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HQ 087079


June 12, 1990

CLA-2 CO:R:C:G 087079 WAW

CATEGORY: CLASSIFICATION

TARIFF NO.: 4819.40.0040

Mr. Mark McLaughlin
The Pack America Corp.
630 Fifth Avenue
Suite 2260
New York, N.Y. 10111

RE: Paper Bags; Modification of Headquarters Ruling Letter (HRL) 084847

Dear Mr. McLaughlin:

This letter is in response to your inquiry, dated April 20, 1990, concerning the tariff classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of paper shopping bags. Samples of the subject merchandise were submitted along with your ruling request.

FACTS:

The merchandise the subject of this ruling consists of flat- bottomed paper shopping bags, designated as OF-J bags, covered with a plastic laminate or overlay. The bags are manufactured in eight standard sizes and are decorated on both sides with various multicolored motifs. However, the importer primarily manufactures the paper shopping bag in the following four sizes expressed in inches: 16 X 6 X 19, 12-2/5 X 4-3/8 X 11, 11 X 4- 3/8 X 13, 8-5/8 X 4-1/2 X 10-5/8. Two reinforced braided textile cords are attached to the upper portion of the bag as handles. The importer has stated in his submission that the shopping bags are designed for resale and marketed as an alternative to wrapping paper. The sample merchandise will be imported from Japan.

ISSUE:

Whether the laminated paper shopping bags are classifiable as other sacks and bags of paper under Heading 4819, HTSUSA, or as other articles of paper under Heading 4823, HTSUSA.

LAW AND ANALYSIS:

The General Rules of Interpretation (GRI's) set forth the manner in which merchandise is to be classified under the HTSUSA. GRI 1 requires that classification be determined first according to the terms of the headings of the tariff and any relative section or chapter notes and, unless otherwise required, according to the remaining GRI's, taken in order. With regard to the instant shopping bags, the two headings at issue are the following:

(1) 4819, Cartons, boxes, cases, bags and other packing containers, of paper, paperboard, cellulose wadding or webs of cellulose fibers; box files, letter trays and similar articles, of paper or paperboard of a kind used in offices, shops or the like.

(2) 4823, Other paper, paperboard, cellulose wadding and webs of cellulose fibers, cut to size or shape; other articles of paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibers.

Since the two headings enumerated above appear to describe the subject merchandise, classification cannot be determined by applying GRI 1 alone, and reference to the subsequent GRI's is necessary.

GRI 2(a) and GRI 2(b) are not applicable in this case, since the merchandise is neither an incomplete or unfinished article, nor does it consist of a mixture or combination of materials or substances. However, when goods are prima facie classifiable under two or more headings, as in the instant case, GRI 3 is applicable. GRI 3(a) provides the following:

(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. . . .

Therefore, the inquiry in this case centers on the determination of which of the competing provisions enumerated above most accurately describes the sample paper shopping bags.

The Explanatory Notes constitute the official interpretation of the tariff at the international level. The Explanatory Notes to Heading 4819, HTSUSA, state, in pertinent part, that this heading covers cartons, boxes, cases, bags and other packing containers. These notes also state:

This group covers containers of various kinds and sizes generally used for the packing, transport, storage or sale of merchandise, whether or not also having a decorative value. The heading includes cartons, boxes, cases, bags, cones, packets, sacks, paperboard drums (containers), whether manufactured by rolling or by any other method. . . .

The articles of this group may be printed, e.g., with the name of the merchant, directions for use, illustrations. . . .

Based on the above Explanatory Notes and the terms of Heading 4819, HTSUSA, it is clear that this heading accurately describes the subject merchandise and that Heading 4823, HTSUSA, being in the nature of a basket provision for "Other" paper, would only describe the merchandise in the absence of a specific provision. The instant bags are manufactured with various decorative motifs on both sides and are marketed to retail stores as an alternative to wrapping paper. In additiion, all of the bags have reinforced handles and are of sufficient size to be used as a means of carrying articles. Accordingly, it is Customs view that an article, such as the sample merchandise, which may be sold at retail as a form of wrapping paper and is of ample size and construction to hold and transport articles, is properly classifiable as a paper bag or sack within Heading 4819, HTSUSA.

In two Headquarters Ruling Letters (HRL) Customs has classified similar paper shopping bags in separate headings. In HRL 084847, dated October 6, 1989, Customs held that similar coated paper bags, which are sold as merchandise, and used as a form of wrapping paper are classified under Heading 4823, HTSUSA, as other articles of coated paper. In HRL 085559, dated April 13, 1990, Customs held that paper shopping bags, which are of ample size to facilitate the packing, transport or sale of merchandise, are classified under Heading 4819, HTSUSA. In the instant case, the importer has stated that the paper bags will be sold as merchandise and used as a form of wrapping paper, thus falling within the criteria of HRL 084847. However, it is clear that since the sample merchandise is of ample size and construction to facilitate the storage and transportation of merchandise, it falls within the scope of HRL 085559. It is our position that despite the fact that the sample shopping bags may be sold separately as merchandise, they still qualify as a sack or bag under Heading 4819, HTSUSA, provided that they are suitable for the "packing, transport, storage or sale of merchandise."

HOLDING:

In view of the foregoing analysis, it is Customs position that the paper shopping bags with a base width of less than 40 cm. are suitable for the transportation and storage of merchandise, and are properly classifiable under subheading 4819.40.0040, HTSUSA. Merchandise classified under this subheading is subject to a duty rate of 5.3 percent ad valorem.

HRL 084847 is hereby modified pursuant to 19 CFR 177.9(d).

Sincerely,

John Durant, Director

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