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HQ 087026


July 24, 1990

CLA-2 CO:R:C:G 087026 DRR

CATEGORY: CLASSIFICATION

TARIFF NO.: 4202.32.200

Ms. Mona Webster
Target Stores
33 South Sixth Street
P.O. Box 1392
Minneapolis, Minnesota 55440-1392

RE: Classification of pencil pouch and contents

Dear Ms. Webster:

This is in response to your letter dated March 20, 1990, requesting the classification of a pencil pouch, pencil, eraser, and ruler under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).

FACTS:

The merchandise at issue, style s250008/4, consists of a 4 3/4 inches by 8 1/2 inches polyvinyl chloride pencil pouch with a zipper closure, that will be imported containing a wood cased pencil, a plastic ruler and a rubber eraser. The pencil is a product of Taiwan, the other items are products of Hong Kong. The items will be packaged together for retail sale. The price breakdown of the articles is: pencil case $.25, pencil $.09, eraser $.10, ruler $.04, for a total of $.48.

ISSUE:

Are the items classifiable as a set, or must they be classified separately?

LAW AND ANALYSIS:

Classification under the HTSUSA is in accordance with 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 and chapter notes.

In light of the fact that the school set is made up of different elements, a pencil pouch, a pencil, eraser and ruler, individually provided for, it cannot be classified on the basis of GRI 1 alone. However, goods which are prima facie classifiable under two or more headings are classified in accordance with the provisions of GRI 3. When, as in the instant case, those headings each refer to only part of the materials contained in sets, they are treated as equally specific and classified pursuant to GRI 3(b).

The Explanatory Notes to the HTSUSA may be consulted for guidance as to the correct international interpretation of the various HTSUSA provisions. The Explanatory Notes for GRI 3(b) state that the goods put up in sets for retail sale are those which consist of at least two different articles which are classifiable in different headings; consist of products or articles put up together to meet a particular need or carry out a specific activity; and are put up in a manner suitable for sale directly to users without repacking.

Containers or holders such as the pouch at issue raise a question as to the relevance of the container or holder to the set. If the holder, when considered together with the other articles does not meet a particular need or carry out a specific activity in relation to those items, it is regarded as a disparate article and may thereby cause the set to fail. A strict interpretation of the criteria under paragraph (X)(b) of the Explanatory Notes pertaining to sets would in effect nullify the utilization of GRI 3(b) in most instances where the components of a set are imported in a container or holder. Such goods would therefore be classified individually under the appropriate headings of the tariff schedule.

We are of the opinion that the classification of goods under GRI 3(b) is intended to include sets whether or not they are imported in containers. We find support for our position in the Explanatory Notes to Rule 3(b), paragraph (X)(3), which presents an example in the form of a drawing kit contained in a pouch, classifiable as a set for the purposes of GRI 3(b), thereby indicating that the presence of a carrying case or pouch does not cause the goods to fail to qualify as a set.

In the instant case, the pouch is intended to be used with
its contents to carry out a specific activity, i.e., writing, or perhaps, for younger children, drawing. The pouch serves a particular need to the extent that it is used to store and carry the other items so that they will be readily available when needed. The pouch and its contents are therefore a set for purposes of GRI 3. The pouch is outside the scope of GRI 5 because it is not specially shaped or fitted for the contents and is intended for long-term or repetitive use.

Having determined that the items are a set, we must next determine the essential character in order to classify the item under GRI 3(b). According to GRI 3(b), goods put up in sets for retail sale, shall be classified as if they consisted of the material or component which gives them their essential character. The Explanatory Notes state that "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. The pouch clearly predominates over the other items by weight, size and value, and therefore provides the essential character.

HOLDING:

The pouch, pencil, eraser and ruler are classified as a set under subheading 4202.32.2000, HTSUSA, as other articles of a kind normally carried in the pocket or handbag with an outer surface of plastic sheeting, with a duty rate of 20 percent ad valorem.

The designated textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest that you check, close to the time of shipment, the Status Report On Current Import Quotas (Restraint Levels), an internal issuance of the U.S. Customs Service, which is available for inspection at your local Customs office.

Due to the changeable nature of the statistical annotation
and the restraint (quota/visa) categories applicable to textile merchandise, you should contact your local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.

Please be advised that country of origin marking regulations require that items of foreign origin be conspicuously marked with the country of origin in a manner that is permanent, legible, indelible and written in English.

Your sample is being returned to you, as requested.

Sincerely,

John Durant, Director

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