CLA-2 RR:CR:TE 960974 GGD
Lynn S. Baker, Esquire
Baker & McKenzie
130 East Randolph Drive
Chicago, Illinois 60601
Dear Ms. Baker:
This is in response to your request dated July 18, 1997, on
behalf of your client, Outer Circle Products Limited (OCP), for
reconsideration and modification of seven District (now Port)
Rulings previously issued to OCP concerning the classification
under the Harmonized Tariff Schedule of the United States
Annotated (HTSUSA) of various styles of insulated bags with outer
surfaces composed essentially of polyvinyl chloride (PVC) that
were manufactured in China and designed to contain food and/or
beverages and other dining accessories.
In District (now Port) Ruling Letters DD 814421, DD 814422,
DD 814423, DD 814424, DD 814426, DD 814427 (all issued September
22, 1995), and DD 816522 (issued October 6, 1995), certain third
parties were advised on behalf of OCP, that the insulated bags
subject to those rulings were classified in subheading
4202.92.4500, HTSUSA. You have based your request for
modification of the rulings upon a decision by the Court of
International Trade (CIT) in SGI, Incorporated v. United States,
917 F. Supp. 822, Slip Op. 96-22 (1996), which held that such
merchandise was properly classified in subheading 4202.92.90,
HTSUS. On appeal, however, the CIT's decision was reversed by
the Court of Appeals for the Federal Circuit (CAFC).
In SGI, Incorporated v. United States, 122 F.3d 1468 (Fed.
Cir. 1997), the CAFC focused on whether food or beverages were
involved with the eo nomine exemplars set forth in the tariff
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provisions at issue and, without discussion of heading 4202
exemplars that organize, store, protect, and/or carry food or
beverages, the CAFC held that the appropriate classification for
the cooler bags was subheading 3924.10.50, HTSUS, the provision
for "Tableware, kitchenware, other household articles...of
plastics: Tableware and kitchenware: Other." The Court stated
that this classification "does encompass exemplars that are
ejusdem generis with the coolers because their purpose is to
contain food and beverages." The exemplars (specifically
enumerated in subheading 3924.10.10) which the Court noted in
particular were the "various household containers for foodstuffs
such as salt, pepper, mustard, and ketchup dispensers and serving
pieces for food."
This office concluded that the CAFC's decision in SGI should
be implemented. Instructions were issued to Customs field
personnel on March 18, 1998 (and approved for dissemination to
members of the importing community), which expressly extended the
principles of the CAFC's decision to portable, hard or soft-sided, insulated coolers and similar insulated containers with
outer surface of plastics or with outer surfaces composed of
textile materials (the latter of which are classified in
subheading 6307.90.99, HTSUS); and to such articles that feature
exterior or interior pockets, webbing, straps, etc., for the
purpose of containing items in addition to foodstuffs, provided
that the additional features do not alter the container's primary
purpose to store and preserve food and/or beverages.
As a courtesy, this letter is sent to advise you that any
rulings issued by Customs under the provisions of 19 CFR 174 or
177 (including the subject rulings issued to OCP), that are
inconsistent with the principles of the SGI decision and the
instructions implementing that decision, are revoked or modified
by operation of law. In this instance, therefore, DD 814421, DD
814422, DD 814423, DD 814424, DD 814426, DD 814427 (all issued
September 22, 1995), and DD 816522 (issued October 6, 1995) are
revoked by operation of law.
The insulated cooler bags subject to the six rulings issued
September 22, 1995, are classified in subheading 3924.10.50,
HTSUS, the provision for "Tableware, kitchenware, other household
articles...of plastics: Tableware and kitchenware: Other."
Although the insulated cooler bag subject to DD 816522 (issued
October 6, 1995) is described in the ruling as having an outer
surface composed, in part, of nylon textile materials, the cooler
bag was classified in subheading 4202.92.4500, HTSUSA, a
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provision applicable to certain articles with an outer surface
composition of other than textile materials. We therefore
suggest that you request a new binding ruling for the cooler bag
subject to DD 816522.
Under the Customs Modernization provisions of the NAFTA
Implementation Act, it is the responsibility of the importer to
classify and appraise merchandise. The U.S. Customs Service
is in the spirit of informed compliance notifying you of the
consequences of the SGI case.
Sincerely,
John Durant, Director
Commercial Rulings Division