November 20, 2001
CLA-2 RR:CR:TE 963420 GGD
TARIFF NO.: 6307.90.9989
Port Director U.S. Customs Service 4341 International Parkway, Suite 600 Atlanta, Georgia 30354
RE: Decision on Application for Further Review of Protest No. 1704-99-100206, filed June 1, 1999, Concerning the Classification of Insulated Bags for Food or Beverages.
This is a decision on a protest timely filed on June 1, 1999, against your decision in the classification and liquidation of certain insulated bags made in China that were entered in May 1998 and are designed to store and carry food or beverages.
You classified the merchandise under subheading 4202.92.4500, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), the provision for “Trunks...traveling bags...sports bags...and similar containers...: Other: With outer surface of sheeting of plastic or of textile materials: Travel, sports and similar bags: Other," with a general column one duty rate (in 1998) of 20 percent ad valorem.
The protestant claims that the goods should be classified in subheading 3924.10.5000, HTSUSA, the provision for “Tableware, kitchenware, other household articles...of plastics: Tableware and kitchenware: Other,” with a general column one duty rate of 3.4 percent ad valorem.
The articles at issue are described as "PVC [polyvinyl chloride] cooler bags with various design logos." The goods are portable, soft-sided, insulated bags that are primarily designed to store and preserve food and/or beverages. The available sample bag, identified as a "Sports Caddy™" and featuring a "Gatorade®" logo, measures approximately 12 inches in height by 12 inches in width by 8 inches in depth. The bag's outermost surface is composed of polyvinyl chloride (PVC) plastic sheeting, but the plastic sheeting is only the outward-facing surface of a layer composed of a woven textile fabric that has been coated, covered or laminated with compact plastic. The combination of the textile and plastic materials forms a textile material which, on its own, is classifiable under heading 5903, HTSUSA. The bag has a PVC plastic lining, a layer of plastic foam insulation material between the outer layer and the lining, an adjustable carrying strap, a partially zippered, fold down top with additional hook and loop fabric fasteners, small side pockets, and a clear plastic flat pocket.
Whether the insulated cooler bags are classified under heading 4202, HTSUSA, as travel, sports or similar bags; under heading 3924, HTSUSA, as other household articles of plastics; or under heading 6307, HTSUSA, as other made up [textile] articles with outer surface of fabric-backed plastics.
LAW AND ANALYSIS:
Classification under the HTSUSA is made in accordance with the General Rules of Interpretation (GRI). 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 GRI may then be applied. The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System, which represent the official interpretation of the tariff at the international level, facilitate classification under the HTSUS by offering guidance in understanding the scope of the headings and GRI.
The classification of portable, soft-sided, insulated cooler bags with outer surface of plastics (not backed with textile fabric), was examined 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 held that the appropriate classification for the cooler bags at bar was subheading 3924.10.5000, HTSUSA, noting that the provision
encompassed exemplars (such as salt, pepper, mustard, and ketchup dispensers) that were ejusdem generis with the coolers because their purpose was to contain food and beverages.
This office concluded that the CAFC’s decision in SGI should be implemented and issued instructions to that effect to Customs field personnel on November 7, 1997, and on March 18, 1998. The March 1998 instructions were also approved for dissemination to members of the importing community, and expressly extended the principles of the SGI decision to insulated containers with outer surfaces composed in whole or in part of textile materials. The instructions noted, however, that since insulated bags with outer surfaces of textile materials were not the same in all material respects as the coolers subject to the SGI decision, they were to be classified in subheading 6307.90.9989, HTSUSA. The importing community was advised to be aware that visa and quota requirements could be applied to such cooler bags, that textile categories could be subdivided into parts, and that current information as to the status of any import restraints or requirements should be obtained from local Customs offices.
Shortly thereafter, more information affecting the importation of insulated cooler bags did become available to importers. In March 1998, a decision was made by the International Trade Commission (ITC) to amend the HTSUS with respect to the classification of cooler bags. In order to capture and continue the quota treatment of bags migrating from heading 4202, HTSUS, as a result of the SGI case, the ITC inserted new tariff breakouts under subheading 6307.90.99, HTSUS, providing for "Cooler bags with an outer surface of textile materials." Effective April 1, 1998, new statistical breakouts under subheading 6307.90.99, HTSUS, were provided for cooler bags with outer surface of cotton (6307.90.9905), with outer surface of man-made fibers (6307.90.9907), and with outer surface of other textile materials (6307.90.9909). Textile categories 369, 670, and 870, were also applied to the new breakouts for cooler bags with outer surface of cotton, of man-made fibers, and of other textile materials, respectively. Cooler bags with an outer layer composed of fabric-backed compact plastics, with the plastic surface facing outward, remained properly classified in subheading 6307.90.9989, HTSUSA, a provision not subject to quota/visa requirements. An instruction concerning bags with this specific outer surface composition was issued on September 10, 1998, and was approved for dissemination to members of the importing community.
In Headquarters Ruling Letter (HQ) 961940, dated September 30, 1998, this office classified in subheading 6307.90.9989, HTSUSA, three styles of cooler bags, each with an outer layer composed of textile fabric which - like the bags at issue here - had been coated, covered or laminated with a layer of compact PVC plastic. The plastic surface of the material faced outward and was embossed to simulate the appearance of a woven fabric. In that ruling, this office thoroughly discussed the GRI, the pertinent explanatory and legal notes to Chapter 39, HTSUSA, and the legal notes to Chapter 56, Chapter 59, and Section XI, HTSUSA, which collectively provided the basis for finding that each bag's outer layer constituted a fabric of heading 5903, and that each bag itself was a textile article of Section XI, HTSUSA. The "Sports Caddy™" insulated cooler bag at issue in this case is therefore classified in subheading 6307.90.9989, HTSUSA. For additional rulings regarding the classification of substantially similar merchandise, see HQ 961944, HQ 961240, HQ 962023, all dated September 25, 1998, HQ 961712, dated November 12, 1998, HQ 960242, HQ 960243, and HQ 960296, all dated March 17, 1999, HQ 961963, HQ 961945, HQ 962120, all dated April 7, 1999, and HQ 963602, dated October 18, 1999.
The protestant should be aware that, on November 18, 1999, the ITC instituted Investigation No. 1205-5, which proposed changes to the HTS resulting from the work of the World Customs Organization and the Harmonized System Committee to update and clarify the Harmonized System nomenclature. Effective January 1, 2002, the adoption of modifications to the text of heading 42.02 will result in insertion of the term “insulated food or beverage bags” immediately following the term “traveling bags.” This modification will require that all cooler bags currently classified under headings 6307 or 3924, be classified only under heading 4202, in subheading 4202.92.05 (outer surface of textile materials) or subheading 4202.92.10 (outer surface of other materials such as plastics or fabric-backed compact plastics), HTSUSA. A new eighth paragraph will be inserted in the EN to heading 42.02 stating that “The expression ‘insulated food or beverage bags’ covers reusable insulated bags used to maintain the temperature of foods and beverages during transport or temporary storage.” Proposed changes to the HTS are available in the Office of the Secretary, Room 112, United States International Trade Commission, 500 E Street, S.W., Washington, D.C. 20436 (telephone: 202-205-2000), and are posted on the Commission's web site at www.usitc.gov.
The merchandise described as "Sports Caddy™ PVC cooler bags" is classified in subheading 6307.90.9989, HTSUSA, the provision for “Other made up [textile]
articles, including dress patterns: Other: Other: Other, Other: Other." The general column one duty rate is 7 percent ad valorem.
Except to the extent that reclassification of the merchandise as indicated above results in a partial allowance, the protest should be DENIED. In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision.
No later than 60 days from the date of this letter, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and by other methods of public distribution.
John Durant, Director Commercial Rulings Division