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HQ 964365




June 28, 2001

CLA-2 RR:CR:GC 964365 GOB

CATEGORY: CLASSIFICATION

TARIFF NO.: 3923.90.00

Beth C. Ring
Sandler, Travis & Rosenberg, P.A.
551 Fifth Avenue
New York, NY 10176

RE: Plastic hangers; HQ 964963

Dear Ms. Ring:

This is in reply to your submissions of April 10, 2000, and February 21, 2001, on behalf of A&E Products Group L.P. (“A&E”) in which you seek internal advice with respect to the classification, under the Harmonized Tariff Schedule of the United States (“HTSUS”), of certain plastic hangers.

FACTS:

You describe the key facts as follows:

A&E imports plastic hangers from Hong Kong and Korea that are sold exclusively for the conveyance (shipping) of garments. The subject hangers are designed to convey garment bottoms. They are constructed of plastic with a pinch clip at each end, and a metal hanger hook at the center of the hanger ...

The subject hangers are substantially identical to those the subject of the Sears ruling [HQ 961973 dated August 13, 1999] ..., which concerned classification of the hangers imported with garments. These hangers were also the subject of HQ 114360 dated June 18, 1998 issued to FRM (which has since been acquired by A&E), which held them to be classified as instruments of international traffic under HTSUS subheading 9803.00.50 after they have already been imported, exported, and upon return to the United States holding garments, providing compliance with the applicable regulations under that provision. The instant ruling request concerns the antecedent life of these hangers, i.e., their original importation into the United States without garments from their country of origin prior to being sold to Sears (and other garment vendors) as part of a hanger “recycle’ program, as described in the Sears ruling. Both the Sears and FRM rulings describe the subject hangers as durable and capable of reuse.

The product numbers of the hangers are 6008, 6010, 6012, 6014, 6208, 6210, 6212, and 6214.

You claim that the hangers described in HQ 961973 should be classified in subheading 3923.90.00, HTSUS, as “Articles for the conveyance or packing of goods, of plastics ... : ... Other” rather than in subheading 3926.90.98, HTSUS, as: “Other articles of plastics ... : ... Other: ... Other.”

At oral conference on January 9, 2001, we requested that you submit information with respect to the principal use of the hangers. By letter dated February 21, 2001, you provided an affidavit of the president of A&E who states in pertinent part as follows:

We believe A&E is the largest plastic garment hanger supplier in the United States. A&E’s only business is plastic hangers and ancillary trim items. Approximately ninety (90) percent of A&E’s sales consist of plastic garment hangers that are sold to garment manufacturers both in the United States and abroad for the purposes of conveying garments to their ultimate retail destination ... Approximately ten (10) percent of A&E’s sales are hangers sold to retailers for the purpose of hanging garments in their distribution centers for conveyance to their stores.

The principal use of the A&E’s plastic garment hangers is for “garment on hanger” (“GOH”) programs created by most major U.S. retailers ... ...
Since A&E’s plastic garment hangers are principally sold to garment manufacturers for transporting and conveying garments to the ultimate retailer for their GOH programs, the garments are placed on the hangers by the manufacturer, and, in the case of foreign garment manufacturing, delivered to the ocean carrier for hanging on permanently affixed racks on the container ... Upon arrival at the U.S. port of destination, the container is loaded onto a truck or rail bed for delivery to the customer’s distribution center or warehouse. Upon removal from the container, the garments on hangers are removed from the containers and placed on the customer’s own racks for transportation to the stores for sale.

You claim that because A&E is the largest plastic garment hanger supplier in the United States, the principal use of its hangers establishes the principal use in the United States. The ultimate purchasers of the hangers are principally commercial garment manufacturers who use the hangers to transport garments from one location to another. The hangers are not normally sold for purposes other than the conveyance of goods. They are not sold to consumers.

ISSUE:

What is the tariff classification of the described plastic hangers?

LAW AND ANALYSIS:

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI’s”). 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’s may then be applied.

The Harmonized Commodity Description and Coding System Explanatory Notes (“EN’s”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the EN’s provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80.

The HTSUS provisions under consideration are as follows:

3923 Articles for the conveyance or packing of goods, of plastics ... :

3923.90.00 Other

3926 Other articles of plastics ... :

3926.90 Other:

3926.90.98 Other.

GRI 5(b), HTSUS, provides as follows:

Subject to the provisions of rule 5(a) above [which are not pertinent here], packing materials and packing containers entered with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use.

EN 39.23 provides in pertinent part that “[t]his heading covers all articles of plastics commonly used for the packing or conveyance of all kinds of products.” EN 39.26 provides in pertinent part that “[t]his heading covers articles, not elsewhere specified or included, of plastics ...”

Additional U.S. Rule of Interpretation 1 (a), HTSUS, provides as follows:

1. In the absence of special language or context which otherwise requires-

(a) a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use.

In HQ 961973, we held as follows:

The hangers are "clearly suitable for repetitive use" and, accordingly, are classifiable separately from the garments with which they are entered under GRI 5(b), provided that : (1) they are of relatively substantial construction; and (2) a substantial proportion of which is forwarded to another company which commingles them with new hangers and sells them to garment vendors (which may include the original importer) for use in packing, shipping, and transportation of garments. They are classified as other articles of plastics in subheading 3926.90.98, HTSUS.

In classifying the hangers in HQ 961973 in subheading 3926.90.98, HTSUS, we stated that it is Customs position that the articles of heading 3923 are “to be used primarily as temporary packaging for the merchandise contained therein.” Because the hangers were deemed not used as temporary packaging, we concluded that they were not described in heading 3923.

In HQ 964963 dated June 19, 2001 (scheduled to be published in the Customs Bulletin of July 4, 2001), we modified HQ 961973 with respect to the classification of the plastic hangers. In finding that the hangers were classified in subheading 3923.90.00, HTSUS, we stated:

We have reconsidered the scope of heading 3923, HTSUS. We now believe that there is no requirement that goods of heading 3923, HTSUS, be used primarily as temporary packaging. Further, heading 3923, HTSUS, does not exclude goods that are suitable for repetitive use ... ...
It is Customs position that the principal use of the hangers is for the conveyance of garments. The hangers are substantial enough to be used repetitively for the conveyance of garments. Accordingly, we find that the hangers are described in heading 3923, HTSUS, which covers articles for the conveyance or packing of goods. Therefore, the hangers are not described in heading 3926, HTSUS, because that heading covers articles not elsewhere specified or included. See EN 39.26, excerpted above. The articles at issue here are included in heading 3923, HTSUS. We note additionally that heading 3923 is more specific than heading 3926.

The hangers at issue here are very similar to the hangers in HQ 964963/HQ 961973. We believe that you have satisfactorily established that the hangers are principally used for the conveyance of goods.

Accordingly, we find that the hangers at issue here are provided for in heading 3923, HTSUS, and are classified in subheading 3923.90.00, HTSUS, as: "Articles for the conveyance or packing of goods, of plastics ... : ... Other."

HOLDING:

The hangers at issue (A&E product number 6008, 6010, 6012, 6014, 6208, 6210, 6212, and 6214) are classified in subheading 3923.90.00, HTSUS, as: "Articles for the conveyance or packing of goods, of plastics ... : ... Other."

Sincerely,

John Durant, Director
Commercial Rulings Division

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