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HQ 961240




September 25, 1998

CLA-2 RR:CR:TE 961240 GGD

CATEGORY: CLASSIFICATION

TARIFF NO.: 6307.90.9989

Mr. Jerome Berger
Circle International, Inc.
540 Rockaway Avenue
Valley Stream, New York 11581

RE: Insulated Cooler Bag with AM/FM Radio; SGI, Incorporated v. United States, 122 F.3d 1468 (Fed. Cir. 1997); Cooler Bags with Outer Surface of Fabric-backed, Compact Plastics

Dear Mr. Berger:

This letter is in response to your request of November 21, 1997, on behalf of your client, Sun Hill Industries, Inc., concerning the classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of a soft-sided, insulated cooler bag with a built-in AM/FM radio, manufactured in China. A sample was submitted with your request.

FACTS:

The sample article, identified by stock number A655 and described as "Cool Sounds," is a portable, soft-sided, insulated cooler bag with a battery-operated, AM/FM radio built into a zippered compartment within the top flap. The exterior portion of the speaker, as well as 3 knobs and a headphone jack, are located on the outer surface of the top flap. The article measures approximately 12-1/2 inches in width by 7-1/4 inches in depth by 8 inches in height. In addition to the radio compartment, the bag has 1 main insulated compartment with a zippered closure, 2 webbed textile carrying handles, and a small exterior front pocket. The outer layer of the bag is composed of a nylon woven fabric that has been coated, covered or laminated
with a non-cellular (compact) plastic. The plastic surface of this outer layer faces outward. The bag's inner layer is a lining composed of plastic sheeting. The middle layer of the bag is composed of 2 sheets of plastic foam, each of which measures approximately 1/8 inch in thickness and functions to insulate and cushion contents. The complete article is primarily designed to store and preserve food and/or beverages.

ISSUE:

Whether the portable, soft-sided, insulated cooler bag with built-in AM/FM radio is classified under heading 4202, HTSUS, as a container used to organize, store, protect and carry various items; or is classified under heading 6307, HTSUS, as an other made up (textile) article with outer surface of fabric-backed compact plastics, to which the principles of the decision in SGI, Incorporated v. United States apply.

LAW AND ANALYSIS:

Classification under the HTSUS 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.

In Headquarters Ruling Letter (HQ) 082105, issued April 18, 1988, this office classified an item that was substantially similar to the "Cool Sounds" article under the HTSUS, since the HTSUS was scheduled to replace the former Tariff Schedules of the United States (TSUS) on January 1, 1989. Applying the GRI, it was found that that cooler bag and radio comprised a composite article. We cited to GRI 3(b), which states in pertinent part:

Composite goods...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.

It was determined that the bag component, particularly the woven nylon outer layer of the bag, imparted the article's essential character. The cooler bag with built-in radio was thus classified in subheading 4202.92.3030, HTSUSA.

The classification of certain portable, soft-sided, insulated cooler bags with outer surface of plastics, was recently 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 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), by which the principles of the CAFC's decision were expressly extended to portable, hard or soft-sided, insulated coolers and similar insulated containers with outer surface of plastics or with outer surface of textile materials (the latter of which are classified in subheading 6307.90.9905, 6307.90.9907, or 6307.90.9909, HTSUSA, depending upon whether the article's outer surface is composed of cotton, man-made fibers, or other textile materials, respectively); and to such articles that feature exterior or interior pockets, webbing, straps, etc., provided that the additional features do not alter the container's primary purpose to store and preserve food and/or beverages.

On September 10, 1998, an additional instruction was issued to Customs field personnel (and approved for dissemination to members of the importing community), by which the principles of the CAFC's decision were expressly extended to foodstuff-related, insulated containers whose exterior layer is composed of a
textile fabric that is coated, covered or laminated with compact plastics, with the plastic surface of the layer facing outward. Such containers are classified in subheading 6307.90.9989, HTSUSA, a provision which is currently not subject to quota/visa requirements.

In light of the principles of the SGI decision, the instructions noted above, and the fact that the "Cool Sounds" cooler bag has an outer layer that is essentially composed of fabric-backed compact plastics, the article is classified in subheading 6307.90.9989, HTSUSA.

HOLDING:

The portable, soft-sided, insulated cooler bag with built-in AM/FM radio, described as "Cool Sounds" and further identified by stock no. A655, is classified in subheading 6307.90.9989, HTSUSA, the provision for "Other made up articles, including dress patterns: Other: Other: Other, Other: Other." The general column one duty rate is 7 percent ad valorem.

Sincerely,

John Durant, Director
Commercial Rulings Division

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