HQ 0085996 - Evening handbags - United States International Trade Commision Rulings

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HQ 085996

March 6, 1990

CLA-2 CO:R:C:G 085996 STB

CATEGORY: CLASSIFICATION

TARIFF NO.: 4202 and 7018

Mr. Stephen M. Zelman
Attorney at Law
271 Madison Avenue
New York, N.Y. 10016

RE: Evening handbags

Dear Mr. Zelman:

This is in response to your inquiry of November 10, 1989, regarding classification of four styles of evening handbags under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). Your request concerns prospective transactions by members of the Fashion Accessories Shippers Association, Inc., intending to import handbags from China, Hong Kong, and Macau. In addition to the four samples you submitted for classification, you also submitted other samples which were referenced in various affidavits submitted to support your position on classification of the four handbags.

FACTS:

Sample 6070A is a black, relatively smaller type evening bag, with a rounded bottom and top. It measures approximately 7.5 inches in length at its longest point, 5.75 inches in height at its highest point, and approximately 2 inches in breadth at its widest point. It contains a shell of woven man-made fiber, a lining of man-made fiber, foam between the shell and lining, and a zipper closure. The bag is adorned with a textile ribbon with ten tiny glass pieces, cut into diamond shapes, in the center of the ribbon. A braided handle, approximately 43 inches in length, is attached.

Sample 24551 is a reddish-pink, relatively smaller type evening bag with a flat top and very slightly rounded bottom . It measures approximately 6.5 inches long, 4.5 inches
high and 2 inches in breadth. It contains a woven man-made fiber shell and lining, foam between the shell and lining, and a flap secured by a snap closure. It possesses a braided handle measuring approximately 41 inches in length and braided trim along the edge of the flap measuring approximately 14 inches. There is a textile tassel at the lowest point of the flap.

Sample 242 is a primarily beige evening bag, with a flat top and bottom. It measures approximately 10.75 inches in length, 6.5 inches in height, and one inch in breadth. It contains a man-made fiber shell and lining and a flap closure enclosing a cardboard stiffener secured by a snap. Glass beads cover approximately 40% of the surface area. There is a braided handle approximately 47.5 inches in length.

Sample 248 is gold in color with a straight top and bottom. It measures approximately 9.5 inches in length, 5.5 inches in height and 2 inches in breadth at its widest point. It contains a man-made fiber shell and lining which enclose a cardboard stiffener and has a flap closure secured by a snap. Glass beads, white in color, are sewn in three diamond shaped patterns on the flap. Glass beads, gold in color, cover approximately 80% of the exterior surface. A braided handle, approximately 45.5 inches in length, is attached.

ISSUES:

Whether or not styles 6070A and 24551 should be classified under HTSUSA as being "Wholly or in part of braid."

Whether the essential character of styles 242 and 248 is imparted by textile or the glass bead work.

LAW AND ANALYSIS:

Classification of products under the HTSUSA is governed by the General Rules of Interpretation (GRI's). GRI 1 provides that classification shall be determined according to the terms of the headings and any relevant section or chapter notes.

Before reaching the "braid question", a determination must be made concerning the broader classification category of styles 6070A and 24551. Heading 4202 provides for handbags of textile materials or handbags wholly or mainly covered with such materials. Subheading 4202.22, HTSUSA, provides for "Handbags, whether or not with shoulder strap, including those without handle: With outer surface of plastic sheeting or of textile materials". Sample 24551 possesses a wholly textile exterior. The exterior of sample 6070A is entirely textile, with the exception of the ten tiny glass beads adorning the textile ribbon. It is clear, therefore, that the instant samples are
properly classifiable in subheading 4202.22, HTSUSA.

Subheading 4202.22.40, HTSUSA, provides for handbags which have an outer surface of textile materials wholly or in part of braid. Since samples 24551 and 6070A are not wholly of braid, the determination must be made as to whether they are "in part of braid". For the reasons discussed below, we find that the instant samples are not "in part of braid", and that the appropriate subheading is 4202.22.80, HTSUSA.

General Note 7(e)(ii) provides that "in part of", when used between the description of an article and a material, means that "the goods contain a significant quantity of the named material". General Note 7(e) further provides that the de minimis rule applies to this principle. Inasmuch as General Headnote 9(f) of the Tariff Schedules of the United States Annotated (TSUSA) sets forth a definition of "in part of" which is identical to that contained in the HTSUSA and also provides for application of the de minimis rule, we refer to the court decisions and administrative rulings which interpret this phrase and rule under the TSUSA.

The tests utilized to determine whether an ingredient or component is "in part of" an article for tariff classification purposes have been well established by a number of prior court decisions and Customs Decisions and Rulings. These tests have been thoroughly examined and developed in prior Headquarters' Ruling Letters. See HRL 081483 dated April 27, 1989. The basic aim of these tests is to determine whether, in a particular case, an ingredient or component of an article may be ignored for classification purposes because the ingredient or component is not present in a "significant" quantity.

In Cavalier Shipping Co. v. United States, 67 Cust. Ct. 440, 444, C.D. 4317 (1971), aff'd, 60 CCPA 152, C.A.D. 1103 (1973), the court held that an ingredient is "in part of" an article if quantitatively insignificant amounts of it are present in a sufficient quantity so as "to perform a part in the primary function of the article." 60 CCPA at 156. In Aceto Chemical Co. v. United States, 75 Cust. Ct. 167, C.D. 4625 (1975), aff'd, 64 CCPA 78, C.A.D. 1186 (1977), the Customs Court interpreted the phrase "a part in the primary function of the article" to mean that the ingredient in question must play a role which is the primary function of the article rather than a role which is just related to the primary function. The court opined that a quantitatively minute amount of an ingredient should control classification only in the most limited circumstances.

Although this test has never been refuted or overturned, several factors have been recognized in other cases which may be utilized to aid in the determination of whether an ingredient or component is "in part of" an article. These factors include the
commercial utility/purpose of the component, the effect on salability, consumer preference, and the relevant trade's recognition of the importance of the use of the ingredient or component. Our decision of April 27, 1989, supra.

The braid that is present on the handbags in question does not satisfy the rather strict test formulated in Cavalier and Aceto. The amount of braid present in the handles, and in the trim of sample 24551, is a very small percentage of the overall material of the handbag. The primary function of the handbag, to carry items, can be accomplished without the use of the shoulder strap at all, and certainly can be accomplished with the use of a shoulder strap other than the braided type. The fact that there are several alternatives to the braided handle, some of which are preferred by some consumers over braid, further demonstrates that the braid is not essential to the primary function of the handbag.

Failing that important test, it must be shown that somehow the factors developed in other cases are present to the extent that the subject handbags may be found to be "in part of" braid. In your Request for Binding Tariff Classification Ruling, the alleged advantages of braided handles are discussed. The primary focus of the argument is that the advantages of the braided handle increases the salability of the handbags that possess such a handle, and demonstrates the "commercial significance" and "commercial utility" of the braid. Therefore, you contend, the handbags must be classifiable as "in part of braid." In discussing the braided handles, you state that:

Its look comports with the look of the bag itself. In keeping with the bag, it is light, has a rich texture, and takes dye properly so that it will be of the same color and hue as the material of the handbag. It is soft and pliable, giving it a warm, comfortable texture to the user. Because of its pliability, it will not crease, which would detract from its appearance. Braided handles increase the versatility of the evening bag. Because it is pliable and can also be folded into a relatively small volume, it is often placed inside the bag when the bag is used, allowing the bag to be used not only as a shoulder strap bag but also as a "clutch" and to be held in the hand. Request for Binding Tariff Classification Ruling on Behalf of the Fashion Accessories Shippers Association, Inc. Regarding Various Styles of Evening Handbags, November 10, 1989, p.15.

Mr. Lester Sebold, president of Magid Handbags Ltd. states that "The braided handle gives the bags the necessary elegant look." Affidavit of Mr. Lester Sebold (October 9, 1989), p.1.

Examination of the samples submitted, however, does not
support the contention of obvious superiority of the braided handles. This is particularly evident when the comparison is made with the so-called "self" handles. The "self" handles are so named because they are constructed from the same material as the bag to which they are attached. It is thus axiomatic, and obvious from examination, that they match the bag perfectly and do not have to be dyed to do so. The "self" handles are also quite elegant in appearance and are lightweight. These handles fold up nicely and occupy a minimum amount of space in the handbag. They appear quite graceful.

It is also argued that "self" handles "are relatively difficult to produce because the edges of the fabric must be turned inside and sewn down to prevent fraying at the edges. Because of this and the narrow width of the handles, there are quality control problems not experienced in the production of braided handles -- we encounter uneven stitching and puckering." Sebold Affidavit, at p.1.

Examination of the samples submitted does not reveal any extensive fraying or creasing, including the bags that were shipped with the "self" handles folded up inside the bags. What little creasing may be present in some of the "self" handles does not significantly detract from the appearance of the bags. Any uneven stitching or puckering in the small stitches utilized in the handles, if present, would not be readily apparent to the typical consumer and thus would not decrease salability. You did not provide any evidence concerning the steps necessary to produce braided handles, although, as discussed herein, braided handles must be dyed, a step that is not necessary when "self" handles are utilized. Assuming arguendo that braided handles are easier to produce than "self" handles, it is noted that "ease of production" of a component or ingredient is not listed as an important factor in the prior rulings and decisions.

Thus, it seems that the advantages of braided handles, as would be perceived by consumers, are not very obvious if they exist at all. The evidence that is provided to demonstrate that handbags with braided handles have indeed demonstrated superior salability is not convincing. It is also important to remember that having the effect of increasing salability, does not, alone, necessarily validate the classification of a component or ingredient as being "in part of" the primary article. See United States v. Cavalier Shipping Co., Inc., 60 CCPA 152, 157, C.A.D. 1103, 478 F.2d 1256,1260 (1973), where the Court of Customs and Patent Appeals stated in the context of classifying chemical mixtures that "we cannot reconcile the expressed intention with respect to the meaning of "in part" in the TSUS with the restricted concept that any purposeful addition of a benzenoid product, be it to preserve life or to enhance
salability, must render the article "in part" of that product", quoted in Bantam Travel Wear v. United States, Slip Op. 87-22 (decision on summary judgement motion, Ct. Int'l Trade, decided February 27, 1987) and Slip Op.87-131 (decision subsequent to litigation) (1987).

The argument is made that the "appearance of these items and their ability to fit in with apparel styling trends" is the primary function of the bags rather than the utilitarian use of carrying objects. Affidavit of Stuart Plotkin (October 25, 1989), at p.1. If an argument is made under this theory, the Cavalier and Aceto tests again must be examined, to explore the importance of the braid in this alternative primary function. As discussed previously, the handbags do not seem to suffer any appearance degradation when shoulder straps of alternative construction are utilized; Once again, the Cavalier and Aceto tests are not satisfied. Moreover, it is Customs position that appearance is only a secondary function of these handbags.

The second issue is whether the essential character of styles 242 and 248 is imparted by textile or the glass bead work. GRI 1 provides that classification shall be determined according to the terms of the headings and any relevant section or chapter notes. GRI 2(b), HTSUSA, provides in part that "[t]he classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3".

Evening bags having an outer surface of textile materials are classifiable under heading 4202, HTSUSA, while evening bags having an outer surface of glass beads are classifiable under heading 7018, HTSUSA. When goods are prima facie classifiable under two or more headings or subheadings in the HTSUSA, classification must be determined based on the sequential application of the principles set out in GRI 3, HTSUSA, which reads in pertinent part as follows:

3. When, by application of Rule 2(b) or for any other reason, goods are prima facie classifiable under two or more headings, classification shall be effected 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.

Inasmuch as the outer surfaces of the evening bags consist of textile material and plastic beads, it is necessary to determine that material which imparts the essential character to the outer surface pursuant to GRI 3(b), HTSUSA, supra.

The Explanatory Notes for GRI 3(b), HTSUSA, state in pertinent part as follows:

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, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.

It is noted that the outer surface of style 248 is predominantly glass beads. Indeed, the visible portion of the handbag as it would normally appear in public, with the flap snapped, is 90% covered with glass beads. The outer surface of style 242, however, is predominantly textile. It remains Customs position that physical measurement of the component materials of the outer surface is very important in arriving at the determination of essential character.

The essential character of style 248 is imparted by the glass beads. Style 248 is therefore classifiable under subheading 7018.90.50, HTSUSA, as an article of glass beads.

The essential character of style 242 is imparted by the textile which provides an important contribution to the appearance of the handbag. The textile covers approximately 70% of the outer surface and is only decorated by the glass beads. The Explanatory Notes for heading 7018, HTSUSA, contain an exclusion for "Handbags and similar articles of leather or fabric, decorated with glass beads, imitation pearls or imitation precious or semi-precious stones (heading 42.02)." It is clear
that this handbag is properly classifiable under heading 4202, HTSUSA.

HOLDING:

The evening bags designated as styles 24551, 6070A and 242, are classifiable under subheading 4202.22.8050, HTSUSA, which provides for handbags, whether or not with shoulder strap, including those without handle: with outer surface of textile materials: of man-made fibers, textile category 670, and dutiable at the rate of 20 percent ad valorem.

The evening bag designated as style 248 is classifiable under subheading 7018.90.50, HTSUSA, as "Glass beads, imitation pearls...and similar glass smallwares and articles thereof...Other" and is dutiable at a rate of 6.6 percent ad valorem. If this evening bag is the product of Macau, it would be entitled to free entry under the Generalized System of Preferences, if otherwise qualified.

Styles 242 and 248 are determined not to be "in part of" braid for the same reasons discussed in the analysis of Styles 24551 and 6070A.

Sincerely,

John Durant, Director

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