HQ W967935 - AFR of Protest No. 3901-04-101349; Vinyl Bags - United States International Trade Commision Rulings

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HQ W967935

March 13, 2007

CLA-2 RR:CTF:TCM W967935 ADK

CATEGORY: CLASSIFICATION

TARIFF NO.: 4202.92.4500

Port Director
United States Customs and Border Protection 610 South Canal Street
Room 306
Chicago, Illinois 60607

RE: AFR of Protest No. 3901-04-101349; Vinyl Bags

Dear Port Director:

The following is our decision regarding the Application for Further Review (“AFR”) of Protest No. 3901-04-101349, timely filed on behalf of Great Lakes Bag and Vinyl (“GLBV”), a Division of the Morton Group of Highland Park, Illinois, concerning the classification of certain vinyl bags under the Harmonized Tariff Schedule of the United States (HTSUS). We regret the delay in responding to your inquiry.

FACTS:

As a threshold matter, we note that the samples submitted to United States Customs and Border Protection (CBP) are not identified as being from any protested entry but instead are representative of the goods as entered. This decision is therefore based on these representative samples, descriptions provided by counsel and information obtained from GLBV’s website
http://www.vinylbags.com/.

The samples consist of various models of bags constructed of PVC sheeting. No measurements are provided, but GLBV’s website indicates that none of the bags is less than 6 mils thick. While some of the bags are cylindrical or shaped like envelopes, the majority of them are square or rectangular. Counsel informed CBP that GLBV imports serve as packaging for the toy, travel and health and beauty industries. The compositions, dimensions, thicknesses, and closures of the bags vary.

The vinyl bags were entered on various dates in 2003 and 2004 under subheading 3923.29, HTSUS, which provides for: “Articles for the conveyance or packing of goods, of plastics;: Sacks and bags (including cones): Of other plastics”. On July 2, 2004, these entries were liquidated under subheading 4202.92.4500, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for, inter alia: “traveling bags, toiletry bags, shopping bags and similar containers, of sheeting of plastics, of textile materials : Other: With outer surface of sheeting of plastic or of textile materials: Travel, sports and similar bags: Other.” A protest was timely filed on September 29, 2004.

ISSUE:

Were the subject PVC bags properly classified in heading 4202, HTSUS, which provides for toiletry bags and similar containers?

LAW AND ANALYSIS:

Initially, we note that the matter is protestable under 19 U.S.C. § 1514(a)(2) as a decision on classification. The protest was timely filed, within 90 days of liquidation of the entries. Further Review of Protest No. 3901-04-101349 was properly accorded to protestant pursuant to 19 C.F.R. § 174.24. In accordance with § 174.24(c), the decision against which the protest was filed involves matters previously ruled upon by the Commissioner of Customs or his designee or by the Customs courts but facts are alleged or legal arguments presented which were not considered at the time of the original ruling.

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). 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 GRIs 2 through 6 may then be applied in order.

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the HTSUS. While not legally binding nor dispositive, the ENs 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.

At issue is whether the subject merchandise is classifiable under heading 4202, HTSUS, as goods of the same “class or kind” of merchandise as the named exemplars. The HTSUS provisions under consideration are as follows:

3923 Articles for the conveyance or packing of goods, of plastics: stoppers, lids, caps and other closures, of plastics:

Sacks and bags (including cones):

3923.29.0000 Of other plastics ..

4202 Trunks, suitcases, vanity cases, attaché cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases, and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper.

Other:

4202.92 With outer surface of sheeting of plastic or of textile materials: Travel, sports and similar bags:

4202.92.4500 Other ..

Chapter 39, Note 2 provides, in pertinent part:

This chapter does not cover:

In the HTSUS 2007, this note has been changed to 2 (m). trunks, suitcases, handbags or other containers of heading 4202.

Chapter 42, Note 2(A) provides:

In addition to the provisions of note 1, above, heading 4202 does not cover:

Bags made of sheeting of plastics, whether or not printed, with handles, not designed for prolonged use (heading 3923).

Goods classifiable under heading 4202, HTSUS, are prima facie excluded from chapter 39, HTSUS. See Chapter 39, Note 2(ij), HTSUS 2004. Classification of the subject merchandise, therefore, requires a threshold analysis of heading 4202, HTSUS. If the goods are classifiable under that heading, an analysis of 3923 is unnecessary.

Classification of merchandise under heading 4202, HTSUS, requires a two-step inquiry. By application of the canon of construction known as ejusdem generis, we must first determine whether the vinyl bags are of the same class or kind of merchandise as the exemplars named in the heading. The Court of International Trade (CIT) has stated that ejusdem generis, which literally means, “of the same class or kind,” teaches that “where particular words of description are followed by general terms, the latter will be regarded as referring to things of a like class with those particularly described.” Nissho-Iwai American Corp. v. United States (Nissho), 10 CIT 154, 156 (1986). “As applicable to classification cases, ejusdem generis requires that the imported merchandise possess the essential characteristics or purposes that unite the articles enumerated eo nomine in order to be classified under the general terms.” Id. at 157. At issue is whether the subject PVC bags possess the same essential characteristics as the named exemplars in heading 4202, HTSUS. If they do, we must then determine whether they are designed for prolonged use, as required by Chapter 42, Note 2 (A)(a).

In Totes, Incorporated v. United States, the CIT addressed the issue of goods classifiable in heading 4202, HTSUS. 18 CIT 919, 920, 865 F. Supp. 867 (1994). According to the Court, if the subject imports had the ability to “organize, store, protect and carry various items,” they were carrying containers as classified in heading 4202, HTSUS. Id. at 924. Counsel argues that “in no realistic manner can [GLBV’s bags] be construed to organize and protect the various items sold at retail. The bags are generally small and do not have numerous pockets so as to organize any of its contents.” (Supplemental Legal Argument Supporting Application for Further Review, page 8). Counsel’s argument relies on the fact that the GLBV bags do not contain the same organizational features as the Trunk Organizers in Totes. In that case, the trunk organizers could be subdivided “into as many as three discrete compartments by inserting into the bag the accompanying PVC covered cardboard dividers.” 865 F.Supp 867, 921. While true that the GLBV bags do not feature any such subdivisions, they are nonetheless capable of organizing their products. In fact, one sample submitted by GLBV contains a rectangular, plastic bottle separator. By using the bottle separator, the retailer will both organize the contents of the PVC bag and enable the customer to better identify the products contained therein. Even those bags that do not contain such organizational devices, however, feature the essential characteristics of heading 4202, HTSUS, exemplars. Most of the bags are all small enough that individualized compartments are unnecessary. Unlike the trunk organizers in Totes, the articles contained within the GLBV bags will not easily be displaced.

Furthermore, the bags are capable of storing, protecting and carrying various items. All of the samples provided contain some sort of closure, including plastic or metal zippers, drawstrings or Velcro™ type straps. These closures enable the bags to house items securely. The fact that the bags are all made from PVC, and are thus waterproof, is further evidence that they are capable of protecting and storing items. In fact, one of the points noted in Totes was that the trunk organizers were “impervious to penetration by oil or water.” Id. at 921. The same is true of the subject merchandise. Finally, many of the bags feature handles – either of nylon or molded PVC. These handles are prima facie evidence that the bags, and products within them, are to be carried. The GLBV bags possess the essential characteristics enumerated by the Totes court. As a result, they are of the same class or kind of merchandise as the named exemplars.

We must next determine whether the bags are designed for prolonged use in accordance with chapter 42, Note 2(A)(a). In Headquarters Ruling (HQ) 962363, dated January 19, 2000, we were asked to examine note 2(A)(a) and clarify the meaning of “prolonged use.” We stated, in pertinent part:

[D]eterminations as to whetherplastic bags are ‘not designed for prolonged use’ are properly based upon whether or not a bag: 1) is of a kind normally sold at retail on its own merits as a traveling or toiletry bag; and 2) is of a kind normally sold at retail as packaging with contents.

Customs will additionally consider the thickness of a bag’s plastic sheeting as a factor in the classification of bags both sold on their own merits and sold as packaging. Customs has long classified under heading 4202, garment bags composed of embossed vinyl or PVC plastic sheeting which measures four mils or more in thickness, finding that such thickness usually denotes a durably constructed article that is designed for prolonged use and travel. (Emphasis added)

In response to the first element of this test – that the bags are of a kind normally sold at retail on their own merits -- counsel maintains that the bags are “of such limited construction and are so plain in appearance and in function that they cannot be realistically deemed to serve, or be sold, as travel or toiletry bags.” (10-11.) We disagree. Bags that are almost identical to the submitted
samples are commonly put up for retail sale. Market research indicates that many retailers sell clear PVC toiletry bags, either printed with individual logos or without any trademark at all Sephora Signature Clear Make-up Bag: www.sephora.com/browse/section.jhtml;jsessionid=M0H1CMYTPKXTZLAUCLCBXCQ?categoryId=S5100; Weekender Clear Cosmetic Bag: www.target.com/gp/detail.html/601-7407205-9440103?_encoding=UTF8&frombrowse=1&asin=B000A6ZGNA; Clear Makeup Carrying Case: www.cosmeticscop.com/shop/product.asp?CODE=SMBAG&PAGETYPE=A; Soho Cosmetic Bags: www.beautydeals.net/shop/list.html?categ=165.

In addition, we note that all of the GLBV bags are of a thickness that is suitable for repetitive use and all have closures that allow for repetitive use. See HQ W968181, dated October 3, 2006. Based on information provided by GLBV, even the thinnest of GLBV’s products is thicker than the 4 mils bright line threshold set for determination of prolonged use GLBV’s website indicates that the bags are between 0.15 – 0.20 mm, or 6-8 mills, thick. . GLBV’s claim that the bags are made from the “highest quality vinyl available” only serves to support the conclusion that the bags are designed for prolonged use http://www.vinylbags.com/Information2.asp?CISection=3&btn=4. Furthermore, none of the entered bags feature cutouts, hangers, tabs or odd-shapes which are all indicative of temporary use. See HQ 968181. Instead, the bags feature permanent closures. GLBV’s bags therefore satisfy the first requirement denoted in HQ 962363, that the bags are of the kind “normally sold at retail on its own merits as a traveling or toiletry bag.”

We note GLBV’s argument that the method of sealing the PVC bags affects durability. According to GLBV, bags that are heat sealed rather than stitched are not sufficiently sturdy to be “of a kind normally sold at retail” on their own merits. Heat sealing works when the polymer used is thermoplastic, which means it softens when heated and solidifies when cooled, essentially making the two sheets as one. It is virtually impossible to pull apart closures that have been heat-sealed. As a result, we do not consider the distinction between heat-sealing and stitching relevant to our determination.

The subject bags also satisfy the second requirement identified in HQ 962363, that the bags are of a kind normally sold at retail as packaging with contents. Counsel does not controvert this point. According to the GLBV website, the PVC bags are specifically intended to serve as packaging with contents. In fact, every single bag pictured on the website is depicted with products such as toiletries, make-up or toys. The subject merchandise therefore satisfies the two-prong test established in HQ 962363.

HOLDING:

For the foregoing reasons, the PVC bags are classifiable under heading 4202, HTSUS. Specifically, they are classifiable under subheading 4202.92.4500, HTSUSA, which provides, inter alia, for “traveling bags, toiletry bags, shopping bags and similar containers, of sheeting of plastics, of textile materials : Other: With outer surface of sheeting of plastic or of textile materials: Travel, sports and similar bags: Other.” The column one, general rate of duty at the time of entry was 20 percent ad valorem.

The protest should be DENIED. In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), you are to mail this decision, together with the Customs Form 19, to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director

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