United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 2002 HQ Rulings > HQ 964007 - HQ 964370 > HQ 964263

Previous Ruling Next Ruling
HQ 964263




October 3, 2001

RR:CR:GC 964263 AML

CATEGORY: CLASSIFICATION

TARIFF NO.: 7326.20.0050

Ms. Kerri L. Legg
MGA Entertainment
16730 Shoenborn Street
North Hills, CA 91343-6122

RE: PD F84056 affirmed; “Dragon Ball Z Floating Fighter” Magnetic Keychain

Dear Ms. Legg:

This is in reference to your May 12, 2000, and August 1, 2000, letters, to the Customs National Commodity Specialist Division, New York, requesting reconsideration of Port Decision (PD) F84056, dated March 31, 2000, which classified the “Dragon Z Floating Fighter” magnetic keychain (style # 242413) under subheading 7326.20.0050 of the Harmonized Tariff Schedule of the United States (HTSUS), which provides for other articles of iron or steel wire, other. Your request was forwarded to this office for response. A sample was submitted for our examination. We regret the delay in providing a response.

FACTS:

The subject articles were described in PD F84056 as follows:

The submitted sample is style # 242413 Dragon Ball Z Floating Fighter metal keychain. It consists of a transparent plastic tube sealed at each end with a floating fighter inside. To the top of the plastic tube is attached a split metal key ring.

ISSUE:

Whether the Dragon Ball Z Floating Fighter metal key chain 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 classifiable 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.

The HTSUS provisions under consideration are as follows:

7326 Other articles of iron or steel:
7326.20.00 Articles of iron or steel wire. 9503 Other toys; reduced-size ("scale") models and similar recreational models, working or not; puzzles of all kinds; parts and accessories thereof: 9503.90.00 Other.

The term "toy" is not defined in the HTSUS. However, 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. Customs believes the ENs should always be consulted. See, T.D. 89-90, 54 FR 35127, 35128 (August 23, 1989).

The ENs to Chapter 95, HTSUS, state, in pertinent part, that "[t]his Chapter covers toys of all kinds whether designed for the amusement of children or adults." Although not set forth as a definition of "toys," we have interpreted the just-quoted passage from the ENs as defining "toys" as articles "designed for the amusement of children or adults," although we believe such design must be corroborated by evidence of the articles’ principal use.

When the classification of an article is determined with reference to its principal use, Additional U.S. Rule of Interpretation 1(a), HTSUS, provides that, in the absence of special language or context which otherwise requires, such use is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use. In other words, the article's principal use at the time of importation determines whether it is classifiable within a particular class or kind.

While Additional U.S. Rule of Interpretation 1(a), HTSUS, provides general criteria for discerning the principal use of an article, it does not provide specific criteria for individual tariff provisions. However, the U.S. Court of International Trade has provided factors, which are indicative but not conclusive, to apply when determining whether merchandise falls within a particular class or kind. They include: general physical characteristics, the expectation of the ultimate purchaser, channels of trade, environment of sale (accompanying accessories, manner of advertisement and display), use in the same manner as merchandise which defines the class, economic practicality of so using the import, and recognition in the trade of this use. United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F. 2d 373 (1976), cert. denied, 429 U.S. 979.

The general physical characteristics of the “Dragon Ball Z Floating Fighter” magnetic keychain indicate that they are used as keychains. They have all the necessary elements of a keychain. Furthermore, the chain and ring are made of strong durable metal. The expectation of the ultimate purchaser and environment of sale also indicates that the articles are principally used as keychains. While “Dragon Ball Zs” do have elements that are amusing, we are of the opinion that, based upon the factors discussed above, that they are not principally designed to amuse, but rather to hold keys or attach to a backpack. As such, they do not fall within the scope of the tariff term “toy”.

No one heading of the HTSUS specifically provides for the “Dragon Ball Z” as a whole. The plastic tube components and figures are described by heading 9503, HTSUS. The ring and chain components are described by heading 7326, HTSUS, as an article of iron or steel. As no one heading describes the articles as a whole, the “Dragon Ball Zs” are considered composite goods consisting of both toy and metal components. As such, they cannot be classified according to GRI 1.

GRI 2(b) provides, in pertinent part, that the classification of goods consisting of more than one material or substance shall be according to the principles of GRI 3.

GRI 3(a) provides, in pertinent part, that 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 key chain is a composite good, we must apply GRI 3(b), which provides that composite goods are to be classified according to the component that gives the good its essential character.

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 “floating” plastic figures contained in transparent tubes 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 “floating” plastic figures contained in the transparent plastic tubes because those components comprise 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 keychain has both a functional and non-functional component it is the functional component that provides the article’s essential character. See Headquarters Ruling Letter (HQ) 950636, dated January 16, 1992. Further, in HQ 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, HQs 961531 and 961965, both dated September 23, 1998; HQ 959473 dated April 8, 1997, HQ 958452 dated July 3, 1996, and proposed HQs 965101 and 965102 (and the rulings cited therein), published on September 19, 2001, in Vol. 35, No. 38 of the Customs Bulletin.

Concerning the subject articles, it is the ring/chain component that comprises the utilitarian portion of the article. The “floating” plastic figures contained in transparent tubes are primarily placed at the end of the key chain for decorative purposes. Moreover, we believe that all of the articles will be used predominantly to hold keys or attach to a backpack. We recognize that these articles are purveyed to the public in toy stores. However, they are marketed, displayed and referred to as keychains. Finally, we note that the modest manipulative play value of the toy component does not outweigh the functional role of the keychain. We therefore find that it is the metal key ring component that imparts the essential character of the article. As such it is classifiable under subheading 7326.20.0050, HTSUS, which provides for other articles of iron or steel: articles of iron or steel wire: other.

HOLDING:

The “Dragon Ball Z Floating Fighter Metal Keychain (Style # 242413)” is classifiable under subheading 7326.20.0050, HTSUS, which provides for other articles of iron or steel: articles of iron or steel wire: other.

EFFECT ON OTHER RULINGS:

PD F84056 is hereby AFFIRMED.

Sincerely,
John Durant, Director
Commercial Rulings Division


Previous Ruling Next Ruling

See also: