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HQ 958475




May 9, 1996

CLA-2 RR:TC:TE 958475 NLP

CATEGORY: CLASSIFICATION

TARIFF NO: 4202.31.6000

Mr. Kenneth G. Weigel
Ms. Nancy Kao
Kirkland & Ellis
655 Fifteenth Street, N.W.
Washington, D.C. 20005

RE: Reconsideration of NYRL 813767; wallet made of leather and cotton fabric; heading 4202; GRI 3(b); HRLs 081373 (10/17/88) and 952831(2/24/93)

Dear Mr. Weigel and Ms. Kao:

On August 29, 1995, Customs issued to your client, Humphreys Inc., New York Ruling Letter (NYRL) 813767, which classified a wallet in subheading 4202.32.4000, Harmonized Tariff Schedule of the United States (HTSUS). In a letter to Customs Headquarters, dated September 27, 1995, you requested reconsideration of NYRL 813767. On October 31, 1995, representatives from this office met with you to discuss this issue. Subsequently, you provided Customs with a second submission, dated November 3, 1995. Upon review, we are of the opinion that the classification of the wallets in NYRL 813767 was incorrect and this ruling modifies that classification. Pursuant to section 625, Tariff Act of 1930 (19 U.S.C. 1625), as amended by section 623 of Title VI (Customs Modernization ) of the North American Free Trade Agreement Implementation Act ( Pub. L. No. 103-182, 107 Stat. 2057 (1993)) (hereinafter, section 625), notice of the proposed modification of NYRL 813767 was published April 3, 1996, in the CUSTOMS BULLETIN, Volume 30, Number 14. No comments were received in response to the notice.

FACTS:

The merchandise at issue consists of three styles of wallets. The first wallet, # 5342, is a tri-fold style and measures approximately 3-3/8 inches by 4-1/8 inches when closed and approximately 9-1/4 inches by 4-1/8 inches when opened. The outer surface features 2 large panels of leather and one smaller panel of leather. It also has two panels of cotton fabric that are
sewn in between the leather panels. According to your submission, the outer surface of the wallet consists of approximately 26 square inches (67%) of leather and 13 square inches (33%) of cotton fabric. Our measurements of the outer surface of the wallet are as follows:

MATERIAL TOTAL WIDTH APPROXIMATE SQ. INCH % leather 6-1/4 inches 26 67 cotton 3-3/4 inches 14 33
The weight of the leather material used in the outer surface is approximately 0.06 kg and the weight of the cotton fabric used in the outer surface is 0.02 kg. The value of the outer surface's leather component is approximately 10 times that of the cotton fabric.

The second wallet, style #5343, measures approximately 3-1/8 inches by 4-5/16 inches when closed and approximately 6-1/2 inches and 4-1/4 inches when opened. It features one large rectangular leather panel and one smaller rectangular leather panel. Cotton fabric has been sewn into the gap between these two areas. Based on the measurements you submitted, the outer surface of the wallet is comprised of 17-1/2 square inches (62%) of leather and 10-1/2 square inches (38%) of cotton fabric. Our measurements of the outer surface of the wallet are as follows:

MATERIAL TOTAL WIDTH APPROXIMATE SQ. INCH % leather 3-3/4 inches 15.9
57 cotton 2-1/2 inches 10 43
The weight of the leather material used in the outer surface is approximately 0.05 kg and the weight of the cotton fabric is 0.01 kg. The value of the outer surface's leather component is 14 times as great as the value of the cotton fabric.

The third wallet, style #5344, measures approximately 3-1/2 inches by 4-1/8 inches when closed and approximately 7 inches by 4-1/8 inches when opened. The design of the outer surface is the same style as the above wallet. Based on the measurements you submitted, the outer surface of the wallet consists of approximately 18 square inches ( 62%) of leather and 11 square inches (38%) of cotton fabric. Our measurements of the outer surface of the wallet are as follows:

MATERIAL TOTAL WIDTH APPROXIMATE SQ. INCH % leather 4 inches 16 57 cotton 3 inches 11.25 43

The weight of the leather material used in the outer surface is approximately 0.05 kg and the weight of the cotton fabric is 0.02 kg. The value of the outer surface's leather component is 15 times that of the cotton fabric's value.

NYRL 813767 classified all three styles of wallets in subheading 4202.32.4000, HTSUS, which provides for "Trunks, suitcases, ...; wallets ...: Articles of a kind normally carried in the pocket or in the handbag: With outer surface of sheeting of plastic or of textile materials: With outer surface of textile materials: Of vegetable fibers and not of pile or tufted construction: Of cotton."

It is your position that the outer surfaces of the three wallets are composed predominately of leather and not of textile materials. Therefore, it is the leather that provides the essential character of the outer surface of the wallets and they should be classified in subheading 4202.31.6000, HTSUS, which provides for "Trunks, suitcases, ...;...wallets ...: Articles of a kind normally carried in the pocket or in the handbag: With outer surface of leather, of composition leather or of patent leather: Other."

We note that the style numbers utilized in this ruling are different from those in NYRL 813767. At the time Humphrey's broker requested the tariff classification ruling that resulted in NYRL 813767, the wallets had only been assigned the following temporary style numbers: 95RAMBLK, 95RIZBLU, and 95RAIGRN. The wallets have now been assigned permanent product code numbers and this ruling letter refers to the wallets by these codes and not by the previously assigned style numbers utilized in NYRL 813767.

ISSUE:

Are the subject wallets classifiable in subheading 4202.32.4000, HTSUS, based on their cotton components or in subheading 4202.31.6000, HTSUS, based on their leather components?

LAW AND ANALYSIS:

Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI's). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. Merchandise that cannot be classified in accordance with GRI 1 is to be classified in accordance with subsequent GRI's taken in order.

Heading 4202, HTSUS, is the provision 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, 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.

GRI 3(a) requires that where two or more headings describe the merchandise, the more specific will prevail; or if two or more headings each refer to part only of the materials in the goods, then classification will be by GRI 3(b). GRI 3(b) states that the material or component which imparts the essential character to the goods will determine the classification. The factors which determine essential character of an article 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. In general, essential character has been construed to mean the attribute which strongly marks or serves to distinguish what an article is; that which is indispensable to the structure or condition of an article. See, Harmonized Commodity Description and Coding System Explanatory Note (VIII) to GRI 3.

The outer surfaces of the wallets at issue here are constructed of two components: leather and cotton. Wallets with an outer surface of leather are provided for under subheading 4202.31.6000, HTSUS, whereas those with an outer surface of textile material are covered in subheading 4202.32.4000, HTSUS. Therefore, as the outer surface of the wallets consists of two materials and the above subheadings refer to part only of the materials of the goods, then classification of the wallets is based on the material that imparts the essential character to the outer surface of the wallets pursuant to GRI 3(b).

Headquarters Ruling Letter (HRL) 081373, dated October 17, 1988, dealt with the classification of, inter alia, a woman's wallet and wallet/credit card holders and the issue of what material constituted their outer surface. In deciding this issue, HRL 081373 stated that a determination of essential character of the outer surface of luggage and related products cannot be based solely on a physical measurement of the component materials of the outer surface area. However, this ruling observed that such a measurement is of paramount importance in determining the make-up of the exterior surface. This ruling stated that when viewing luggage and related products, the materials of the outer surfaces produce a visual impact which in many instances leaves little or no doubt as to what material gives the outer surfaces their essential character.

In the instant case, the outer surfaces of the wallets at issue are comprised of leather and cotton fabric in the following percentages by weight : style # 5342- 67% leather and 33% cotton; style # 5343- 57% leather and 43% cotton and style # 5344- 57% leather and 43% cotton. However, as stated above, this is not conclusive of classification of the subject wallets. While a visual examination reveals that the leather predominates on style #5342, we do note that on the two bi-fold styles, there appears, based on a visual examination, to be only slightly more leather than cotton. In determining the essential character of the outer surface of certain products of heading 4202, HTSUS, greater weight has been accorded to the visual quality of these products, however, it is not the only factor we focus on. See, HRL 952831, dated February 24, 1993, wherein we classified a handbag based on GRI 3(c) where the visual impact equally conveyed the impression of narrow textile strips of cotton and strips of PVC and the cost, weight and surface coverage was also comparable.

In the instant case, when all the factors as discussed in the EN to GRI 3(b) are taken into consideration, it is the leather that predominates. For example, the leather predominates by weight, bulk, value and it provides durability to these wallets. Therefore, it is the leather that imparts the essential character to the subject wallets. Thus, style #5342, #5343 and #5344 are classified in subheading 4402.31.6000, HTSUS.

In conclusion, we would like to briefly address two points made in your submission. First, it is our position that the cotton portions of these wallets are more than trim. They are considered part of the outer surface area of the wallets and were considered in determining which component provided the essential character to the outer surface of the wallets. Second, although NYRL 813767 did not specifically state this, the determination that the wallets were "equally of leather and cotton" was not based on a physical measurement, but on a visual inspection of the wallets and the role of the constituent materials. Implicit in this ruling was the conclusion that a determination of the classification could not be made based on GRI 3(b) and, therefore, classification was based on GRI 3(c). Thus, while we disagree with the ultimate holding in NYRL 813767, we do not believe that NYRL 813767 "on its face misstates the facts".

HOLDING:

NYRL 813767 is modified. Wallet styles #5342, #5343 and #5344 are classified in subheading 4202.31.6000, HTSUS, which provides for "Trunks, suitcases, ...;...wallets ...: Articles of a kind normally carried in the pocket or in the handbag: With outer surface of leather, of composition leather or of patent leather: Other." The rate of duty is 8% ad valorem.

In accordance with section 625(c)(1), Tariff Act of 1930 (19 U.S.C. 1625(c)(1)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057), this ruling will become effective 60 days after publication in the CUSTOMS BULLETIN. Publication of rulings or decisions pursuant to section 625 does not constitute a change of practice or position in accordance with section 177.10(c)(1), Customs Regulations (19 CFR 177.10(c)(1)).

Sincerely,

John Durant, Director
Tariff Classification Appeals

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