CLA-2 RR:CR:TE 966059 ttd
Area Director
U.S. Customs Service
c/o Chief, Liquidation and Protest Branch
Bldg #77, JFK International Airport Jamaica, NY 11430
RE: Decision on Application for Further Review of Protest Number 4701-02-100853; Evening Bag; “In Part of Braid”
Dear Madam:
This is a decision on the application for further review (AFR) of Protest Number 4701-02-100853, timely filed by Coronet Brokers Corp., on behalf of R.P.L. Design Inc. (Protestant), regarding the tariff classification of a ladies’ evening handbag.
FACTS:
The AFR challenges your classification of the evening bags, entered on December 17, 2001, and liquidated on April 19, 2002, under subheading 4202.22.8050, Harmonized Tariff Schedule of the United States Annotated (HTSUSA). The Protestant contends that the subject evening bag is classifiable in subheading 4202.22.4030 as being “in part of braid.” The Protestant contends that Customs classification of the subject evening bag under subheading 4202.22.8050, HTSUSA, is inconsistent with prior rulings issued by the Commissioner of Customs or his designee as to materially identical merchandise.
The article at issue is a ladies evening handbag, identified by the style number J115806. The subject evening bag is composed of rayon satin textile materials. The evening bag has two permanently attached fabric handles and a permanently attached braided cord shoulder strap.
Customs issued a Customs Form (CF) 28, dated August 1, 2002, requesting that the Protestant supply a complete cost breakdown for six styles of handbags, including the one under consideration, style J115806. In response to the CF 28, the Protestant informed Customs that the styles of handbags are purchased as finished products at a unit price and that the Protestant was unable to provide a complete cost breakdown because the Protestant does not have access to information concerning the manufacturer’s profit.
The Protestant contends that the subject evening bag is properly classifiable in subheading 4202.22.4030, HTSUSA, the provision for handbags, whether or not with shoulder strap, including those without handle, with outer surface of textile materials, wholly or in part of braid, of man-made fibers.
ISSUE:
Whether the subject evening bag with a braided shoulder strap in addition to handles is considered to be “in part of braid” under the HTSUSA?
LAW AND ANALYSIS:
Classification of goods 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 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.
It is undisputed that the subject evening bags are classifiable under subheading 4202.22, which encompasses handbags, whether or not with shoulder strap, including those without handle. At the 8-digit level, we must determine whether the evening bags are classifiable as being “in part of braid.” General Note (GN) 22(e), HTSUSA, reads, in pertinent part, as follows:
(e) the terms “wholly”, “in part of” and “containing”, when used between the description of an article and a material (e.g., “woven fabrics, wholly of cotton”), have the following meanings:
“in part of” or “containing” mean that the goods contain a significant quantity of the named material.
Regarding the quantitative concepts specified above, the de minimis rule applies. The de minimis rule states that an ingredient or component of an article may be ignored for classification purposes depending on “whether or not the amount used has really changed or affected the nature of the article and, of course, its salability.” Varsity Watch Company v. United States, 34 CCPA 155, C.A.D. 359 (1947). While Customs has consistently found evening bags having a singular braided shoulder strap to be classifiable as being “in part of braid,” in this case, the evening bag has both a braided shoulder strap and additional carrying handles. Thus, the unresolved issue is whether the presence of the additional carrying handles renders the braided shoulder strap de minimis.
In HQ 089386, dated March 18, 1992, Customs classified certain ladies’ evening bags with braided textile shoulder straps under subheading 4202.22.4030, HTSUSA, as being “in part of braid.” Counsel for the importer stressed the importance and desirability of the particular straps, which were claimed to add to the elegance, utility and salability of the bags. During our review of HQ 089386, we noted that the braided shoulder straps were fully functional and likely to be used to carry each bag over the shoulder, despite their capacity to be folded into the bags so that the bag could be carried clutch-style. Moreover, we found that the amount of braid on the purse was significant when it formed the entire length of the shoulder strap and that the braided straps constituted the most common means to carry the purses. As such, the straps were commercially significant. We considered that the braid itself was a more extravagant way of forming the shoulder strap, that it added to the expense and complexity of manufacture and that the braided straps complemented and highlighted the dressy nature of the bags. We concluded that the braided straps enhanced the utility and style of the bags, making the articles marketable for evening wear. In finding the evening bags with braided shoulder straps to be “in part of braid,” we stated that “[t]he de minimis rule in this case has been satisfied, since a strap on an evening bag is a substantial part of the bag, one which in this instance, affects the nature of the article and distinguishes it for evening or formal wear.” We agreed in that case that the braided strap was a particularly desirable and important feature of the item, and that “for the evening bags under consideration, the braided shoulder straps are visible, important, ‘commercially significant’ components, which add to the elegance, utility, and salability of the bags.”
In HQ 960489, dated October 10, 1997, we affirmed the concept that under certain limited circumstances, a braided shoulder strap might affect an evening bag’s classification as being “in part of braid.” We emphasized that in HQ 089386, certain ladies’ evening bags with a visibly braided shoulder strap, which added to the elegance, utility and salability of the bag, were classified as being “in part of braid.” In HQ 960489, in finding that the handbag was not classified as being “in part of braid,” we considered that the merchandise was not clearly designed for evening or formal wear, that the strap was neither extravagant nor dressy, and that it was difficult to discern whether the strap was of braided construction.
In this situation, like the evening bags in HQ 089386, the braided shoulder strap is fully functional and likely to be used to carry the bag over the shoulder, despite the strap’s capacity to be folded into the bag and the bag’s capacity to be carried by the exterior handle. Consistent with HQ 089386, the amount of braid on the subject evening bag is significant, as it forms the entire length of the shoulder strap. Although we have not determined whether the braided strap at issue is indeed the most commonly used means to carry the subject evening bag, based on prior rulings on evening bags with only a braided strap, the braided strap appears to be commercially significant. Like the evening bags considered in HQ 089386, the braid at issue herein is a more extravagant way of forming the shoulder strap, and adds to the expense and complexity of manufacture. Here, as in HQ 089386, the braided strap complements and highlights the dressy nature of the bag. Accordingly, the braided strap enhances the utility and style of the subject evening bag, making it more marketable for accessorizing evening wear. The strap on the evening bag is a particularly desirable and important feature, that for the evening bag under consideration, is a visible, important, ‘commercially significant’ component, which adds to the elegance, utility, and salability of the bag. As the de minimis rule is satisfied in this case, the subject evening bag is considered to be “in part of braid.”
HOLDING:
The protest is hereby ALLOWED.
The ladies evening handbag, identified as style number J115806 is classified under subheading 4202.22.4030, HTSUSA, which provides 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, insulated food or beverage 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: Handbags, whether or not with shoulder strap, including those without handle: With outer surface of sheeting of plastic or of textile materials: With outer surface of textile materials: Wholly or in part of braid: Other, Other: Of man-made fibers.” The general column one rate of duty at the time of importation was 7.7 percent ad valorem and the textile restraint category was 670.
There are no applicable quota/visa requirements for products of World Trade Organization (WTO) member-countries. The textile category number above applies to merchandise produced in non-WTO member-countries.
The designated textile and apparel category may be subdivided into parts. If so, the 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 the importer 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 updated weekly and is available for inspection at the local Customs office. The Status Report on Current Import Quotas (Restraint Levels) is also available on the Customs Electronic Bulletin Board (CEBB) which can be found on the U.S. Customs Service Website at www.customs.gov.
Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, the importer should contact the local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.
In accordance with Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, section 3 A. (11) (b), you are to mail this decision and the Protest (Customs Form 19) to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with this decision must be accomplished prior to mailing the decision.
The Office of Regulations & Rulings will make this decision available to Customs personnel and to the public on the Customs Service Home Page on the World Wide Web, www.customs.gov, by means of the Freedom of Information Act and by other methods of public distribution sixty days from the date of this decision.
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division