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HQ 960784




September 28, 1998

CLA-2 RR:CR:TE 960974 GGD

CATEGORY: CLASSIFICATION

TARIFF NO.: 3924.10.5000

Lynn S. Baker, Esquire
Baker & McKenzie
130 East Randolph Drive
Chicago, Illinois 60601

Dear Ms. Baker:

This is in response to your request dated July 18, 1997, on behalf of your client, Outer Circle Products Limited (OCP), for reconsideration and modification of seven District (now Port) Rulings previously issued to OCP concerning the classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of various styles of insulated bags with outer surfaces composed essentially of polyvinyl chloride (PVC) that were manufactured in China and designed to contain food and/or beverages and other dining accessories.

In District (now Port) Ruling Letters DD 814421, DD 814422, DD 814423, DD 814424, DD 814426, DD 814427 (all issued September 22, 1995), and DD 816522 (issued October 6, 1995), certain third parties were advised on behalf of OCP, that the insulated bags subject to those rulings were classified in subheading 4202.92.4500, HTSUSA. You have based your request for modification of the rulings upon a decision by the Court of International Trade (CIT) in SGI, Incorporated v. United States, 917 F. Supp. 822, Slip Op. 96-22 (1996), which held that such merchandise was properly classified in subheading 4202.92.90, HTSUS. On appeal, however, the CIT's decision was reversed 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 focused on whether food or beverages were involved with the eo nomine exemplars set forth in the tariff
provisions at issue and, without discussion of heading 4202 exemplars that organize, store, protect, and/or carry food or beverages, the CAFC held that the appropriate classification for the cooler bags was subheading 3924.10.50, HTSUS, the provision for "Tableware, kitchenware, other household articles...of plastics: Tableware and kitchenware: Other." The Court stated that this classification "does encompass exemplars that are ejusdem generis with the coolers because their purpose is to contain food and beverages." The exemplars (specifically enumerated in subheading 3924.10.10) which the Court noted in particular were the "various household containers for foodstuffs such as salt, pepper, mustard, and ketchup dispensers and serving pieces for food."

This office concluded that the CAFC's decision in SGI should be implemented. Instructions were issued to Customs field personnel on March 18, 1998 (and approved for dissemination to members of the importing community), which expressly extended the principles of the CAFC's decision to portable, hard or soft-sided, insulated coolers and similar insulated containers with outer surface of plastics or with outer surfaces composed of textile materials (the latter of which are classified in subheading 6307.90.99, HTSUS); and to such articles that feature exterior or interior pockets, webbing, straps, etc., for the purpose of containing items in addition to foodstuffs, provided that the additional features do not alter the container's primary purpose to store and preserve food and/or beverages.

As a courtesy, this letter is sent to advise you that any rulings issued by Customs under the provisions of 19 CFR 174 or 177 (including the subject rulings issued to OCP), that are inconsistent with the principles of the SGI decision and the instructions implementing that decision, are revoked or modified by operation of law. In this instance, therefore, DD 814421, DD 814422, DD 814423, DD 814424, DD 814426, DD 814427 (all issued September 22, 1995), and DD 816522 (issued October 6, 1995) are revoked by operation of law.

The insulated cooler bags subject to the six rulings issued September 22, 1995, are classified in subheading 3924.10.50, HTSUS, the provision for "Tableware, kitchenware, other household articles...of plastics: Tableware and kitchenware: Other." Although the insulated cooler bag subject to DD 816522 (issued October 6, 1995) is described in the ruling as having an outer surface composed, in part, of nylon textile materials, the cooler bag was classified in subheading 4202.92.4500, HTSUSA, a
provision applicable to certain articles with an outer surface composition of other than textile materials. We therefore suggest that you request a new binding ruling for the cooler bag subject to DD 816522.

Under the Customs Modernization provisions of the NAFTA Implementation Act, it is the responsibility of the importer to classify and appraise merchandise. The U.S. Customs Service is in the spirit of informed compliance notifying you of the consequences of the SGI case.

Sincerely,

John Durant, Director
Commercial Rulings Division

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