HQ H292799
OT:RR:CTF:FTM H292799 TSM
Mr. R. Kevin Williams
Clark Hill PLC
130 E. Randolph St.
Suite 3900
Chicago, IL 60601
RE: Reconsideration of HQ H287971; Classification of premium cold packs (ice bags).
Dear Mr. Williams:
This is in response to your November 22, 2017, request for reconsideration of Headquarters Ruling Letter (“HQ”) H287971, dated September 29, 2017, issued to Precept Medical Products, Inc. (“Precept”). In that ruling, U.S. Customs and Border Protection (“CBP”) found that the ice bags at issue are classified under subheading 6307.90.98, Harmonized Tariff Schedule of the United States (“HTSUS”). We affirm HQ H287971 because we agree that the ice bags at issue are composite goods and that their essential character is determined by the textile component.
HQ H287971 described the ice bags at issue as follows:
[t]he goods at issue in this protest are premium cold packs (ice bags) imported by Precept from China. They consist of a tough plastic bag, or bladder, to be used to hold ice, with an attached rigid plastic clip for fastening the top of the plastic bag and keeping the ice to be placed within the bag securely within it; the clip also prevents leakage of water as the ice that has been placed within the bag melts. The plastic ice bag is imported together with a nonwoven textile bag which holds and contains the plastic ice bag. The textile bag consists of two layers of nonwoven fabric: a soft outer layer, and an absorbent inner layer. Four nonwoven textile ties are sewn on to all four corners of the textile bag for attachment of the ice pack (plastic ice bag and nonwoven textile bag holder) to a human body.
The cold packs are imported for use in hospitals and other health care settings. They are disposable ice packs, meant to be secured to whichever part of a patient’s body (knee, leg, arm, elbow, etc.) will benefit from the therapeutic qualities (reduction in swelling, etc.) of the application of ice.
In your request for reconsideration, you claim in pertinent part as follows:
The ice packs at issue are provided for eo nomine as ice bags, which includes all forms of the named article, including improved forms. Adding a textile covering to the ice bag is a mere improvement, which does not transform it into a different article. Moreover, the ice bags at issue are known in trade and commerce as “ice bags” whether or not they are used with textile coverings. Therefore, the ice bags can be classified under GRI 1, without resort to GRI 3.
Alternatively, if the ice bags are considered composite goods, the essential character of the bags is imparted by the plastic bag that holds the ice. The textile covering adds an additional secondary feature to the ice bag, but does not change its essential character or its use as an ice bag. Customs has long recognized that the essential character of composite goods that provide heating or cooling is provided by the heating or cooling component.
With regard to your first argument, that the ice bags at issue are classified under GRI 1 and without resort to GRI 3, we note that they are composite goods consisting of two components: an ice bag and a textile cover. The primary function of the ice bag is to treat muscle strains or sprains. The primary function of the textile cover is to protect the users from ice burns. We find that GRI 1 is inapplicable here, because the ice bags and the textile covers are each designed to perform a separate function, and are not described in the same heading. In this regard, it should also be noted that there is no HTSUS heading providing for ice bags. If imported alone, the ice bags would be classified in heading 3926, HTSUS, and specifically subheading 3926.90.21, HTSUS, which provides for “Other articles of plastics and articles of other materials of headings 3901 to 3914: Other: Ice bags…” The textile covers, if imported alone, would be classified in heading 6307, HTSUS, and specifically in subheading 6307.90.98, HTSUS, which provides for “Other made up articles, including dress patterns: Other: Other: Other.”
In your request for reconsideration, you argued that the textile component is a mere improvement, which does not change the essential character or use of the ice bags at issue. You further argued that an article in the tariff that is provided for by its name includes all forms of the named article, including improvements to the article. You cited pertinent case law to support these arguments, which we turn to next. In Camelbak Products, LLC v. United States, 649 F.3d 1361 (Fed. Cir. 2011), the U.S. Court of Appeals for the Federal Circuit considered the tariff classification of back-mounted packs used for outdoor activities and athletics designed to deliver water to the user hands-free, allowing the user to consume water on-the-go without having to interrupt activity. The court held that it remained to determine the essential character of the imported articles since the articles were not simply improved backpacks and contained features substantially in excess of the common meaning of backpacks. While the importer's articles permitted a user to carry some personal effects, the hydration component had a different design and primary use of providing a temperature-maintained, continuous source of hands-free hydration to a user while engaged in an activity. Thus, the articles were composite goods made up of two components under separate classifications.
Upon review, we find that the ice bags with textile covers under consideration are similar to the merchandise at issue in Camelbak Products in that both contain features in excess of the common meaning of the articles provided for by the pertinent HTSUS provisions. Just as the backpacks in Camelbak Products contained features substantially in excess of the common meaning of backpacks, the covers for the ice bags at issue perform a function substantially in excess of the function provided by the ice bag alone. As discussed above, the primary function of the ice bag is to treat muscle strains or sprains, while the primary function of the textile cover is to protect the users from ice burns. Therefore, similar to the merchandise at issue in Camelbak Products, the ice bags with textile covers at issue here are composite goods made up of two components classified under separate HTSUS provisions.
In C.T. Takahashi & Co. v. United States, 74 Cust. Ct. 38 (1975), at issue was the tariff classification of sanded and prefinished V-grooved plywood panels. The U.S. Customs Court found that V-grooved plywood, which concealed the edges when fitted together, did not take the plywood out of the eo nomine provision for plywood because it was a mere improvement. Atlas Copco North America, Inc. v. United States, 837 F. Supp. 423 (1993), concerned the tariff classification of an improved kind of bolt that contained within itself the means to deform and develop protrusions upon application of force. The U.S. Court of International Trade concluded that the improvement did not make the bolt into something other than a bolt, albeit it clearly was an improved form of bolt. In United-Carr Fastener Corp. v. United States, 56 Cust. Ct. 347 (1966), at issue was the tariff classification of “tee nuts,” which are used in joining component assemblies of wood together, and designed to replace an older, less efficient method of performing the same function with conventional nut, bolt, and washer. The U.S. Customs Court concluded that the "tee nut" is within the common meaning of the term "nuts" and is classified as such, notwithstanding improvements and increased capabilities. Upon review, we find that the above-referenced cases, featuring single-component articles such as the V-grooved plywood panels, bolts and tee nuts, are distinguishable from the instant case. The ice bags with textile covers under consideration are composite goods made up of two components classified under separate classifications. Accordingly, their tariff classification must be determined applying GRI 3(b).
Casio, Inc. v. United States, 73 F.3d 1095 (Fed. Cir. 1996), concerned the tariff classification of synthesizer models that had one or more additional features such as a ROM-Pack melody or teaching aids, sampling effects device, sequencer, auto-rhythm, and auto accompaniment and/or mixer. The U.S. Court of Appeals for the Federal Circuit held that the addition of other features to the synthesizers did not make them “more than” musical instruments and that such models were properly classified as musical instruments. The court further found that the primary design and function of the additional features became part of and enhanced the synthesizers. Upon review, we find that the merchandise at issue here is different from that at issue in Casio, Inc. v. United States, because the textile covers do not merely enhance the ice bags, but perform a separate function - which is to protect the users from ice burns.
In your request for reconsideration, you also argued that the conclusion that the plastic bags are impractical and hazardous without the textile bag, which adds a new and co-equal function to the article, is wrong. You stated that plastic bags without textile coverings are sold and used as ice bags, and that gel filled bags and chemical filled bags for applying heat and cold are commonly sold and used without protective coverings of any sort. You provided links to Internet research showing that both covered and uncovered ice bags are known in commerce as “ice bags.” In this regard, we note that whether ice bags with and without covers are sold in commerce and known as “ice bags” is not at issue. For tariff classification purposes, of importance is the condition of the imported goods at the time of importation. It is a well-established principle that goods must be classified in their condition as imported. See Mita Copystar Am. v. United States, 21 F.3d 1079, 1082 (Fed. Cir. 1994); See also HQ H197758, dated April 27, 2012; HQ H225011, dated November 5, 2013; HQ H154040, dated June 9, 2011; HQ H135335, dated April 18, 2011. In this case, the ice bags at issue are imported together with textile covers. Accordingly, ice bags sold with no covers are not at issue.
In your request for reconsideration, you also stated that in determining whether the addition of a feature to an article is sufficient to change its fundamental identity, the determining factor is whether the additional feature merely enhances the function and use of the article or so alters that function and use as to constitute a new and different article of commerce. You argued that the addition of the textile covers to the ice bags at issue does not change their primary use. You stated that the secondary purpose and legal effect of the textile covers on the ice bags is exemplified by Ashflash Corporation v. United States, 76 Cust. Ct. 112 (1976). In that case, at issue were “blinker lanterns” that functioned as flashlights and roadside warning devices. The U.S. Customs Court found that the blinker lanterns were not simply portable electric lamps because the roadside warning function provided a separate co-equal function to the article, neither of the two functions being subordinate to the other. Upon review, we do not find that this case is illustrative of an instance where one of the components is secondary to the other. In fact, it concerns merchandise with two separate co-equal functions.
You also referenced Astra Trading Corp. v. United States, 56 Cust. Ct. 555 (1966), which involved the tariff classification of a screwdriver with a flashlight component for illumination. The U.S. Customs Court found that the additional feature of illumination did not transform the basic purpose of the imported article from use as a screwdriver into some other use, nor did it give the article a use in addition to its intended use as a screwdriver. Illumination notwithstanding, the article remained essentially a screwdriver. Similarly, in United States v. Oxford International Corp., 517 F.2d 1374 (C.C.P.A. 1975), which you also referenced, the U.S. Court of Customs and Patent Appeals found that rearview bicycle mirror remained a mirror even though it was imported with a mounting bracket, which “merely facilitated the use of the article as a mirror.”
Upon review, we find that the ice bags with textile covers differ from the merchandise at issue is Astra Trading Corp. and Oxford International Corp. While in those cases the basic use and purpose of the screwdriver and rearview mirror was not transformed by the addition of other features, the ice bags and textile covers in this case perform separate purposes and uses, namely, to treat muscle strains or sprains and to protect the users from ice burns. As discussed above, we find that the ice bags and textile covers are composite goods, consisting of two components.
Consistent with GRI 2(b), the classification of composite goods consisting of more than one material or substance shall be according to the principles of GRI 3. Specifically, GRI 3(b) directs that composite goods made up of different components shall be classified as if they consisted of the material or component that gives them their essential character.
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.” Court decisions on the essential character for GRI 3(b) purposes have looked primarily to the role of the constituent material in relation to the use of the goods. See Estee Lauder, Inc. v. United States, 815 F. Supp. 2d 1287, 1296 (Ct. Int'l Trade 2012); Structural Industries v. United States, 360 F. Supp. 2d 1330; Conair Corp. v. United States, 29 C.I.T. 888 (2005); Home Depot USA, Inc. v. United States, 427 F. Supp. 2d 1278 (Ct. Int'l Trade 2006), aff'd 491 F.3d 1334 (Fed. Cir. 2007).
Upon review of the product at issue, we find that although the ice is directly held by the ice bag - the ice bag is virtually unusable without the textile outer layers that protect the user from being burned by the ice. Although the purpose of the ice bag is to provide ice therapy to the user, the bag alone could not be applied to the skin without causing injury. Without the textile outer layers, the bag alone would not be of much more use than applying the ice directly to the skin. It is therefore the textile bag that renders this item functional and consequently, provides this item with essential character.
You argue that the essential character of heating or cooling bags with textile covers is always imparted by the heating or cooling component, regardless of whether such component is built-in and present at the time of importation. In support, you argue that the textile covers have nothing to do with the cooling element in the ice bags and that “all of the common meanings of ‘ice bag’ refer to a waterproof bag to be filled with ice and applied to a portion of the body to be cooled.” You state that in prior rulings, CBP improperly determined that essential character is determined by a heating or cooling element only when such heating or cooling element is present at the time of importation.
We briefly consider several relevant prior rulings. In HQ 966262, dated May 29, 2003, CBP determined that the essential character of a heated head therapy wrap, consisting of a head cover or hood and plastic covered gel packs that can be heated in a microwave and placed inside specially shaped pockets, was imparted by the textile headgear rather than the plastic chemical packet, since the wrap maintains the recognizable shape of the heated wrap. In HQ 957182, dated March 6, 1995, CBP found that the essential character of body/back warmers consisting of energy packs (filled with wax, water, small amounts of emulsifying agents and anti-bacterial agents sealed in plastic) and textile pouches was imparted by wax, which imparts the essential character to the energy packs. In HQ 959825, dated May 19, 1999, CBP found that the essential character of body pads/back warmers, pocket warmers and comfort wraps, comprised of textile pouches and energy packs (containing chemical mixtures (composed of (a) paraffin wax (a hydrocarbon mixture), water, a surfactant and an antibacterial agent or (b) paraffin wax, silica sand (silicon dioxide, chemical formula SiO2), and a non-toxic coloring agent), was imparted by the chemical mixtures. In HQ 964054, dated March 2, 2001, CBP found that the essential character of heating or cooling packs composed of energy packs and textile covers (consisting of water and polyurethane foam sealed in a watertight polyurethane film bag) was imparted by the energy pack.
Upon review, we note that in HQ 966262, the essential character was determined to be imparted by the textile portion (not the heating component) of the therapy wrap. In the other rulings referenced above, the heating/cooling components were determined to impart the essential character based not on the composition of the bags alone, but on the ingredients most vital to the bags’ heating or cooling functions, and contained inside at the time of importation: wax in HQ 957182, chemical mixtures in HQ 959825, and polyurethane foam in HQ 964054. In this case, the ice bags are imported empty and contain no ingredients vital to their performance. Therefore, for the reasons discussed above, we find that the essential character of the ice bags under consideration, in their condition as imported, is imparted by the textile component. It should also be noted that even assuming, arguendo, that the essential character of the ice bags at issue could not be determined by application of GRI 3(b), the ice bags would be classified applying GRI 3(c). Under GRI 3(c), the heading which occurs last in numerical order among those which equally merit consideration would determine the tariff classification of the ice bags. Because heading 6307, HTSUS, occurs later in numerical order than heading 3926, HTSUS, even under GRI 3(c) the ice bags at issue would be classified under heading 6307, HTSUS.
Accordingly, we affirm H287971, dated September 29, 2017, which correctly classified the ice bags at issue under subheading 6307.90.98, HTSUS, which provides for “Other made up articles, including dress patterns: Other: Other: Other.”
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division