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HQ 960990

February 3, 1998

CLA-2 RR:TC:TE 960990 RH


TARIFF NO.: 4202.32.1000

Mr. Christopher L. Thayer
Hallmark Cards, Inc.
Kansas City, MO 64141

RE: Classification of a Coupon Holder; Heading 4202; Heading 4820; Articles of a Kind Normally Carried in the Pocket or in the Handbag; Outer Surface Of; Plastic Coated Paper

Dear Mr. Thayer:

This is in reply to your letter of August 20, 1997, requesting a ruling on the tariff classification of a coupon file, on behalf of Hallmark Cards, Inc.

You sent us a sample of the coupon file to examine. In order to return the sample, as requested, you will need to contact Rebecca Hollaway of my staff at (202) 927-2379, and provide her with your Federal Express account number.


Customs National Import Specialist describes the merchandise at issue as follows:

The sample submitted is an accordion style coupon holder designed to organize and store coupons. The coupon holder is identified as article number 695RA1674. It measures approximately 6.75" x 4" x 1", when empty. The holder is manufactured of a plastic coated paper outer cover with an interior bellows type filing system of paper. There are 12 individual sections which are labeled with various designations typical of grocery store products. The holder is secured by means of an elastic cord which wraps around its'[sic] center.

You propose three subheadings under which to classify the coupon holder. Subheading 4820.50 of the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), encompasses albums for samples or for collections. Subheading 4820.30, HTSUSA, provides for binders, folders or file covers. Subheading 4202.39, HTSUSA, includes articles of a kind normally carried in the pocket or in the handbag.


What is the correct classification of the coupon holder?


Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification is determined first in accordance with the terms of the headings of the tariff and any relative section or chapter notes. Where goods cannot be classified on the basis of GRI 1, the remaining GRI will be applied in order. Two headings are at issue in this case. Heading 4202, HTSUSA, provides for:

Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling 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 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.

Heading 4820, encompasses:

Registers, account books, notebooks, order books, receipt books, letter pads, memorandum pads, diaries and similar articles, exercise books, blotting pads, binders (looseleaf or 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.

In researching the issues in this case, we discovered two conflicting rulings concerning the classification of coupon holders similar to the one in question. In Headquarters Ruling Letter (HQ) 950048 dated March 2, 1992, Customs classified a "bellows" type coupon holder under subheading 4202.32.1000, HTSUSA. In New York Ruling Letter (NY) dated May 30, 1995, Customs classified a coupon book designed to provide the user with a place to store and organize discount coupons for groceries under subheading 4820.50.0000, HTSUSA.

To determine which ruling correctly classified the coupon holders, we referred to the Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System for guidance. The EN constitute the official interpretation of the nomenclature at the international level. While not legally binding, they do represent the considered views of classification experts of the Harmonized System Committee. It has, therefore, been the practice of the Customs Service to follow, whenever possible, the terms of the EN when interpreting the HTSUSA.

The EN to subheading 4820.30 defines binders as articles for holding loose sheets, magazines, or the like (e.g., clip binders, spring binders, screw binders, ring binders), and folders, file covers, files and portfolios. The EN also provide examples of what constitutes albums for samples or for collections under subheading 4820.50, i.e., stamps and photographs.

The EN for heading 4202 state that the expression "similar containers" in the second part of the heading includes "note-cases, writing-cases, pen-cases, ticket-cases, needle-cases, key-cases, cigar-cases, pipe-cases, tool and jewellery rolls, shoe-cases, brush-cases, etc." Additionally, the EN for subheadings 4202.31, 4202.32 and 4202.39 state that those subheadings "cover articles of a kind normally carried in the pocket or in the handbag and include spectacle cases, note-cases (bill-folds), wallets, purses, key-cases, cigarette-cases, cigar-cases, pipe-cases and tobacco-pouches."

A coupon holder is used to organize and store discount coupons for grocery store items and, like a wallet or bill-fold, is commonly carried in the pocket or handbag so that it is available when making purchases at the grocery store. Thus, the holding set for in HQ 950048, classifying the coupon holder under heading 4202, is correct.

At the subheading level, we do not agree with your proposed classification in subheading 4202.39. At the six-digit level, the nomenclature classifies the majority of goods in Chapter 42 by the material which comprises the "outer surface." HQ 954021, dated November 1, 1993, citing HQ 087760, dated October 31, 1991, and HQ 087640, dated November 8, 1990. The term "outer surface of" is not defined in Chapter 42, nor anywhere else in the HTSUSA. In HQ 086775, dated July 9, 1990, Customs stated that the outer surface "is that which is both visible and tactile." See 954021 and the cases cited therein. "Tactile" is defined as follows: "1. Perceptible to the touch: TANGIBLE." "Tangible" is defined as follows: "1a. Discernible by the touch or capable of being touched." Webster's II New Riverside University Dictionary, (1984) at 1178 and 1182, respectively.

Moreover, for purposes of heading 4202, Customs resolved the issue of what is the "outer surface of" articles made with composite materials. See HQ 954021. Specifically, we addressed whether jewelry box frames which were made of plastic or metal and were covered with paper backings to
which textile materials had been applied had an outer surface of textiles or paper. In reaching our conclusion, we said that Additional U.S. Note 2 of Chapter 42 is instructive in understanding the meaning of "outer surface of" when applied to composite materials [not specifically listed in that note]. Additional U.S. Note 2 of Chapter 42 provides:

For purposes of classifying articles under subheadings 4202.12, 4202.22, 4202.32 and 4202.92, articles of textile fabric impregnated, coated, covered or laminated with plastics (whether compact or cellular) shall be regarded as having an outer surface of textile material or of plastic sheeting, depending upon whether and the extent to which the textile constituent or the plastic constituent makes up the exterior surface of the article.

Customs application of this note makes it clear that a composite material that is "of" textile for classification at the heading level may, nonetheless, have an "outer surface of"plastic for classification at the subheading level. HQ 954021, citing HQ 087640, HQ 087755, HQ 087210, dated May 10, 1991. In 954021, counsel argued that the paper covering would be a paper for both heading and subheading level classification [regardless of the external surface]. The argument in HQ 954021 was based on the logic that if the drafters of the Additional U.S. Notes intended that textile and paper combinations be treated in the same way that Additional U.S. Note 2, Chapter 42, treats plastic and textile combinations, they would have so specified. We disagreed with that argument and found that the absence of a note addressing paper and textile composite materials, or other composite materials (i.e., paper and plastic) did not evidence an intent to interpret the term "outer surface" differently when confronted with other component combinations. We held that the composite paper and textile flock material that covered the jewelry box was a paper for heading level classification (4202) but had an "outer surface of" textile material for subheading level classification (4202.92).

In this instance, the coupon file is completely covered with plastic coated paper. Accordingly, based on Additional U.S. Note 2 to Chapter 42, and the rationale set forth in HQ 954021, we find that it is classifiable in subheading 4202.32.1000, HTSUSA, as an article with an outer surface of plastic sheeting material.


The coupon file in question is classifiable in subheading 4202.32.1000, HTSUSA, which provides for articles of a kind normally carried in the pocket or in the handbag, with an outer surface of reinforced or laminated plastics. The Column 1 General duty rate is 12.1 cents per kilogram plus 4.6 percent ad valorem.


John Durant, Director Commercial Rulings

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