CLA-2 RR:CR:TE 967129 TMF
Jennifer Chuong, Sourcing Assistant
Newport News, Inc.,
711 Third Avenue, Fourth Floor
New York, NY 10017
RE: Classification of beaded satin clutch handbag
Dear Ms. Chuong:
This is in response to your letter, dated April 14, 2004, in which you requested a binding classification ruling on a ladies handbag under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). Your request, along with a sample, was sent to our office for our reply.
FACTS:
Style F 0405214 is a polyester satin evening clutch bag made in India that is partially decorated with glass beads. It has a braided textile cord loop affixed to one side, which measures 6 inches in length and 1/8 of an inch in diameter. It is designed to be easily concealed in the bag. The bag may be carried clutched in the hand or under the arm. You submitted the material costs and indicated that the cord’s cost is 1 percent of the article’s total first cost. You also submitted marketing materials of other similar handbags. Your proposed catalog description reads as follows:
Satin clutch with beading details.
Single flap, three inside compartments; snap close.
7.75 inches x 5 inches x 2 inches. Imported. Black.
ISSUE:
What is the classification of the subject handbag 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.
Handbags, with other surface of textile materials, whether or not with a shoulder strap, including those without handles are classified in subheading 4202.22, HTSUSA. The subject clutch contains a discrete braided textile cord loop of six inches in length that may either be used or concealed in the bag.
In order to determine whether the clutch bag is classifiable under subheading 4202.22.40, HTSUSA, as being "in part of braid", we consider General Note (GN) 3(h)(v), HTSUSA, which states, in pertinent part:
the terms "wholly of", "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:
“wholly, of” means that the goods are, except for negligible
or insignificant quantities of some other material or materials, composed completely of the named material;
“in part of” or “containing” mean that the goods contain a significant quantity of the named material.
With regard to the application of the quantitative concepts specified above, it is intended that the de minimis rule apply.
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).
In Bantam Travelware v. United States, 11 C.I.T. 893, 679 F. Supp. 8, Slip Op. 87-131 (1987), several factors were discussed in determining whether articles of luggage containing braided material (not observable to the naked eye) within the handles/straps, were considered to be "in part of" braid. The factors included: the commercial utility of the particular quantity of braided component used in the article, the component's effect on the article's salability, consumer preference, and the relevant trade's recognition of the importance of the component's use. In Bantam Travelware, the Court of International Trade found insufficient evidence that the use of braid produced a meaningful advantage as to the product's performance or appearance, and no proof that the use of braid enhanced salability of the goods or that it was preferred by consumers. Evidence as to trade recognition was said to be inconclusive. It was held that the luggage did not contain a commercially significant quantity of braid to be classified as being "in part of braid." We will consider factors such as those used in Bantam Travelware in the instant case.
While Customs has often found evening bags that have a singular braided shoulder strap to be classifiable as being “in part of braid” (see Headquarters Ruling Letter (HQ) 089386, dated March 18, 1992, infra), the instant bag has a braided textile cord loop that is only six inches in length and is designed to be easily concealed in the bag. The issue is whether the loop is de minimis for purposes of classifying the handbag. Thus, if the handbag contains a significant quantity of braid, and if that portion or quantity of braid serves a useful purpose or affects the nature of the handbag or increases its salability, then the instant handbag will be considered to be “in part of braid”. See HQ 084075, dated July 14, 1989, classifying five styles of evening bags made of rayon satin partially covered with glass beads in subheading 4202.22.8050, as the “braid on the handbags [did] not increase the utility or the potential salability of the handbags.”
In HQ 089386, CBP classified certain ladies’ evening bags with visible shoulder straps as being “in part of braid” in subheading 4202.22.4030, HTSUSA, because the braided shoulder straps were fully functional, as they were 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); and commercially significant, as the braid straps constituted the most common means to carry purses. Id. Also, the braided strap added to the complexity of the bags’ manufacture when it formed the entire length of the shoulder strap, thereby enhancing the bag’s utility and style and making the articles marketable for evening wear.
It should be noted that in finding the evening bags of HQ 089386 to be "in part of braid," CBP 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." Id. Further, CBP agreed 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."
We find the subject bag is similar to the braided clutch bag with strap in HQ 084075, dated July 14, 1989, as the strap in neither case is the common means to carry the bag. Both the instant loop and the strap of HQ 084075, supra, are alternative means to carrying the bags, both of which may also be carried under the arm or in the hand. The instant braided textile loop does not appear to be commercially significant since it is able to be easily concealed by placement on the inside of the bag. Also, the loop does not appear to affect the bag’s function or utility, or increase the bag’s salability. Finally, the loop is neither “extravagant nor dressy [as it does not] provide [any] indication that the [instant clutch] bag is designed as an article for evening or formal wear.” See HQ 960489, dated October 10, 1997, affirming CBP’s classification of one style of shoulder bag as being not “in part of braid”. That bag was classified in subheading 4202.22.8050, HTSUSA. In this instance, we find that the subject bag is intended for evening or formal wear, not a result of the loop’s presence but because of its satin fabric and attached glass beads.
Therefore, in light of the above analysis, we find the de minimis rule is applicable and the instant clutch bag is not classifiable as being “in part of braid.”
HOLDING:
The clutch handbag identified as style F 0405214 is classified under subheading 4202.22.8050, HTSUSA, which provides for handbags, whether or not with shoulder strap, with outer surface of textile materials, other, other, other, of man-made fibers. The textile category number is 670. The general column one rate of duty is 17.6 percent ad valorem.
There are no applicable quota/visa requirements for products of World Trade Organization (WTO) member-countries classifiable in this provision. 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 you check, close to the time of shipment, the Textile Status Report for Absolute Quotas, now available on the CBP website at www.cbp.gov.
Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, you should contact the local CPB office prior to importation of this merchandise to determine the current status of any import restraints or requirements.
Sincerely,
Myles B. Harmon, Director
Commercial Rulings Division