CLA-2 RR:CR:TE 965039 JFS
John S. Rode, Esq.
Rode & Qualey
295 Madison Avenue
New York, NY 10017
RE: Revocation of NY G87998 and NY G89102; Insulated Shopping Bags; Prolonged Use; Not Heading 4202
Dear Mr. Rode:
This letter is to inform you that Customs has reconsidered New York Ruling Letter (NY) G87998 dated March 15, 2001, and NY G89102 dated April 20, 2001, issued to you on behalf of your client, KeepCool USA Company (“KeepCool”), concerning the classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), of insulated shopping bags. After review of the two rulings, it has been determined that the classification of the insulated shopping bags in subheading 4202.92.4500, HTSUSA, was incorrect. For the reasons that follow, this ruling revokes NY G87998 and NY G89102.
Pursuant to 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. 103-82, 107 Stat. 2057, 2186), notice of the proposed revocation of NY G87998 and NY G89102 was published on February 20, 2002, in the Customs Bulletin, Volume 36, Number 8. As explained in the notice, the period within which to submit comments on this proposal was until March 22, 2002. No comments were received in response to this notice.
FACTS:
The articles considered in NY G87998 and NY G89102 are insulated shopping bags. Three samples of the bags were submitted with the request for reconsideration. The bags are constructed of two layers of unbacked, unsupported and unreinforced sheetings of plastics sandwiching a thin layer of cellular plastics.
KeepCool Model #45vfbi, has side panels which measure approximately 18 inches wide by 19 inches tall. The end panels are gussetted, taper from approximately 7 inches at the top to 8 inches wide at the bottom, and are 18 inches tall. The bottom of the bag has an insert and is 8 inches wide and 18 inches long. The request for reconsideration states that the bag has a nominal interior volume of 12 gallons or 45 liters and is capable of holding up to forty-five pounds of food. The bag is FDA approved for food contact. On the exterior of the bag is the “Sam’s Club” logo. The printing on the exterior of the bag states that the bag (1) is reusable; (2) is triple-insulated to keep frozen food purchases frozen for over 2.5 hours; (3) can be used to protect groceries and keep drinks cold: (4) will keep your food frozen all the way home; and (5) is great for picnics, trips to the beach or to the ball game.
KeepCool Model #34vfbi is nearly identical in design to Model #45vfbi except it is smaller, having an interior volume of 9 gallons or 34 liters and being designed to hold 35 pounds. The bag has various logos from food manufacturers such as “Stouffer’s®,” “Tyson®,” and “Cool Whip®.” lettering on the exterior of the bag states that the bag will keep frozen food frozen for over two hours and that the bag is reusable.
KeepCool Model #18vsb is a flat bag with a volume of five gallons and a load carrying rating of 25 pounds. This bag does not have side gussets or an insert for the bottom. It has a straight bottom and molded snap handles that are heat sealed to the bag. The lettering on the exterior of the bag states that it will keep products frozen for two hours in standard conditions of use. It further states that it can be used for groceries such as meat, fish, veggies and even drinks. It promotes using the bag for picnics, the beach or the ball game.
The request for reconsideration states that:
All three of the bags are constructed from three layers of plastic sheeting, plus molded plastic handles. The inner layer is made from 2.56 mil polyethylene sheeting, the middle layer is an insulating layer of 0.8 mm closed-cell polyethylene foam, and the outer layer consists of metalized 0.47 mil polyester film glued to a 1.77 mil thick polyethylene film.
The Customs Laboratory reached similar results. It determined that the inner layer is constructed of 2.559 mil of polyethylene. The middle layer is constructed of 17.126 mil of foam polyethylene. The outer layer is constructed of 2.087 mil of metalized polyethylene and .256 mil of polyester.
ISSUE:
Whether the insulated shopping bags are not designed for prolonged use and are therefore excluded from classification in heading 4202, HTSUSA.
LAW AND ANALYSIS:
Classification under the HTSUSA is made in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that the classification of goods shall be determined 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 GRI may then be applied.
The Harmonized Commodity Description and Coding System, Explanatory Notes (EN), represent the official interpretation of the Harmonized System at the international level (for the 4 digit headings and the 6 digit subheadings) and facilitate classification under the HTSUSA by offering guidance in understanding the scope of the headings and GRI. The EN, although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUS, and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
Heading 4202, HTSUSA, provides for, among other articles, shopping bags wholly or mainly covered with plastic sheeting. Subheading 4202.92.45, HTSUSA, provides for travel, sports and similar bags, with an outer surface of plastic sheeting or textile materials. Additional U.S. Note 1 to Chapter 42, states that "the expression “travel, sports and similar bags” means goods... of a kind designed for carrying clothing and other personal effects during travel, including... shopping bags...." Chapter Note 2(A)(a) to Chapter 42, HTSUSA, states that heading 4202, HTSUSA, does not cover "Bags made of sheeting of plastics, whether or not printed, with handles, not designed for prolonged use (heading 3923)."
The EN to heading 4202, HTSUSA, as amended in 2002, provides guidance as to what type of bags are covered by the exclusion above. At its 26th session in November 2000, the Customs Cooperation Counsel's Harmonized System Committee (HSC), approved the following new text for the EN to heading 4202.:
This heading does not cover:
(a) Shopping bags, including bags consisting of two outer layers of plastics sandwiching an inner layer of cellular plastics, not designed for prolonged use, as described in Note 2(A)(a) to this Chapter (heading 39.23).
Under the decision of the HSC, insulated shopping bags almost identical to the ones under consideration, assuming they are not designed for prolonged use, are excluded from classification in heading 4202, HTSUSA.
As stated previously, the EN's are relevant as guidelines in determining the scope of a heading. Both Congress and Customs have endorsed use of the EN’s in the classification of merchandise. In T.D. 89-80, Customs set forth that EN's, along with decisions of the HSC that are published in the Compendium of Classification Opinions, are to be accorded appropriate weight in making classification determinations and that they (EN's) should always be consulted. Further, both Congress, in the report of the Joint Committee on the Omnibus Trade and Competitiveness Act of 1988, and Customs, in the T.D., have acknowledged that the EN's will be modified from time to time. That being the case, it is clear that Congress anticipated that EN's would be amended periodically, and that Customs, in such instances, would appropriately consider EN's in their amended form.
The EN clearly describes the bags under consideration, that is, if they are “not designed for prolonged use.” Thus, although the bags appear to be excluded by Chapter Note 2(A)(a), it is necessary to determine if the bags are designed for prolonged use.
In Headquarters Ruling Letter (HQ) 088254, dated March 27, 1991, Customs classified a similar insulated shopping bag, described as "Sac Isotherme", under subheading 4202.92.4500, HTSUSA. The "Sac Isotherme" consisted of an outer surface of metalized polyester plastic sheeting material, a thin foam interlining, and a polyvinyl inner lining. It measured approximately 20 inches by 13 inches by 6 inches, had a sturdy plastic handle, and was similar to a standard rectangular shopping bag. The "Sac Isotherme" was designed to transport fresh or frozen food from the place of purchase to the home. Customs ruled that the "Sac Isotherme" was of durable construction, designed for prolonged use, and therefore not precluded from classification in heading 4202, HTSUSA, by virtue of Chapter Note 2(A)(a) to Chapter 42, HTSUSA.
In HQ 953077, dated April 26, 1993, Customs classified another shopping bag under heading 3923, HTSUSA. That bag was made of plastic sheeting coated on the inside with vaporized aluminum and on the exterior with a thin polyethylene coating. The bag contained no insulation, but had some temperature retaining capability due to the reflectivity of the metallization. The bag was designed for transporting food from the place of purchase to the home and was given to purchasers at retail to carry purchases home and to be subsequently reused by the purchaser. However, tests concerning durability indicated that continued usage of the bag was unlikely and that the bag might only last through several uses. Accordingly, Customs ruled that the bag was flimsily constructed, not manufactured for continued durable use and that such bags were classifiable in heading 3923, HTSUSA.
In HQ 962033, dated November 29, 1999, Customs classified a shopping bag identified as "Bolsa Isotermica" which was constructed of three layers of plastics. The inner layer was a sheeting of polyethylene. The middle layer was an insulating layer of foamed polyethylene. The outer layer was a double layer consisting of metalized polyester and polyethylene. The description included with the ruling request stated that the thermal properties of the bag are guaranteed for between 50 and 100 uses. In considering this bag, Customs reviewed its prior decisions on insulated shopping bags and concluded that:
it appears that Customs has classified insulated shopping bags in heading 3923, HTSUSA, when made of flimsy materials such as polyethylene, not capable of prolonged use, containing no middle insulating material, and designed to be given away to the consumer. In contrast, insulated shopping bags of more durable construction, containing a middle insulating layer, and of a type sold empty at retail, are classified in heading 4202, HTSUSA.
In classifying the bag in heading 4202, HTSUSA, Customs relied upon the fact that the bag was of durable construction, was not given away as a premium but purchased empty by consumers, and was intended for repeated use, between 50 to 100 uses or for 1-1/2 to 2 years.
The construction of the instant bags is not as substantial as the bag described in HQ 962033. It is given away as a promotional item as evidenced by the brand specific advertising. However it is also sold empty at retail as evidenced by the claims that it will keep food frozen for two hours and is great for picnics and a ball game. Although reusable, it is not designed to be used 50 to 100 times, or to last for 1-1/2 to 2 years. While the bags do have an insulating layer, the layer is merely sandwiched between the inner and outer layers of plastics. It is not incorporated into the construction of the bag in a manner that provides durability to the bag. The insulating layer merely operates to improve the insulating function of the bag. It does not extend the life of the bag.
The bags under consideration are certainly reuseable, but to a very limited extent. Because they also are of a kind that is explicitly described in the EN to heading 4202, HTSUSA, as being excluded from the heading, they must be considered to be “not designed for prolonged use.” The bags are classified in subheading 3923.21.00, HTSUSA, as: “Articles for the conveyance or for packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics: Sacks and bags (including cones): Of polymers of ethylene, Other.”
HOLDING:
NY G87998 and NY G89102 are hereby revoked. The Keep Cool bags, styles 45vfbi, 34vfbi, and 18vsb, are classified under subheading 3923.21.00, HTSUSA, which provides for: “Articles for the conveyance or for packing of goods, of plastics; stoppers, lids, caps and other closures, of plastics: Sacks and bags (including cones): Of polymers of ethylene, Other.” The general column one rate of duty is 3% ad valorem.
EFFECT ON OTHER RULINGS:
NY G87998 dated March 15, 2001, and NY G89102 dated April 20, 2001, are hereby REVOKED. In accordance with 19 U.S.C. §1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
John Durant, Director
Commercial Rulings Division