v. United States, 18 C.I.T. 919, 925, 865 F.Supp. 867, 872 (1994). The common characteristic or unifying purpose of the goods in heading 4202, HTSUS, consists of “organizing, storing, protecting and carrying various” items. See Avenues in Leather, Inc. v. United States, 317 F.3d 1399, 1402 (Fed. Cir. 2003).
Coach posits that the merchandise at issue is a composite good comprised of the lanyard and card carrying case, wherein the components are prima facie classifiable under two or more headings and classification is not possible under GRI 1. Specifically, Coach argues the card case is classifiable under heading 4202, HTSUS and the lanyard is classifiable under 4205, HTSUS. Because this article is not specifically provided for under a single heading in the HTSUS and headings 4202 and 4205, HTSTS, remain under consideration, we next look to GRI 2(b), which states:
The classification of goods consisting of more than one material or substance shall be according to the principles of rule 3.
GRI 3(a) requires that the headings are regarded as equally specific when they each refer to part only of the materials contained in composite goods. Since each of the headings refers to part only of the materials, GRI 3(a) requires that the headings be regarded as equally specific despite any disparity in their texts. For this reason, we next examine GRI 3(b).
GRI 3(b) states, in part, that:
...composite goods...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.
As with GRI 3(a) above, the applicability of GRI 3(b) depends somewhat upon whether or not the complete article is deemed to comprise a composite good. In pertinent part, Explanatory Note IX to GRI 3(b) indicates that:
For the purposes 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.
In this instance, the lanyard and card case are separable. The components are adapted to each other for the purpose of continuous, hands-free display of an item - in this case, one side of the card case has a transparent (mylar) window intended to display an identification card and the other side has two pockets for other cards, such as identification cards, credit cards, or business cards. Lanyards are normally sold either separately or with the articles they are intended to suspend (e.g., knives, whistles, split rings, key chains, compasses, bottle openers, small cameras, ski wallets, etc.) Because the card case and the lanyard are not normally offered for sale separately, we find that the instant lanyard and card case comprise a composite good. See Headquarters Ruling Letters (HQ) 965072, dated September 19, 2001.
In order to determine the essential character of the composite good, we look to Explanatory Note VIII to GRI 3(b), which provides the following guidance:
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.
If it is determined that components are of equal importance, classification is in the provision that occurs last in numerical order. GRI 3(c). In the instant case, the card case is classified in subheading 4202.31.60, HTSUS and the lanyard is classified in subheading 4205.00.80, HTSUS. See, HQ 965085, dated September 18, 2001 (lanyard classified on the basis of the material that made up the strap.)
Given the information supplied by Coach, we note that the cost of the lanyard and its components is almost twice as much as the cost of the card case. In terms of use, we note that the nature and role of the lanyard component, which is to allow the card case to be carried around the neck, is equal to those of the card case. We thus find that the lanyard and the card case are co-equal in terms of their use and value. Therefore, neither component imparts the essential character to the merchandise.
As previously stated, when none of the components imparts the essential character of a good, classification lies in the provision, which appears last in numerical order. In this case, that provision is heading 4205, HTSUS, specifically, subheading 4205.00.80, HTSUS, which provides for “Other articles of leather or of composition leather: Other: Other: Other.”
HOLDING:
By application of GRI 3(c), the lanyard card case Style, Nos. 60001 and 60159, are classifiable under heading 4205, HTSUS, specifically under subheading 4205.00.80, HTSUS, which provides for “Other articles of leather or of composition leather: Other: Other: Other.”
Sixty days from the date of the decision, the Office International Trade, Regulations and Rulings, will make this decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division