CLA-2: OT:RR:CTF:TCM H031400 KSH
Brenda Jacobs, Esq.
Sidley Austin LLP
1501 K Street N.W.
Washington, DC 20005
RE: Modification of NY N025384 dated April 15, 2008; Classification of handbag with pouch and tote bag with pouch
Dear Ms. Jacobs: This is in reply to your letter dated June 18, 2008, in which you have requested reconsideration of New York Ruling Letter (NY) N025384, dated April 15, 2008. In NY N025384, a handbag with pouch and tote bag with pouch were individually classified rather than classified as sets.
In your request for reconsideration, you state that the aforementioned ruling is in
conflict with NY N027768, dated June 3, 2008, in which a substantially similar handbag and pouch were classified as a set pursuant to GRI 3(b).
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, notice of the proposed action was published on October 23, 2008, in Volume 42, Number 44of the Customs Bulletin. CBP received no comments in response to the proposed notice.
FACTS:
The merchandise at issue is a handbag and pouch, identified as Style 7520 and a tote bag and pouch, identified as Style 7547. Both the handbag with pouch and tote bag with pouch are imported and sold together at retail as a single item. As presented at retail, the pouches are attached to the handbag or tote bag by a plastic “secure tak” fastener.
Style 7520 features a man-made fiber textile outer-surface. The handbag measures approximately 11.5” wide by 8” high by 4.5” deep. It has a zipper closure and a single textile lined interior compartment that includes a hanging zippered pocket. The front exterior of the handbag features a single zippered pocket covering the length of the bag. The back exterior of the handbag features a small zippered pocket and open pocket. The handbag has an adjustable webbed shoulder strap and is trimmed with the same webbing fabric.
The pouch measures approximately 7.25” by 5.75”. It features a single zippered closure across the top accented by a grosgrain ribbon imprinted with the trademark “Le Sportsac.” It is designed to carry or store the handbag when not in use and to organize and carry small articles of a kind normally carried in a handbag, such as cosmetics, a small comb or a mirror.
Style 7547 also exhibits a man-made fiber textile outer surface. The tote bag measures approximately 23” by 12.5” by 4.5”. It has a single top zipper closure accented by a grosgrain ribbon imprinted with the repeating trademark “Le Sportsac.” The interior is textile lined with an interior zippered pocket and a smaller open pocket. The tote has an adjustable webbed shoulder strap and is trimmed with the same webbing fabric.
The pouch measures approximately 8.5” by 7” and features a single zipper closure across the top accented by a grosgrain ribbon imprinted with the repeating trademark “Le Sportsac.” It is designed to carry or store the handbag when not in use and to organize and carry small articles of a kind normally carried in a handbag such as cosmetics, a small comb or a mirror.
ISSUE:
Whether the handbag or tote and accompanying pouch are classified as a set pursuant to GRI 3(b).
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation. 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 GRIs may then be applied.
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) may be utilized. The ENs, though not dispositive or legally binding, provide commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. CBP believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The applicable HTSUS provisions at issue are as follows:
4202 Trunks, suitcases, vanity cases, attaché 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:
4202.22 With outer surface of sheeting of plastic or of
textile materials:
* * * *
Articles of a kind normally carried in the pocket or in the handbag:
4202.32 With outer surface of sheeting of plastic or of
textile materials:
* * * *
Other
4202.92 With outer surface of sheeting of plastic or of textile materials:
There is no dispute that the subject merchandise is classified in heading 4202, HTSUS. GRI 6 provides that the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to GRIs 1 through 5, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.
The subject merchandise contains two articles packaged together, which cannot be classified pursuant to a GRI 1 analysis because the articles are prima facie, classifiable in two different subheadings. If imported separately, the handbag would be classified in subheading 4202.22, HTSUS, which provides, in part, for "Handbags, whether or not with shoulder strap, including those without handle", the tote would be classified in subheading 4202.92, HTSUS, which provides, in part, for “Other” bags and the handbag or totes
pouch would be classified in subheading 4202.32, HTSUS, which provides, in part, for "Articles of a kind normally carried in the pocket or in the handbag.” When goods are, prima facie, classifiable in two or more headings, they must be classified in accordance with GRI 3, which provides, in relevant part, 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 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.
* * * *
GRI 3 establishes a hierarchy of methods for classifying goods that fall under two
or more headings. GRI 3(a) states that the heading providing the most specific description is to be preferred to a heading, which provides a more general description. However, GRI 3(a) indicates that when two or more headings each refer to part only of the materials or substances in a composite good 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 complete or precise description than the other. In this case, the subheadings 4202.22, 4202.32 and 4202.92, HTSUS, each refer to only part of the items in the set. Thus, pursuant to GRI 3(a), we must consider the headings equally specific in relation to the goods. Accordingly, the goods are classifiable pursuant to GRI 3(b). In classifying the articles pursuant to a GRI 3(b) analysis, the goods are classified as if they consisted of the component that gives them their essential character and a determination must be made as to whether or not these are "goods put up in sets for retail sale". In relevant part, the ENs to GRI 3(b) state: (VII) In all these cases the goods are to be classified as if they consisted of the
material or component which gives them their essential character, insofar as this criterion is applicable.
(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 or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.
* * * *
(X) For the purposes of this Rule, the term "goods put up in sets for retail sale" shall be taken to mean goods which:
consist of at least two different articles which are, prima facie, classifiable in different headings. Therefore, for example, six fondue forks cannot be regarded as a set within the meaning of this Rule;
consist of products or articles put up together to meet a particular need or carry out a specific activity; and
are put up in a manner suitable for sale directly to users without repacking (e.g., in boxes or cases or on boards).
In accordance with GRI 3(b), we find that the subject component articles are properly classified as "sets" because they consist of goods put up in a set for retail sale. In this instance, the pouch is designed to coordinate with the handbag or tote bag in that it is constructed of the same fabric and is color coordinated to match the patterns of the handbag or tote. The pouch is also a typical accessory that one might expect to be sold with a hand bag or tote. The handbag, tote and pouch serve the singular purpose of helping the user to carry various items. Furthermore, the components in this set are, prima facie, classifiable in different subheadings and have been put up in retail packaging suitable for sale directly to users without repacking. See also NY G82760, dated October 10, 2000, and NY G87109, dated February 14, 2008.
There have been several court decisions on "essential character" for purposes of GRI 3(b). These cases have looked to the role of the constituent materials or components in relation to the use of the goods to determine essential character. See, Better Home Plastics Corp. v. United States, 916 F. Supp. 1265 (CIT 1996), affirmed, 119 F. 3d 969 (Fed. Cir. 1997); Mita Copystar America, Inc. v. United States, 966 F. Supp. 1245 (CIT 1997), rehearing denied, 994 F. Supp. 393 (CIT 1998), and Vista International Packaging Co., v. United States, 19 CIT 868, 890 F. Supp. 1095 (1995). See also, Pillowtex Corp. v. United States, 983 F. Supp. 188 (CIT 1997), affirmed, 171 F. 3d 1370 (Fed. Cir. 1999). The handbag of style 7520 and the tote bag of style 7547 carries and keeps its pouch and enhances the usefulness of the pouch when used in combination with the handbag or tote bag. Moreover, the handbag or tote bag provide the bulk of the set and visual impact. In this instance, it is the handbag or tote bag that imparts the essential character to the set.
HOLDING:
Pursuant to GRI 1, Style 7520 and Style 7547 are classified in heading 4202. By
application of GRI 6 and GRI 3(b), Style 7520 is classified in subheading 4202.22.8050, HTSUSA (Annotated), which provides for: “Trunks, suitcases, vanity cases, attaché 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: Other: Other: Other, Of man-made fibers.” The column one, general rate of duty is 17.6% ad valorem. The textile category code is 670.
By application of GRI 6 and 3(b), Style 7547 is classified in subheading 4202.92.3031, HTSUSA, which provides for “Trunks, suitcases, vanity cases, attaché 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: Other: With outer surface of sheeting of plastic or of textile materials: Travel, sports and similar bags: With outer surface of textile materials: Other, Other: Other.” The column one, general rate of duty is 17.6% ad valorem. The textile category code is 670.
With the exception of certain products of China, quota/visa requirements are no longer applicable for merchandise which is the product of World Trade Organization (WTO) member countries. The textile category number above applies to merchandise produced in non-WTO member-countries. Quota and visa requirements are the result of international agreements that are subject to frequent renegotiations and changes. To obtain the most current information on quota and visa requirements applicable to this merchandise, we suggest you check, close to the time of shipment, the "Textile Status Report for Absolute Quotas" which is available on our web site at www.cbp.gov. For current information regarding possible textile safeguard actions on goods from China and related issues, we refer to the web site of the Office of Textiles and Apparel of the Department of Commerce at www.otexa.ita.doc.gov.
EFFECT ON OTHER RULINGS:
NY N025384, dated April 15, 2008 is hereby modified.
In accordance with 19 U.S.C. 1625 (c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division