In HQ H235569, NY N179138, NY N230128 and NY N204304, CBP classified the bottle bags in heading 4202, HTSUS, specifically in subheading 4202.92.90, HTSUS (now subheadings 4202.92.91, HTSUS and 4202.92.97, HTSUS), which provided for " ... 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: Other: Other."
CBP has reviewed and HQ H235569, NY N179138, NY N230128 and NY N204304, and has determined the ruling letters to be in error. It is now CBP's position that the bottle bags in HQ H235569 are properly classified in heading 4202, HTSUS, specifically in subheading 4202.92.39, HTSUS, which provides for " ... 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 plastics or of textile materials: Travel, sports and similar bags: With outer surface of textile materials: Other." Rate of duty 17.6%
It is now CBP's position that the bottle bags in NY N179138, NY N230128, and NY N204304 are properly classified in heading 4202, HTSUS, specifically in subheading 4202.92.45, HTSUS, which provides for " ... 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 plastics or of textile materials: Travel, sports and similar bags: Other." Rate of duty 20%
CBP is proposing to revoke HQ H235569 and NY N179138, and modify NY N230128 and NY N204304, and to revoke or modify any other ruling not specifically identified to reflect the analysis contained in the proposed HQ H273867, set forth as Attachment E to this notice. Additionally, pursuant to 19 U.S.C. § 1625(c)(2), CBP is proposing to revoke any treatment previously accorded by CBP to substantially identical transactions. Before taking this action, consideration will be given to any written comments timely received. Comments must be received on or before July 6, 2018.
The subject merchandise consists of non-woven polypropylene bags that contain two handles and have open tops. These bags measure approximately nine and a half inches in width and 10 inches in height. When open, they have a depth of approximately seven inches. The bag's handles are also composed of polypropylene and contain a fastener of polypropylene with hook and loop fastener to keep the handles together. The bottom of the subject bags is composed of two layers of polypropylene fabric with padding inserted in between. The top of the bags contains a small loop of polypropylene to allow the bags to be hung so as to be displayed for sale. The inside of the bags is divided into six equally sized compartments by polypropylene dividers. Each compartment measures approximately five inches in width and nine inches in length when closed and can expand to fit the bottles inserted therein. The exterior of the bags contains a tri-colored printed design containing grapes and grape leaves. The logos of 13 grocery stores appear below the design.
These bags are sold or distributed free of charge at stores that sell food and beverages, such as grocery stores, liquor stores, convenience stores, and wineries. Furthermore, the importer, Earthwise, almost always sells them with the names or logos of the stores that distribute them, and its competitors follow a similar practice.
At issues is whether bags that contain compartments sized to hold bottles are classified as "shopping bags" of subheading 4202.92.30, HTSUS, or as "bottle cases or similar containers" of subheading 4202.92.90, HTSUS, in accordance with Additional U.S. Note 1 to Chapter 42, HTSUS.
For the purposes of heading 4202, the expression "travel, sports and similar bags" means goods, other than those falling in subheadings 4202.11 through 4202.39, 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. The Harmonized Commodity Description and Coding System Explanatory Notes ("ENs") constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89–80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). The EN to heading 4202, HTSUS, states, in pertinent part, the following: "This heading covers only the articles specifically named therein and similar containers."
The importer argued that, in accordance with lexicographic sources and judicial definitions in a number of cases, the instant merchandise is a "shopping bag" as named in Additional U.S. Note 1, and therefore is classified as a type of "travel, sports or similar bag," in subheading 4202.90.30, HTSUS. In support of this argument, they cite HQ 963575, dated October 12, 1999, HQ 964450, dated August 8, 2002, HQ 951113, dated May 19, 1992, HQ 957917, dated July 7, 1995, HQ 950708, dated December 24, 1991, and HQ 088562, dated December 5, 1991. Lastly, they argue that because the subject merchandise is classified as shopping bags of subheading 4202.92.30, HTSUS, and are made of polypropylene fabric, they are also classified in subheading 9902.92.30, HTSUS, and are accorded duty-free treatment under this provision.
In response, CBP notes that Totes, Inc. v. United States, 69 F.3d 495; 1995 U.S. App. LEXIS 29841; 17 Int'l Trade Rep. (BNA) 1929 (Ct. Int. Trade 1995), decided the classification of a rectangular case used to organize and store items such as motor oil, tools, and jumper cables in an automobile trunk. It had a zippered top opening, two straps at the sides which formed handles, and reinforced bottom seams. The case's interior was divided into three discrete storage areas using dividers that snapped into place. Totes, Inc., 69 F.3d at 496. There, the court found that heading 4202, HTSUS, is an eo nomine provision, as is subheading 4202.92.90, HTSUS. Furthermore, the court found that the subject case's interior dividers made it more than a general carrying case that could carry any merchandise. Hence, the court found for classification in subheading 4202.92.90, HTSUS, as "similar to" jewelry boxes and cutlery cases, whose purpose was to facilitate an organized separation, protection, storage or holding of their contents. Id. at 497, 500. Furthermore, the court stated that "as applicable to classification cases, ejusdem generis requires that the imported merchandise possess the essential characteristics or purpose that unite the articles enumerated eo nomine in order to be classified under the general terms." Id. at 498. The court found that the rule of ejusdem generis requires only that the subject merchandise share "the essential characteristics" of the goods listed eo nomine in heading 4202, HTSUS, and that these characteristics were those of "organizing, storing, protecting, and carrying various items." Id. at 498.
Subsequent CBP rulings have adhered to this analysis, and have classified bags and cases with fitted or divided interiors with the items in heading 4202, HTSUS, to which they are most akin. See, e.g., HQ H053756, dated September 4, 2009; HQ H064875, dated January 4, 2010; HQ 956140, dated October 29, 1994; HQ 086884, dated August 13, 1990. These rulings are consistent with prior CBP rulings on substantially similar merchandise. See NY N230128; NY N224243; NY N219153; NY N204304; NY N179138; NY N093287; NY N104559.
In the present case, while CBP agreed with counsel that an eo nomine provision such as heading 4202, HTSUS, covers all forms of the subject merchandise, CBP disagreed that the subject bottle bags should be classified in the same provision as "shopping bags." The subject bottle bags can be distinguished from the type of general shopping bags of the cases to which counsel cites. The shopping bags of Adolco Trading Co., 71 Cust. Ct. 145; 1973 Cust. Ct. LEXIS 3350; Cust. Dec. 4487 (1973), for example, were of a large size, and had wide open tops and handles. However, they contained no internal divisions, and as such were almost always used in grocery stores and similar places where customers could use them to transport any type of merchandise. See Adolco Trading Co., 71 Cust. Ct. 150–1511. The subject bags, by contrast, are no longer capable of carrying any type of merchandise because of their fitted interior compartments, which are in the shape of bottles. Furthermore, these compartments are sewn into the subject bags, making their removal impractical. A dual use as bottle bags and as bags for carrying more general merchandise is therefore impossible. As such, the subject bottle bags are more akin to the bags of Totes, Inc. and those of the rulings cited above, whose fitted interior compartments spoke in favor of a specific use other than as a shopping bag of subheading 4202.92.30, HTSUS. The instant merchandise is more akin to the types of bottle bags which CBP has previously classified as "other" types of bags of subheading 4202.92.90, HTSUS. See, e.g., NY N230128, dated September 5, 2012; NY N224243, dated July 13, 2012; NY N219153, dated June 19, 2012; NY N204304, dated March 9, 2012; NY N179138, dated August 24, 2011; NY N093287, dated March 9, 2010; NY N104559, dated May 14, 2010.2 Moreover, HQ 963222, dated August 19, 1999, and HQ 960403, dated August 1, 1997, classified bottle bags similar to the merchandise at issue here as other than travel, sports, or similar bags.
Furthermore, in light of the court's conclusion in Totes, Inc. that heading 4202, HTSUS, and specific subheadings therein are eo nomine provisions, CBP found the importer's argument that the provision for "shopping bags" within heading 4202, HTSUS, is a use provision to be untenable. In addition, courts have held that "a 'use' provision is 'a provision describing articles by the manner in which they are used as opposed to by name'." See Pomeroy Collection, Ltd. v. United States, 32 C.I.T. 526, quoting Len-Ron Mfg. Co. v. United States, 334 F.3d 1304. Courts have also held that certain phrases within the provision require that it be construed as a use provision; such phrases include "to be used for," "to be used as," and "for use in." See Clarendon Mktg v. United States, 955 F.Supp 1501, (Ct. Int’l Trade 1997), aff'd 144 F.3d 1464, 1467 (Fed. Cir. 1998); Czarnikow-Rionda Co. v. United States, 66 Cust. Ct. 431, 328 F. Supp. 487 (1971), aff'd 60 C.C.P.A. 6, 468 F.2d 211 (1972); J. E. Bernard & Co., Inc. v. United States, 80 Cust. Ct. 111 (1978).
In the present case, heading 4202, HTSUS, describes its merchandise by name rather than use and does not contain any of the phrases that would indicate that it is a use provision. To the contrary, heading 4202, HTSUS, is clearly an eo nomine provision. As such, CBP found that the Carborundum factors, which the importer cited and discuss in detail, are inapplicable here. If they were applied here, the Carborundum factors would likely support use of the subject merchandise as similar to bottle cases, rather than as a general shopping bag.
Furthermore, the subject bags can be distinguished from those of the rulings counsel cites in favor of classification as "travel, sports or similar bags." Headquarters Ruling letters (HQ) 964450, dated August 8, 2002, HQ 951113, dated May 19, 1992, HQ 957917, dated July 7, 1995, HQ 950708, dated December 24, 1991, and HQ 088562, dated December 5, 1991, all classified bags without any interior pockets or compartments; these open interiors could have carried any merchandise. In HQ 963575, dated October 12, 1999, CBP classified bags with drawstrings that were specifically designed and fitted to hold a sleeping bag as "travel, sports or similar bags." These bags contained no interior compartments, but to the extent that they were fitted for specific merchandise, it was not in the same way that the subject bags are specifically fitted for multiple bottles, thereby precluding the ability to carry other articles.
As such, CBP found that the subject bags are not "travel, sports or similar bags." Therefore, CBP found that the subject bottle bags are classified in subheading 4202.92.90, HTSUS, as "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: With outer surface of sheeting of plastic or of textile materials: Other: Other." This conclusion is consistent with prior CBP rulings on substantially similar merchandise. See NY N230128; NY N224243; NY N219153; NY N204304; NY N179138; NY N093287; NY N104559.
Lastly, the importer submitted laboratory results showing that the durability, volume, machine washablility, lack of lead or other toxic materials, and other characteristics are the same for the instant merchandise as they are for shopping bags. The cited laboratory results do nothing to minimize the differences between the subject bottle bags and general shopping bags. As such, these results are not relevant to our analysis. Therefore, because the subject merchandise is not described as a shopping bag of subheading 4202.92.30, HTSUS, it cannot be accorded duty-free treatment under subheading 9902.40.01, HTSUS.
