CLA-2 OT:RR:CTF:TCM H133616 EG
John B. Pellegrini, Esq.
McGuire Woods, LLP
1345 Avenue of the Americas
Seventh Floor
New York, NY 10105-0106
RE: Modification of HQ H061115, dated October 1, 2010; Classification of Three Coach Bags
Dear Mr. Pellegrini:
This is in response to your correspondence dated November 17, 2010, in which you request reconsideration of Headquarters Ruling Letter (HQ) H061115, dated October 1, 2010. In HQ H061115, U.S. Customs and Border Protection (CBP) responded to a request for internal advice filed by you on behalf of Coach Services, Inc. (Coach) concerning the tariff classification of five Coach bags under the Harmonized Tariff Schedule of the United States (HTSUS). In HQ H061115, CBP classified the subject merchandise in subheading 4202.21.90, HTSUS, which provides for leather handbags.
In your request for reconsideration, you ask CBP to review the tariff classification of three of the five Coach bags in the original ruling. The three bags at issue are Style No. 11229 (Gallery Leather Laced Tote); Style No. 11230 (Gallery Leather Laced N/S Tote); and Style No. 11409 (Holiday Patchwork Book Tote). You do not dispute the tariff classification of the remaining two Coach bags in HQ H061115. Per your request, we have reviewed HQ H061115 with regard to the three subject bags and find the ruling to be in error. For the reasons set forth below, we hereby modify HQ H061115.
Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. §1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed modification was published in the Customs Bulletin, Vol. 45, No. 20, on May 11, 2011. One comment was received in response to this notice and is addressed in this ruling.
FACTS:
In HQ H061115, CBP described the subject merchandise as follows:
Style No. 11229 (Gallery Leather Laced Tote)
Style No. 11229 has an outer surface of leather and measures 12.5” in length, 9” in height and 4” in width. It features an inside zip pocket, cellular phone/multifunction pockets, a ring to clip an accessory or key fob, two side pockets with turn lock closures, feet to prevent bottom from scuffing, a partial zippered closure, interior lining and handles.
Style No. 11230 (Gallery Leather Laced N/S Tote)
Style No. 11230 has an outer surface of leather and measures 12” in length, 12” in height and 5” in width. It features an inside zip pocket, cellular phone/multifunction pockets, a ring to clip an accessory or key fob, two side pockets with turn lock closures, feet to prevent the bottom from scuffing, a partial zippered closure, interior lining and handles.
Style No. 11409 (Holiday Patchwork Book Tote)
Style No. 11409 has an outer surface of leather and measures 12.6” in length, 12.25” in height and 4.1” in width. It features an inside zip pocket, cellular phone/multifunction pockets, a ring to clip an accessory or key fob, two side pockets with turn lock closures, a partial zippered closure, interior lining and handles.
ISSUE:
Are the Coach bags classified in subheading 4202.21.90, HTSUS, as handbags or in subheading 4202.91.00, HTSUS, as travel, sports or similar bags?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI's). 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. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and mutatis mutandis, to the GRIs 1 through 5.
The 2011 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:
4202.21 With outer surface of leather, of composition leather or of patent leather:
Other:
4202.21.9000 Valued over $20 each…
* * *
Other:
4202.91.00 With outer surface of leather, of composition leather or of patent leather:
4202.91.0030 Travel, sports and similar bags…
* * *
Subheading 4202.91, HTSUS, provides in pertinent part for travel, sports and similar bags of leather. Additional U.S. Note (AUSN) 1 to Chapter 42 states:
For the purposes of heading 4202, [HTSUS,] the expression "travel, sports and similar bags" means goods, other than those falling in subheadings
4202.11 through 4202.39, [HTSUS,] of a kind designed for carrying clothing and other personal effects during travel, including backpacks and
shopping bags of this heading, but does not include binocular cases, camera cases, musical instrument cases, bottle cases and similar
containers.
* * *
Coach does not dispute that the bags are classified in heading 4202, HTSUS. At issue is the applicable six-digit subheading. Therefore, we must apply GRI 6 to determine the correct classification of the bags.
Subheading 4202.21, HTSUS, provides for “handbags” – a term which is not defined in the HTSUS. A tariff term that is not defined in the HTSUS is construed in accordance with its common and commercial meaning. Nippon Kogaku (USA) Inc. v. United States, 69 C.C.P.A. 89, 92 (1982). Common and commercial meaning may be determined by consulting dictionaries, lexicons, scientific authorities and other reliable sources. C.J. Tower & Sons v. United States, 69 C.C.P.A. 128, 134, 673 F.2d 1268, 1271 (1982). In HQ H004184, dated July 2, 2007, CBP set forth several dictionary definitions of handbags, such as “[an] accessory carried primarily by women and girls to hold such items as money, credit cards, and cosmetics” and “a woman’s bag held in the hand or hung from a shoulder strap and used for carrying small personal articles and money.” Thus the common meaning of a handbag is a bag carried by women to hold small personal items such as money, credit cards and cosmetics.
Subheading 4202.91, HTSUS, provides for “other” bags with an outer surface of leather. CBP has developed a practice of referring to certain bags in subheading 4202.91, HTSUS, as “tote bags.” See, e.g. J.E. Mamiye & Sons, Inc. v. United States, 85 Cust. Ct. 92, 102 (1980), HQ 082271, dated December 1, 1988 and HQ H004184, July 2, 2007. In J.E. Mamiye & Sons, the U.S. Customs Court (predecessor to the U.S. Court of International Trade) stated that “tote bags are utilized by women as second handbags to carry items which do not ordinarily fit within a handbag.” Id. at 102. This decision was made when the Tariff Schedule of the United States (“TSUS”) was in effect. As noted in House Conference Report No. 100-576, dated April 20, 1998, on the Omnibus Trade and Competitiveness Act of 1988 (P.L. 100-418), decisions by the Customs Service and the courts interpreting nomenclature under the TSUS are not to be deemed dispositive in interpreting the HTSUS. Nevertheless, on a case-by-case basis, prior decisions should be considered instructive in interpreting the HTSUS, particularly where the nomenclature previously interpreted in those decisions remains unchanged and no dissimilar interpretation is required by the text of the HTSUS. See HQ 961127, dated February 16, 1999; HQ H016036, dated April 1, 2008.
In the present case, both the TSUS and the HTSUS contain provisions with similar language that provide for similar merchandise. For example, Item 706, TSUS, which provided for luggage and handbags, contained breakouts for handbags and “other” bags. The breakout for “other” bags contained further provisions for travel bags “designed to contain clothing or other personal effects during travel.” See, e.g., Items 706.04, 706.06, 706.13, TSUS. Similarly, the HTSUS contains breakouts for handbags,
both of leather and of other material, as well as “other” bags. See, e.g., subheadings 4202.21 and 4202.91, HTSUS. Furthermore, subheading 4202.91.00, HTSUS, also contains a breakout for “travel, sports and similar bags.” As a result, both the merchandise and the nomenclature of the tariff provisions lend themselves to similar interpretations under both tariff systems.
CBP has established several factors to distinguish handbags of subheading 4202.21, HTSUS, from tote bags of subheading 4202.91, HTSUS. With regard to handbags, CBP has stated that they typically: are smaller than tote bags, are designed to carry small personal items, include an inner lining, are reinforced along the bottom and corners, incorporate a substantial closure such as a zipper closure and include compartments to organize small personal items. See HQ 959062, dated January 28, 1997, HQ 960899, dated September 24, 1999 and HQ H005625, dated November 28, 2007. Regarding tote bags, CBP has stated that a tote bag generally has at least one side which exceeds 12 inches in length and can carry many different sundry items such as food, books or clothing. See HQ 082271, dated December 1, 1988 and HQ 950708, dated December 24, 1991.
On January 18, 2011, counsel for Coach brought samples of the three subject Coach bags to CBP. The two larger bags (style nos. 11229 and 11409) each had at least one side which exceeded 12 inches in length, while the third and smallest bag (style no. 11230) had a side which measured exactly 12 inches. Coach’s counsel demonstrated how even the smallest of the three bags could hold a variety of sundry items, such as shoes, an umbrella, a book, a water bottle and other items. While the three bags had several similarities with handbags, such as an inner pocket, lining, reinforcements and a secure top closure, the bags also had a large carrying capacity.
A handbag is a bag carried by women to hold small personal items such as money, credit cards and cosmetics. The two bigger Coach bags (style nos. 11229 and 11409) are larger than a typical handbag because they each have one side which exceeds 12 inches in length. These two bags can also hold a variety of large items, such as shoes, an umbrella, a book, a water bottle and other items. As such, we find that these two Coach bags are classifiable as tote bags under subheading 4202.91, HTSUS.
The third bag (style no. 11230) does not have a side which exceeds 12 inches (it measures 12 inches in height, 12 inches in length and 5 inches in width). However, it holds the same variety of sundry items as the two bigger bags (e.g., clothing, bottled water, shoes, books, umbrellas and other larger items for longer trips). Having one side which exceeds 12 inches is just one factor in distinguishing a handbag from a tote bag. Therefore, we find that the smallest Coach bag (style no. 11230) is also classifiable as a tote bag under subheading 4202.91, HTSUS.
CBP received one comment in response to the proposed revocation. The commenter noted that the proposed modification helps to clarify the distinction between handbags and bags classified in subheading 4202.91, HTSUS, on the basis of carrying capacity. The commenter also stated that while the carrying capacity analysis is useful, the analysis is also largely subjective. In response, we disagree that the test is largely subjective. Rather, the test is an objective analysis of the multiple factors derived from the common meaning of the terms "handbag" and "tote," which distinguish one from the other - like their carrying capacity.
HOLDING:
By application of GRI 6, Coach bag Style No. 11229 (Gallery Leather Laced Tote), Style No. 11230 (Gallery Leather Laced N/S Tote) and Style No. 11409 (Holiday Patchwork Book Tote) are classifiable under subheading 4202.91.0030, HTSUS, which provides for “Trunks, suitcases … traveling bags … sports bags … 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 leather, of composition leather or of patent leather: travel, sports and similar bags.” The column one, general rate of duty is 4.5% ad valorem.
Duty rates are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
EFFECT ON OTHER RULINGS:
HQ H061115, dated October 1, 2010, is hereby modified.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division