RR:CTF:CPM H263986 MG
Margaret Mahas
Import Compliance Manager
Kohl’s Department Stores, Inc.
N56 W17000 Ridgewood Drive
Menomonee Falls
Wisconsin 53051
RE: Revocation of NY N024929, dated April 14, 2008; Tariff classification of handbags and tote bags with a coin purse, spectacle case, and an identification card case
Dear Ms. Mahas: U.S. Customs and Border Protection (CBP) issued Kohl’s Department Stores, Inc., New York Ruling Letter (NY) N024929, dated April 14, 2008, pertaining to the tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS) of a handbag with a coin purse, spectacle case, and an identification card case and a tote bag with a coin purse, spectacle case, and an identification card case.
The samples at issue are referred as style HB18102C, which is a compartmentalized handbag and style HB18103C, which is a tote bag. Both styles are imported with a coin purse, spectacle case, and an identification card case. In N024929 we determined that, although sold together, the items at issue are not designed to meet a particular need or carry out a specific activity and do not constitute a set. CBP, therefore, determined that each item is classified separately under its appropriate subheading. We have since reviewed the tariff classification of the bags at issue and find it to be in error.
On November 1, 2017, 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 in the Customs Bulletin Vol. 51, No. 44. No comments were received in response to that notice.
FACTS:
The items at issue in N024929 are described as follows:
Style HB18102C is a compartmentalized handbag. It is constructed with an outer surface of 100% polyester textile material. The handbag is designed and sized to carry money, keys and other small accessories on a daily basis. It has a main textile-lined compartment with a zippered wall pocket and two open wall pockets. This compartment secures with a top zipper closure. On opposite sides of the main compartment are additional compartments with open tops and no added features. The bag has two carrying handles and it measures approximately 14” (W) x 9” (H) x 4.25” (D).
Style HB18103C is a tote bag. It is constructed with an outer surface of 100% polyester textile material. The tote bag is designed to provide storage, protection, portability, and organization to personal effects during travel. The bag has a textile-lined interior compartment with a zippered wall pocket and two open wall pockets. It has a top zipper closure and two carrying handles. The bag has an exterior zippered pocket, and measures approximately 15.5” (W) x 12” (H) x 4.5” (W).
The coin purses of styles HB18102C and HB18103C are constructed with an outer surface of 100% polyester textile material. The purses feature a single textile-lined compartment. They have a top zipper closure and measure approximately 6” (W) x 3.5” (H) x 1.5” (D).
The eyeglass cases of styles HB18102C and HB18103C are traditional clamshell-type spectacle cases with an exterior surface of 100% polyvinyl chloride (PVC) plastic sheeting. They have hinged lids and plastic inserts that are covered with a flocked material. They measure approximately 7” (L) x 0.5” (D).
The identification card cases of styles HB18102C and HB18103C are constructed with an outer surface of 100% polyvinyl chloride (PVC) plastic sheeting. They have zippered compartments with clear plastic windows for identification. They have open pockets on the front and back exterior and metal key rings. They measure approximately 4.5” (W) x 3” (H).
ISSUES:
Whether the bags and accompanying coin purse, spectacle case, and identification card case are classified as a set pursuant to GRI 3(b).
If so, what is the tariff classification of the article that imparts the essential character to the set?
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:
With outer surface of textile materials:
Other:
Other:
4202.22.81 Of man-made fibers
* * * *
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:
With outer surface of textile materials:
* * * *
Other:
4202.92 With outer surface of sheeting of plastic or of
textile materials:
Travel, sports and similar bags:
With outer surface of textile materials:
4202.92.31 Of man-made fibers
* * * *
There is no dispute that the subject merchandise is classified in heading 4202, HTSUS, nor is there any dispute about the classification of each article at the subheading level. 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. Handbags are classified in subheading 4202.22, HTSUS, coin purses, spectacle cases and ID cases are classified in subheading 4202.32, HTSUS, and tote bags are classified in subheading 4202.92, HTSUS.
The subject merchandise contains several 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 tote’s coin purse, spectacle case, and identification card case 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 coin purse, spectacle case, and identification card case are designed to coordinate with the handbag or tote bag in that they are constructed of the same pattern, style, material, and color coordination to match the patterns of the handbag or tote. The coin purse, spectacle case, and identification card case are also a typical accessory that one might expect to be sold with a handbag or tote. The handbag and tote along with coin purse, spectacle case, and identification card case 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 HQ H031400, dated February 5, 2009, NY G82760, dated October 10, 2000, and NY G87109, dated February 14, 2008.
In Estee Lauder, Inc. v. United States, 815 F. Supp. 2d 1287, 1299-1300 (CIT 2012), the Court of International Trade (“CIT”) clarified that a GRI 3(b) set should be classified according to the item that provided the essential character. Essential character is determined based on a review of “the nature of the [good], its bulk, quantity, weight or value, or by the role of a constituent [good] in relation to the use of the goods.” Id. at 1300. This list is not exhaustive. 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.’ Further, ‘the existence of other materials which impart something to the article ought not to preclude an attempt to isolate the most outstanding and distinctive characteristic of the article.’” Structural Indus. v. United States, 29 CIT 180, 185, 360 F. Supp. 2d 1330, 1336 (2005) (citations omitted). Court decisions that discuss "essential character" for purposes of GRI 3(b) 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).
Consistent with our determination in HQ H031400, we find that the handbag of style HB18102C and the tote bag of style HB18103C serve to carry, keep and protect the coin purse, spectacle case, and identification card case and enhance the usefulness of these items when used in combination with the handbag or tote bag. Moreover, as the handbag or tote bag provide the bulk of the set and visual impact, it is the handbag or tote bag that imparts the essential character to the set.
HOLDING:
By application of GRI 1, Style HB18102C and Style HB18103C are classified in heading 4202. By application of GRI 6 and GRI 3(b), Style HB18102C is classified in subheading 4202.22.8100, 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: Of man-made fibers.” The column one, general rate of duty is 17.6% ad valorem.
By application of GRI 6 and 3(b), Style HB18103C is classified in subheading 4202.92.3131, 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: Of man-made fibers: Other.” The column one, general rate of duty is 17.6% 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 at www.usitc.gov/tata/hts/.
EFFECT ON OTHER RULINGS:
NY N024929, dated April 14, 2008, is hereby REVOKED, as regards the tariff classification of a handbag and tote bag with a coin purse, spectacle case, and identification card case.
In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division