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HQ 961515




July 9, 1998

CLA-2 RR:CR:TE 961515 GGD

CATEGORY: CLASSIFICATION

TARIFF NO.: 3924.10.50

Ms. Charlotte Gromberg
Alrod International, Inc.
500 North Nash Street
El Segundo, California 90245

RE: Portable, Soft-Sided, PVC, Insulated Lunch Bag; SGI, Incorporated v. United States, 122 F.3d 1468 (Fed. Cir. 1997); Outer Surface of Plastics

Dear Ms. Gromberg:

This letter is in response to your request of February 10, 1998, on behalf of your client, Lisa Frank, Inc., concerning the classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of a soft-sided, polyvinyl chloride (PVC), insulated lunch bag manufactured in China. A sample was submitted with your request.

FACTS:

The sample, identified as item number P1304, is a child's portable, soft-sided, insulated bag. The bag has an outer surface of PVC plastics and an inner lining that is composed of plastic sheeting. There is a thin layer of plastic foam insulation between the two layers. The bag measures approximately 6-1/2 inches in height by 8 inches in width by 5-1/2 inches in depth. The bag has a main compartment (which measures approximately 4-3/4 inches in height by 7-1/2 inches in width by 5 inches in depth) with a zippered closure that is similar in design to that of a bowling ball bag. The smaller, sandwich-sized compartment is below the larger compartment and has a zippered closure on three sides. The bag also has two nylon web carrying straps.

Although described as a "cooler," the bag is not well-suited to contain melting ice, and it leaks at the seams when water is added. Marketing information was submitted, however, which suggests that the bag is primarily designed to store and preserve food and/or beverages. In part, the literature states that: "This lunch tote is really fun - you can have lunch with all of your favorite Lisa Frank characters! There's even a neat little compartment on the bottom that can hold a sandwich or an ice pack." The bag's exterior is imprinted with colorful designs and pictures of small animals and toys.

ISSUE:

Whether the portable, soft-sided, PVC, insulated bag is classified under heading 4202, HTSUS, as a container used to organize, store, protect and carry various items; or is classified under heading 3924, HTSUS, as a container with outer surface of 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.

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), 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 in whole or in part 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. The instructions stated that lunch boxes, if not insulated, remain classified under heading 4202.

In light of the principles of the SGI decision and the instructions noted above, we find that the subject lunch bag with outer surface of plastics is an insulated containers whose primary purpose is to store and preserve food and/or beverages. As such, it is similar to the soft-sided insulated cooler bags that were subject to the decision by the CAFC in SGI. The bag is therefore classified in subheading 3924.10.50, HTSUS.

HOLDING:

The portable, soft-sided, PVC, insulated lunch bag identified by item no. P1304 is classified in subheading 3924.10.50, HTSUS, the provision for "Tableware, kitchenware, other household articles...of plastics: Tableware and kitchenware: Other." The general column one duty rate is 3.4 percent ad valorem.

Sincerely,

John Durant, Director
Commercial Rulings Division

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