HQ 951218

July 28, 1992

CLA-2 CO:R:C:T 951218 JED

CATEGORY: Classification

TARIFF NO.: 4820.10.4000

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.\"

-2-

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,

-3-

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

-4-

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.

-5-

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