CLA-2 CO:R:C:T 951218 JED
Mr. Geoff Phillips
Tic-La-Dex Business Systems, Inc.
3443 Camino Del Rio South
Suite 326
San Diego, California 92108-3901
RE: Modification of HQ 950397; Classification of a portfolio
in Heading 4820
Dear Mr. Phillips:
On January 23, 1992, Headquarters Ruling (HQ) 950397 was
issued to you concerning the classification of a portfolio. It
has been brought to our attention that the ruling requires
modification.
FACTS:
The merchandise involved in HQ 950397 consisted of a
portfolio, with an outer surface of fabric-backed cellular
plastics over stiffening pieces of paperboard, which was
closeable by lock and key. The portfolio was designed to hold a
two year monthly calendar (planner); a built-in calculator; 100
assorted color "calendar" cards (3" x 5"); a removable credit
card wallet; a 8" x 10" writing pad; a full-size file folio
section; and pockets for business cards and papers.
In the analysis of this matter, HQ 950397 began by
eliminating Heading 4202, HTSUSA, as a possible classification
for the article. The ruling quoted from and adopted a statement
made in Headquarters Ruling Letter (HRL) 088430 (April 11, 1991),
a ruling wherein a tri-fold planner was determined not to be the
type of merchandise which would fall within the purview of
"similar containers" as set forth in Heading 4202, HTSUSA.
"Although the planner may appear to be related to the
containers of heading 4202, HTSUSA, they are not
similar in that they are not designed or intended for
use in a similar manner, nor do they exhibit the
requisite physical attributes that Customs has found
common to the goods of heading 4202, HTSUSA."
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The portfolio in HQ 950397 was primarily intended to
organize information and belongings. It was determined not to be
a similar article to those containers included in Heading 4202.
Also note that the Explanatory Notes (EN's) at 42.02 (pg.
613) state that Heading 4202, HTSUSA, does not cover "[a]rticles
which although they may have the character of containers, are not
similar to those enumerated in the heading, for example, book
covers and reading jackets, file-covers, document jackets..."
The portfolio here protects and organizes its contents much like
a file-cover.
Heading 4820, HTSUSA, was the next choice for
classification. However, the presence of the calculator, covered
by Heading 8470, HTSUSA, precluded a simple GRI 1 classification.
Accordingly, a GRI 3(b) analysis resulted in determining the
essential character of the article was imparted by the portfolio.
"The role of the portfolio with its paper, cards and pockets is
indispensable to the overall use of the item. The portfolio is
more than a container; it functions to bring together all the
component goods to enable the user to employ them in a
coordinated and organized fashion." Based on this determination,
classification was deemed proper at subheading 4820.10.2050,
HTSUSA.
Two concerns were brought to our attention regarding such
classification. First, the description of the subject portfolio
might be incompatible with Heading 4820, HTSUSA, because an
article of subheading 4820.10.20 must be either a diary,
notebook, address book, memorandum pad, letter pad, or an
article similar to a memorandum pad or letter pad. Secondly, an
article of Heading 4820, HTSUSA, must be "of paper or
paperboard", and the subject portfolio might not comply.
LAW AND ANALYSIS:
Heading 4820, HTSUSA, reads as follows:
Registers, account books, notebooks, order books, receipt
books, letter pads, memorandum pads, diaries and similar
articles, exercise books, blotting pads, binders (looseleaf
and other), folders, file covers, manifold business forms,
interleaved carbon sets and other articles of stationery, of
paper or paperboard; albums for samples or for collections
and book covers (including cover boards and book jackets) of
paper or paperboard:
EN 48.20 (pg. 687) is pertinent to the present analysis:
This heading ... includes:
* * *
(3) Binders designed for holding loose sheets, magazines,
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or the like (e.g., clip binders, spring binders, screw
binders, ring binders), and folders, file covers,
files (other than box files) and portfolios.
(Emphasis added.)
* * *
The statement is also made in the EN's that, "[t]he goods of this
heading may be bound with materials other than paper (e.g.,
leather, plastics or textile material) and have reinforcements or
fittings of metal, plastics, etc."
An interpretation of Heading 4820, HTSUSA, that an article
that is not specifically named in the heading can only then be
included by similarity to a memorandum pad or letter pad is too
restrictive. Similarity to a diary is also a characteristic
entitling an article to classification within Heading 4820,
HTSUSA. A positive finding of similitude between articles like
the portfolio in the instant case and a diary has occurred in
other recent classification rulings. For example, in HQ 951076
(March 18, 1992),:
The term "diary" as defined by the Compact Edition of
the Oxford English Dictionary 1987, states:
2. A book prepared for keeping a daily record, or
having spaces with printed dates for daily memoranda
and jottings; also applied to calendars containing
daily memoranda on matters of importance to people
generally, or to members of a particular profession,
occupation, or pursuit.
* * *
The "Pocket Secretary" ... containing a calendar,
address book and note pad is designed to keep daily
records and memoranda.
The portfolio of HQ 950397 is designed to facilitate keeping
daily records, taking notes, etc., and organizing all such
material in a single convenient location. Accordingly, we affirm
HQ 950397 on its finding of similitude between the subject
portfolio and a dairy and the consequent inclusion of the
portfolio within the ambit of Heading 4820. (See also HQ 088791
(March 9, 1992) and HQ 089960 (February 10, 1992).) However,
upon reflection, we believe 950397 erred in placing the article
in the subheading for "Diaries...bound..." The removable credit
card wallet and writing pad in the item were held in place by
slipping their backings into appendages on the inside of the
portfolio, and the calendar was simply placed inside.
This makes the portfolio quite similar to the "Pocket
Secretary" of HQ 951076 (March 18, 1992), "which contains three
independent paper articles: a telephone/address book, a 20-month
engagement calendar book, and a note pad. These are held in
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place by means of cardboard appendages slipped into pockets on
the inside of the leather case." HQ 951076 later concluded,
"Customs does not consider the submitted article to be bound. As
such, proper classification is under subheading 4820.10.4000,
HTSUSA, as "other" diaries and similar articles." Similarly, we
do not consider the article in HQ 950397 to be bound. Therefore,
HQ 950397 is modified to the extent the classification at the
subheading level is changed to 4820.10.4000, HTSUSA.
As to the concern over the constituent materials of the
portfolio, classification of an article in Heading 4820, HTSUSA,
is not precluded by the presence of materials other than paper
and/or paperboard.
The discussion in HQ 950397 concerning the application of
GRI 1 not being determinative of the classification of the
portfolio, and the necessity of applying GRI 3(b) to determine
the essential character was appropriate in that instance. In
particular, the presence of a calculator, an item not normally
associated with paper products, necessitated a specific analysis
of whether the calculator contributed the essential character of
the item. The analysis concluded, correctly, that the calculator
did not establish the essential character of the item. However,
upon further consideration, we believe that the conclusion in HQ
950397 that the essential character is derived from the portfolio
is incorrect. The essential character comes from the
substantial amount of paper products in the item, i.e., the index
cards, the note pad, and especially the calendar. If we
continued to find essential character from the portfolio, we
would no doubt be someday confronted with an item just like the
item of HQ 950397, but without the paperboard stiffening present
in that item, and therefore be constrained from classifying the
article in Heading 4820, HTSUSA.
HOLDING:
HQ 950397 (January 23, 1992) is modified to the extent that
classification at the subheading level is changed to
4820.10.4000, HTSUSA, and the analysis concerning "essential
character" of the item is modified as discussed above.
In order to ensure uniformity in Customs' classification of
this merchandise and eliminate uncertainty, pursuant to section
177.9(d)(1), Customs Regulations (19 CFR 177.9(d)(1)), HQ 950397
is modified to reflect the above classification effective with
the date of this letter. If, after review, you disagree with the
legal basis for our decision, we invite you to submit any
arguments you may have with respect to this matter. Any
submission you wish to make should be received within 30 days of
the date of this letter.
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This modification is not retroactive. However, HQ 950397
will not be valid for importations of the subject merchandise
arriving in the United States after the date of this notice. We
recognize that pending transactions may be adversely affected
(i.e., merchandise previously ordered and arriving in the United
States subsequent to this modification will be classified
accordingly). If it can be shown that you relied on HQ 950397 to
your detriment, you may apply to this office for relief.
However, you should be aware that in some instances involving
import restraints, such relief may require separate approvals
from other government agencies.
Sincerely,
John Durant, Director
Commercial Rulings Division