CLA-2 CO:R:C:G 085996 STB
Mr. Stephen M. Zelman
Attorney at Law
271 Madison Avenue
New York, N.Y. 10016
RE: Evening handbags
Dear Mr. Zelman:
This is in response to your inquiry of November 10, 1989,
regarding classification of four styles of evening handbags under
the Harmonized Tariff Schedule of the United States Annotated
(HTSUSA). Your request concerns prospective transactions by
members of the Fashion Accessories Shippers Association, Inc.,
intending to import handbags from China, Hong Kong, and Macau.
In addition to the four samples you submitted for classification,
you also submitted other samples which were referenced in various
affidavits submitted to support your position on classification
of the four handbags.
FACTS:
Sample 6070A is a black, relatively smaller type evening
bag, with a rounded bottom and top. It measures approximately
7.5 inches in length at its longest point, 5.75 inches in height
at its highest point, and approximately 2 inches in breadth at
its widest point. It contains a shell of woven man-made fiber, a
lining of man-made fiber, foam between the shell and lining, and
a zipper closure. The bag is adorned with a textile ribbon with
ten tiny glass pieces, cut into diamond shapes, in the center of
the ribbon. A braided handle, approximately 43 inches in length,
is attached.
Sample 24551 is a reddish-pink, relatively smaller type
evening bag with a flat top and very slightly rounded bottom .
It measures approximately 6.5 inches long, 4.5 inches
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high and 2 inches in breadth. It contains a woven man-made fiber
shell and lining, foam between the shell and lining, and a flap
secured by a snap closure. It possesses a braided handle
measuring approximately 41 inches in length and braided trim
along the edge of the flap measuring approximately 14 inches.
There is a textile tassel at the lowest point of the flap.
Sample 242 is a primarily beige evening bag, with a flat
top and bottom. It measures approximately 10.75 inches in
length, 6.5 inches in height, and one inch in breadth. It
contains a man-made fiber shell and lining and a flap closure
enclosing a cardboard stiffener secured by a snap. Glass beads
cover approximately 40% of the surface area. There is a braided
handle approximately 47.5 inches in length.
Sample 248 is gold in color with a straight top and bottom.
It measures approximately 9.5 inches in length, 5.5 inches in
height and 2 inches in breadth at its widest point. It
contains a man-made fiber shell and lining which enclose a
cardboard stiffener and has a flap closure secured by a snap.
Glass beads, white in color, are sewn in three diamond shaped
patterns on the flap. Glass beads, gold in color, cover
approximately 80% of the exterior surface. A braided handle,
approximately 45.5 inches in length, is attached.
ISSUES:
Whether or not styles 6070A and 24551 should be classified
under HTSUSA as being "Wholly or in part of braid."
Whether the essential character of styles 242 and 248 is
imparted by textile or the glass bead work.
LAW AND ANALYSIS:
Classification of products under the HTSUSA 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 relevant section or chapter notes.
Before reaching the "braid question", a determination must
be made concerning the broader classification category of styles
6070A and 24551. Heading 4202 provides for handbags of textile
materials or handbags wholly or mainly covered with such
materials. Subheading 4202.22, HTSUSA, provides for "Handbags,
whether or not with shoulder strap, including those without
handle: With outer surface of plastic sheeting or of textile
materials". Sample 24551 possesses a wholly textile exterior.
The exterior of sample 6070A is entirely textile, with the
exception of the ten tiny glass beads adorning the textile
ribbon. It is clear, therefore, that the instant samples are
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properly classifiable in subheading 4202.22, HTSUSA.
Subheading 4202.22.40, HTSUSA, provides for handbags which
have an outer surface of textile materials wholly or in part of
braid. Since samples 24551 and 6070A are not wholly of braid,
the determination must be made as to whether they are "in part of
braid". For the reasons discussed below, we find that the
instant samples are not "in part of braid", and that the
appropriate subheading is 4202.22.80, HTSUSA.
General Note 7(e)(ii) provides that "in part of", when used
between the description of an article and a material, means that
"the goods contain a significant quantity of the named material".
General Note 7(e) further provides that the de minimis rule
applies to this principle. Inasmuch as General Headnote 9(f) of
the Tariff Schedules of the United States Annotated (TSUSA) sets
forth a definition of "in part of" which is identical to that
contained in the HTSUSA and also provides for application of the
de minimis rule, we refer to the court decisions and
administrative rulings which interpret this phrase and rule under
the TSUSA.
The tests utilized to determine whether an ingredient or
component is "in part of" an article for tariff classification
purposes have been well established by a number of prior court
decisions and Customs Decisions and Rulings. These tests have
been thoroughly examined and developed in prior Headquarters'
Ruling Letters. See HRL 081483 dated April 27, 1989. The basic
aim of these tests is to determine whether, in a particular case,
an ingredient or component of an article may be ignored for
classification purposes because the ingredient or component is
not present in a "significant" quantity.
In Cavalier Shipping Co. v. United States, 67 Cust. Ct. 440,
444, C.D. 4317 (1971), aff'd, 60 CCPA 152, C.A.D. 1103 (1973),
the court held that an ingredient is "in part of" an article if
quantitatively insignificant amounts of it are present in a
sufficient quantity so as "to perform a part in the primary
function of the article." 60 CCPA at 156. In Aceto Chemical Co.
v. United States, 75 Cust. Ct. 167, C.D. 4625 (1975), aff'd, 64
CCPA 78, C.A.D. 1186 (1977), the Customs Court interpreted the
phrase "a part in the primary function of the article" to mean
that the ingredient in question must play a role which is the
primary function of the article rather than a role which is just
related to the primary function. The court opined that a
quantitatively minute amount of an ingredient should control
classification only in the most limited circumstances.
Although this test has never been refuted or overturned,
several factors have been recognized in other cases which may be
utilized to aid in the determination of whether an ingredient or
component is "in part of" an article. These factors include the
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commercial utility/purpose of the component, the effect on
salability, consumer preference, and the relevant trade's
recognition of the importance of the use of the ingredient or
component. Our decision of April 27, 1989, supra.
The braid that is present on the handbags in question does
not satisfy the rather strict test formulated in Cavalier and
Aceto. The amount of braid present in the handles, and in the
trim of sample 24551, is a very small percentage of the overall
material of the handbag. The primary function of the handbag, to
carry items, can be accomplished without the use of the shoulder
strap at all, and certainly can be accomplished with the use of a
shoulder strap other than the braided type. The fact that there
are several alternatives to the braided handle, some of which are
preferred by some consumers over braid, further demonstrates that
the braid is not essential to the primary function of the
handbag.
Failing that important test, it must be shown that somehow
the factors developed in other cases are present to the extent
that the subject handbags may be found to be "in part of" braid.
In your Request for Binding Tariff Classification Ruling, the
alleged advantages of braided handles are discussed. The primary
focus of the argument is that the advantages of the braided
handle increases the salability of the handbags that possess such
a handle, and demonstrates the "commercial significance" and
"commercial utility" of the braid. Therefore, you contend, the
handbags must be classifiable as "in part of braid." In
discussing the braided handles, you state that:
Its look comports with the look of the bag itself.
In keeping with the bag, it is light, has a rich texture,
and takes dye properly so that it will be of the same color
and hue as the material of the handbag. It is soft and
pliable, giving it a warm, comfortable texture to the user.
Because of its pliability, it will not crease, which would
detract from its appearance. Braided handles increase the
versatility of the evening bag. Because it is pliable and
can also be folded into a relatively small volume, it is
often placed inside the bag when the bag is used, allowing
the bag to be used not only as a shoulder strap bag but also
as a "clutch" and to be held in the hand. Request for
Binding Tariff Classification Ruling on Behalf of the
Fashion Accessories Shippers Association, Inc. Regarding
Various Styles of Evening Handbags, November 10, 1989, p.15.
Mr. Lester Sebold, president of Magid Handbags Ltd. states that
"The braided handle gives the bags the necessary elegant look."
Affidavit of Mr. Lester Sebold (October 9, 1989), p.1.
Examination of the samples submitted, however, does not
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support the contention of obvious superiority of the braided
handles. This is particularly evident when the comparison is
made with the so-called "self" handles. The "self" handles are
so named because they are constructed from the same material as
the bag to which they are attached. It is thus axiomatic, and
obvious from examination, that they match the bag perfectly and
do not have to be dyed to do so. The "self" handles are also
quite elegant in appearance and are lightweight. These handles
fold up nicely and occupy a minimum amount of space in the
handbag. They appear quite graceful.
It is also argued that "self" handles "are relatively
difficult to produce because the edges of the fabric must be
turned inside and sewn down to prevent fraying at the edges.
Because of this and the narrow width of the handles, there are
quality control problems not experienced in the production of
braided handles -- we encounter uneven stitching and puckering."
Sebold Affidavit, at p.1.
Examination of the samples submitted does not reveal any
extensive fraying or creasing, including the bags that were
shipped with the "self" handles folded up inside the bags. What
little creasing may be present in some of the "self" handles
does not significantly detract from the appearance of the bags.
Any uneven stitching or puckering in the small stitches utilized
in the handles, if present, would not be readily apparent to the
typical consumer and thus would not decrease salability. You
did not provide any evidence concerning the steps necessary to
produce braided handles, although, as discussed herein, braided
handles must be dyed, a step that is not necessary when "self"
handles are utilized. Assuming arguendo that braided handles are
easier to produce than "self" handles, it is noted that "ease of
production" of a component or ingredient is not listed as an
important factor in the prior rulings and decisions.
Thus, it seems that the advantages of braided handles, as
would be perceived by consumers, are not very obvious if they
exist at all. The evidence that is provided to demonstrate that
handbags with braided handles have indeed demonstrated superior
salability is not convincing. It is also important to remember
that having the effect of increasing salability, does not,
alone, necessarily validate the classification of a component or
ingredient as being "in part of" the primary article. See
United States v. Cavalier Shipping Co., Inc., 60 CCPA 152, 157,
C.A.D. 1103, 478 F.2d 1256,1260 (1973), where the Court of
Customs and Patent Appeals stated in the context of classifying
chemical mixtures that "we cannot reconcile the expressed
intention with respect to the meaning of "in part" in the TSUS
with the restricted concept that any purposeful addition of a
benzenoid product, be it to preserve life or to enhance
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salability, must render the article "in part" of that product",
quoted in Bantam Travel Wear v. United States, Slip Op. 87-22
(decision on summary judgement motion, Ct. Int'l Trade, decided
February 27, 1987) and Slip Op.87-131 (decision subsequent to
litigation) (1987).
The argument is made that the "appearance of these items
and their ability to fit in with apparel styling trends" is the
primary function of the bags rather than the utilitarian use of
carrying objects. Affidavit of Stuart Plotkin (October 25,
1989), at p.1. If an argument is made under this theory, the
Cavalier and Aceto tests again must be examined, to explore the
importance of the braid in this alternative primary function.
As discussed previously, the handbags do not seem to suffer any
appearance degradation when shoulder straps of alternative
construction are utilized; Once again, the Cavalier and Aceto
tests are not satisfied. Moreover, it is Customs position that
appearance is only a secondary function of these handbags.
The second issue is whether the essential character of
styles 242 and 248 is imparted by textile or the glass bead work.
GRI 1 provides that classification shall be determined according
to the terms of the headings and any relevant section or chapter
notes. GRI 2(b), HTSUSA, provides in part that "[t]he
classification of goods consisting of more than one material or
substance shall be according to the principles of Rule 3".
Evening bags having an outer surface of textile materials
are classifiable under heading 4202, HTSUSA, while evening bags
having an outer surface of glass beads are classifiable under
heading 7018, HTSUSA. When goods are prima facie classifiable
under two or more headings or subheadings in the HTSUSA,
classification must be determined based on the sequential
application of the principles set out in GRI 3, HTSUSA, which
reads in pertinent part as follows:
3. When, by application of Rule 2(b) or for any other
reason, goods are prima facie classifiable under
two or more headings, classification shall be
effected as follows:
(a) The heading which provides the most specific
description shall be preferred to headings
providing a more general description.
However, 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
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complete or precise description of the goods.
(b) Mixtures, composite goods consisting of
different materials or made up of different
components, and goods put up in sets for
retail sale which cannot be classified by
reference to 3(a), shall be classified as if
they consisted of the material or component
which gives them their essential character,
insofar as this criterion is applicable.
Inasmuch as the outer surfaces of the evening bags consist
of textile material and plastic beads, it is necessary to
determine that material which imparts the essential character to
the outer surface pursuant to GRI 3(b), HTSUSA, supra.
The Explanatory Notes for GRI 3(b), HTSUSA, state in
pertinent part as follows:
VIII 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,
its bulk, quantity, weight or value, or by the role
of a constituent material in relation to the use of
the goods.
It is noted that the outer surface of style 248 is
predominantly glass beads. Indeed, the visible portion of the
handbag as it would normally appear in public, with the flap
snapped, is 90% covered with glass beads. The outer surface of
style 242, however, is predominantly textile. It remains
Customs position that physical measurement of the component
materials of the outer surface is very important in arriving at
the determination of essential character.
The essential character of style 248 is imparted by the
glass beads. Style 248 is therefore classifiable under
subheading 7018.90.50, HTSUSA, as an article of glass beads.
The essential character of style 242 is imparted by the
textile which provides an important contribution to the
appearance of the handbag. The textile covers approximately 70%
of the outer surface and is only decorated by the glass beads.
The Explanatory Notes for heading 7018, HTSUSA, contain an
exclusion for "Handbags and similar articles of leather or
fabric, decorated with glass beads, imitation pearls or imitation
precious or semi-precious stones (heading 42.02)." It is clear
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that this handbag is properly classifiable under heading 4202,
HTSUSA.
HOLDING:
The evening bags designated as styles 24551, 6070A and
242, are classifiable under subheading 4202.22.8050, HTSUSA,
which provides for handbags, whether or not with shoulder strap,
including those without handle: with outer surface of textile
materials: of man-made fibers, textile category 670, and
dutiable at the rate of 20 percent ad valorem.
The evening bag designated as style 248 is classifiable
under subheading 7018.90.50, HTSUSA, as "Glass beads, imitation
pearls...and similar glass smallwares and articles
thereof...Other" and is dutiable at a rate of 6.6 percent ad
valorem. If this evening bag is the product of Macau, it would
be entitled to free entry under the Generalized System of
Preferences, if otherwise qualified.
Styles 242 and 248 are determined not to be "in part of"
braid for the same reasons discussed in the analysis of Styles
24551 and 6070A.
Sincerely,
John Durant, Director
Commercial Rulings Division