CLA-2 OT:RR:CTF:TCM H088427 CkG
Una Gauthier
Barthco International
One CVS Drive
Woonsocket, RI 02895
Re: Revocation of NY N024831, NY N024015, NY N024016 and NY N047035; classification of insulated cooler bags
Dear Ms. Gauthier:
This is in reference to New York Ruling Letters (NY) N024831, issued by the Customs and Border Protection (CBP) National Commodity Division to Rite Aid Corporation on April 7, 2008, NY N024015 and NY N024016, issued to you on March 20, 2008, and NY N047035, issued to you on December 18, 2008, regarding the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of insulated food and beverage bags.
We have reconsidered these decisions. For the reasons set forth below, we have determined that the classification of the containers in subheading 4202.92.08, HTSUS (NY N024015, NY N024831 and NY N047035), as insulated food or beverage bags having an outer surface of textile, and 4202.92.10 (NY N024016), as insulated food or beverage bags having an outer surface of other than textile, is incorrect.
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 proposing to revoke NY N024831, NY N024015,
and NY N024016 was published on October 10, 2012, in Volume 46, Number 42, of the
Customs Bulletin. Two comments were received in response to this Notice. One commenter
suggested that NY N047035 also be included in this revocation. We agree that the
merchandise in NY N047035 is substantially similar to the cooler bags at issue in NY
N024831, NY N024015, and NY N024016, and should be classified according to the analysis
laid out below.
FACTS:
In NY N024831, the subject merchandise was described as follows:
Style 9000838 is a soft-sided insulated cooler bag constructed with a front and top panel of polyester textile material. The sides, back and bottom of the bag are constructed of polyvinyl chloride plastic (PVC) sheeting material… It is designed to provide storage, protection, organization, and portability to food and beverages during travel. The bag is also designed to maintain the temperature of food and beverages. The interior compartment has a mesh pocket and is lined with PVC sheeting material. There is a layer of foam plastics between the outer surface and the PVC lining. It has a top zipper closure and an adjustable shoulder strap. The back exterior has an open pocket. The bag measures about 8” (W) x 5.5” (H) x 4.5” (D).
The front panel of the soft sided cooler bag at issue in NY N024831
features an orange “Igloo” logo, but otherwise does not differ in any visual aspect from the reminder of the bag.
In NY N024015, the subject styles 453474, 453469, 453471, 416959, and 416961, were generally described as:
[A]n insulated soft-sided lunch bag designed to provide storage, protection, organization, and portability to food and beverages during travel. They are also designed to maintain the temperature of food and beverages. Each has a main interior compartment that is lined with a polyvinyl chloride plastic sheeting material. There is a layer of foam plastics between the polyester fabric and the PVC lining. The bags secure with both a zipper closure and a hook and loop fastener. The top of the bags has a padded carrying handle with a plastic clip that allows it to attach to a school bag or similar bag.
Each style has a front panel constructed of polyester textile material, while the sides, backs and bottoms of the bags are of polyvinyl chloride plastic (PVC) sheeting material
Style 453474 measures approximately 7” (W) x 11.5” (H) x 6” (D)…Style 453471 measures approximately 7.5” (W) x 10” (H) x 3” (D)… Style 416959 measures approximately 9” (W) x 10” (H) x 6.25” (D)…Style 416961 measures approximately 7” (W) x 8” (H) x 3” (D).
The merchandise at issue in NY N024016 was described as follows:
Style 453799 is a soft-sided insulated cooler bag that is designed to provide storage, protection, organization, and portability to food and beverages during travel. It is also designed to maintain the temperature of food and beverages. The bag is constructed with a front panel of polyvinyl chloride (PVC) sheeting material while the remaining three sides are constructed of polyester textile material. There is a layer of polyurethane foam plastic between the outer surface and the lining. The bag also has a top carrying handle and a zipper closure. It measures approximately 7.50" (W) x 9" (H) x 3" (D).
Style 335135, at issue in NY N047035, was described as follows:
Item 335135 is a soft-sided insulated cooler bag. The outer surface of the bag is composed of two materials. The front panel of the bag and the top are composed of man-made textile material. The sides, back and bottom are composed of plastic sheeting material. The essential character of the cooler bag is imparted by the textile fabric of the front panel. The bag is designed to provide storage, protection, portability, and organization to food and beverages during travel. It is also capable of maintaining the temperature of food and beverages. It features a rubberized grip handle, adjustable shoulder strap, two storage compartments, a plastic interior lining, and a zippered closure. There is a layer of foam between the lining and the outer surface materials.
This model is described as the “Playmate Gripper”. The top front panel features a white Igloo logo, but does not otherwise differ in any visual aspect from the reminder of the bag.
ISSUE:
Whether the essential character of the instant cooler bags is imparted by the textile or plastic outer surface.
LAW AND ANALYSIS:
Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes and, provided such headings or notes do not otherwise require, according to the remaining GRIs 2 through 6. GRI 6, HTSUS, requires that the GRI's be applied at the subheading level on the understanding that only subheadings at the same level are comparable. The GRI's apply in the same manner when comparing subheadings within a heading.
4202: 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:
Other:
4202.92: With outer surface of sheeting of plastic or of textile materials:
Insulated food or beverage bags:
With outer surface of textile materials:
4202.90.04: Beverage bags whose interior incorporates
only a flexible plastic container of a kind for storing and dispensing potable beverages through attached flexible tubing. . .
4202.92.08: Other . . . .
4202.92.10: Other . . .
* * * * *
There is no dispute that the instant cooler bags are classified in heading 4202, HTSUS, as insulated food or beverage bags. The issue arises at the 8 digit subheading level, which requires the application of GRI 6. GRI 6 requires that the GRI's be applied at the subheading level on the understanding that only subheadings at the same level are comparable.
At the eight-digit subheading level, the issue is whether the instant insulated food or beverage bags have an outer surface of textile or non-textile material. Because the instant bags have outer panels of both textile and plastic, classification is determined by application of GRI 3.
GRI 3 states:
When by application of [GRI] 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected 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 . . . , 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 . . . 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.
(c) When goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration.
The headings covering the article refer only to part of the materials or
components contained therein. Therefore, under GRI 3(a), the headings must be regarded as equally specific in relation to the article, and the article must be classified as if it consisted of the material or component which gives it its essential character, pursuant to GRI 3(b).
The “essential character” of an article is “that which is indispensable to the structure, core or condition of the article, i.e., what it is.” Structural Industries v. United States, 360 F. Supp. 2d 1330, 1336 (Ct. Int’l Trade 2005). EN VIII to GRI 3(b) explains that "[t]he 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 the constituent material in relation to the use of the goods.” The classification of the instant cooler bags will thus turn on which component imparts the essential character to the whole.
The front and top panels of the bags at issue in NY N024831 (style 900838) have an outer surface of man-made textile material. The sides, back and bottom are constructed of polyvinyl chloride plastic (PVC) sheeting material. NY N024831 determined that the front textile panel of the bag imparted the essential character. In NY N024018, the bags at issue (styles 453474, 453469, 453471, 416959, and 416961), were composed of a front textile panel and five panels of plastic sheeting. CBP ruled that the essential character of the bags was imparted by the front textile panel. In NY N024016, the front panel of style 453799 was made of plastic sheeting, and the remaining sides were composed of a polyester textile material. CBP found in NY N024016 that the essential character of the bag was imparted by the plastic front panel. In NY N047035, the front and top panels of style 335135 were composed of textile material, and the sides, back and bottom of the bag were composed of plastic sheeting. CBP determined that the front and top panels of style 335135 imparted the essential character of the bag because the textile surface comprised roughly 40% of the external surface area of the bag and the textile material was more valuable than the plastic sheeting.
In the proposed revocation of NY N024831, NY N024015, and NY N024016, CBP upheld the decision to classify style 335135 in subheading 4202.92.08, HTSUS. One comment received in response to the notice of proposed revocation argued that upholding NY N047035 was inconsistent with the decision to revoke NY N024831, NY N024015, and NY N024016, because merchandise at issue in all four rulings is substantially similar, and the differences in physical characteristics are insufficient to justify a different outcome. We have considered these arguments, and agree that NY N047035 is also incorrect.
CBP has consistently determined that the material comprising the bulk of the exterior surface area of a bag imparts the essential character, even where the front panel featured a visually appealing design such as a cartoon character. See e.g., NY M82559, dated May 2, 2006 (in which three bags with front panels of PVC sheeting featuring Dora the Explorer, Tinkerbell, and SpongeBob motifs were classified according to the majority textile outer surface area) and NY M84189, dated June 16, 2006 (in which two bags with PVC front panels depicting a Cars theme were classified on the basis of the textile outer surface area). See also, HQ H025873, dated September 3, 2010 (classifying a cooler bag in accordance with the majority of the exterior surface area); HQ 962817, dated January 14, 2002 (four panels with an outer surface of plastic imparted the essential character of a bag because they comprised the bulk of the outer surface of the bag); NY K83596, dated March 3, 2004 (classifying a cooler bag with an exterior surface of an equal quantity of plastic and textile material at GRI 3(c) in subheading 4202.92.10, HTSUS).
The front panel of an insulated food or beverage bag might impart the essential character to the whole in cases where its bulk, quantity, weight or value, or role in relation to the use of the goods significantly outweighs the remainder of the bag. However, this is not the case with regard to styles 9000838, 453474, 453469, 453471, 416959, 416961, 453799, and 335135.
Style 9000838 has only two panels of textile material, and four panels of plastic sheeting. Styles 453474, 453469, 453471, 416959, and 416961 have only one panel of textile material, with the remainder of the external surface area composed of plastic sheeting. Style 335135 has three textile panels and four plastic panels. Finally, style 453799 consists of one panel of plastic sheeting surrounded by textile panels. In each of these cases, the material composing the front panel of the bags is only a small portion of the external surface area. Therefore a finding that the essential character is imparted by the bulk of the outer surface area is appropriate and consistent with past CBP rulings.
In the case of style 335135 and NY N047035, the closer ratio of textile to plastic and higher value of the textile weighs in favor of a finding that the essential character is imparted by the textile; however, the fact that the greater exterior surface of the bag is composed of plastic supports the opposite conclusion. Upon further consideration, we find that the neither the plastic nor the textile material can clearly be said to impart the essential character of the bag. Classification will thus be determined by GRI 3(c), which holds that classification falls to the heading or subheading which occurs last in numerical order among those which equally merit consideration. In the instant case, subheading 4202.92.10 occurs last in numerical order.
Styles 9000838 (NY N024831), 453474, 453469, 453471, 416959, and 416961 (NY N024015), have an outer surface composed mostly of plastic. By application of GRI 3(b), these styles are therefore classified in subheading 4202.92.10, HTSUS, as insulated food or beverage bags with a non-textile outer surface material. By application of GRI 3(c), style 335135 (NY N047035) is also classified in subheading 4202.92.10, HTSUS. Style 453799 (NY N024016) has an outer surface area composed primarily of textile. Style 453799 is thus classified in subheading 4202.92.08, HTSUS, as an insulated food or beverage bag with an outer surface of textile materials.
HOLDING:
By application of GRI 3(b), the cooler bags at issue in NY N024831 and NY
N024015 (Styles 9000838, 453474, 453469, 453471, 416959, and 416961) are classified in heading 4202, HTSUS, specifically subheading 4902.92.10, HTSUS, which provides for “Trunks, suitcases… 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: Insulated food or beverage bags: Other.” The 2015 column one, general rate of duty is 3.4% ad valorem.
By application of GRI 3(b), the cooler bag at issue in NY N024016 (Style 453799) is classified in subheading 4202.92.08, which provides for “Trunks, suitcases… 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: Insulated food or beverage bags: With outer surface of textile materials: Other.” The 2015 column one, general rate of duty is 7% ad valorem.
By application of GRI 3(c), style 335135, at issue in NY N047035, is classified in heading 4202, HTSUS, specifically subheading 4902.92.10, HTSUS, which provides for “Trunks, suitcases… 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: Insulated food or beverage bags: Other.” The 2015 column one, general rate of duty is 3.4% ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided online at http://www.usitc.gov/tata/hts/.
EFFECT ON OTHER RULINGS:
NY N024016 (March 20, 2008), NY N024015 (March 20, 2008), NY N024831 (April 7, 2008) and NY N047035 (December 10, 2008) are hereby revoked.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division