CLA-2 RR:CR:TE 961712 GGD
Ms. B.J. Underwood
Circle International, Inc.
3275 Alum Creek Drive, Suite 200
Columbus, Ohio 43207
RE: Reconsideration of HQ 959668; Classification and Country of
Origin Determination for Cookware Carrying Cases; SGI,
Incorporated v. United States, 122 F.3d 1468 (Fed. Cir.
1997); 6307.90, HTSUS; 19 CFR 102.21(c)(2) and (e); Country
in Which Fabric Comprising the Good was Formed by Fabric-
making Process
Dear Ms. Underwood:
This is in response to your letter dated March 14, 1998, on
behalf of your client, Anchor Hocking Corp., requesting
reconsideration of Headquarters Ruling Letter (HQ) 959668, issued
September 17, 1996, and concerning country of origin and
classification determinations under the Harmonized Tariff
Schedule of the United States Annotated (HTSUSA) of carrying
cases for cookware which have been, and will continue to be,
imported into the United States on an ongoing basis on or after
July 1, 1996. With the request, samples were submitted for
examination.
FACTS:
In HQ 959668, issued September 17, 1996, you were advised on
behalf of Anchor Hocking Corp., that the insulated carrying cases
subject to that ruling were classified in subheading 4202.92.9040
(which has since been fragmented and changed to read
4202.92.9060), HTSUSA, the provision for "Trunks...briefcases...
camera cases...holsters and similar containers; traveling bags...
backpacks...shopping bags...bottle cases...and similar
-2-
containers...: Other: With outer surface of sheeting of plastic
or of textile materials: Other: Other, Other: Other." Based on
this classification and the fact that the subject merchandise had
been wholly assembled in a single country, that being China, the
country of origin was determined to be China. You have based
your request for reconsideration of HQ 959668 upon a decision by
the Court of Appeals for the Federal Circuit (CAFC) in SGI,
Incorporated v. United States, 122 F.3d 1468 (Fed. Cir. 1997).
The five insulated cookware carriers at issue, identified as
styles Z8196, Z8197, Z8198, Z8199, and Z8387, are either round or
rectangular in shape and each is manufactured to contain a
casserole dish of a specific size and shape. All of the cases
feature woven textile carrying straps and most also have woven
textile straps on the interior to secure the dish. Some of the
cases feature small interior pockets that are able to contain
items such as eating/serving utensils, napkins, etc. Some of the
cases have zipper closures while others close by means of hook
and loop fabric fasteners. The articles are primarily designed
to store and preserve food.
Four of the styles, i.e., Z8196, Z8197, Z8198, and Z8199,
are constructed with an outer layer composed of a woven nylon
fabric that has been coated, covered or laminated with a non-cellular (compact) plastic identified as polyvinyl chloride
(PVC). The plastic surface of this outer layer faces outward and
is embossed to resemble a textile material. The middle layer of
each case is composed of plastic foam, which functions to
insulate and cushion contents. The inner layer is a lining
composed of man-made textile materials.
Like the four styles above, style Z8387 has a middle layer
composed of plastic foam to insulate and cushion its contents.
The style differs from the other four cases, however, in several
ways. Style Z8387 is reversible, which creates two options for
its outer surface. In one option, the outer layer is composed of
a dyed, knit textile fabric that has been coated, covered or
laminated with a cellular plastic and the knit fabric is present
merely for reinforcing purposes. In the other option, the outer
layer is composed only of textile material - a plaid printed,
pile fabric of man-made fibers. Style Z8387 closes by means of
hook and loop fabric fasteners.
For purposes of determining the country of origin, the
manufacturing operations for all five styles are described as
follows:
-3-
CHINA, TAIWAN, JAPAN, AND HONG KONG
- materials are sourced (exterior flake 600D, interior 210
nylon, PE foam, sponge, PVC patch, clear PVC, thread, ink,
webbing, inside PVC label, and either zipper teeth and
zipper pull or hook and loop fabric fasteners).
CHINA
- cutting of fabric
- sewing and complete assembly;
- packing.
ISSUES:
1) Whether the insulated cases designed to carry cookware
are classified under heading 4202, HTSUS, as containers used to
organize, store, protect and carry various items; under heading
3924, HTSUS, as containers of plastics; or under heading 6307,
HTSUS, as other made up (textile) articles.
2) What is the country of origin of the cookware carrying
cases?
ISSUE 1: CLASSIFICATION
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.
As you have noted, the classification of certain portable,
soft-sided, insulated cooler bags with outer surface of plastics,
was examined by the Court of Appeals for the Federal Circuit
in SGI, Incorporated v. United States, 122 F.3d 1468 (Fed. Cir.
1997). The CAFC focused on whether food or beverages were
-4-
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 November 7, 1997, on March 18, 1998, and on
September 10, 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 (whose primary
purpose is to store and preserve food and/or beverages), with
outer surface of plastics, with outer surface of textile
materials (classified in subheading 6307.90.9905, 6307.90.9907,
or 6307.90.9909, HTSUSA, depending upon whether the outer surface
is composed of cotton, man-made fibers, or other textile
materials, respectively), and with an exterior layer composed of
a textile fabric that is coated, covered or laminated with
compact plastics, with the plastic surface facing outward
(classified in subheading 6307.90.9989, HTSUSA).
In HQ 960938, issued November 14, 1997, this office
reconsidered HQ 960184, dated September 4, 1997, in which an
"insulated casserole dish caddie bag" had been classified under
heading 4202.92.9060, HTSUSA. Since the insulated bag was
designed to carry a food container and a removable cold pack, we
concluded that the article was covered by the decision in SGI,
and that by operation of law, the CAFC's decision in SGI had
revoked HQ 960184. (We have recently become aware that the outer
layer of the "insulated casserole dish caddie bag" is composed
not of 100 percent PVC as had been claimed, but of a textile
fabric that is coated with PVC plastics, with the plastic surface
facing outward. Steps are currently being taken to modify HQ
960938 to reflect proper classification of the "insulated
casserole dish caddie bag" in subheading 6307.90.9989, HTSUSA.)
-5-
We find that each of the subject five styles of cookware
carriers is also covered by the principles of the SGI decision
and the instructions noted above. By operation of law, the
CAFC's decision in SGI effectively revoked HQ 959668.
Accordingly, the four cases whose outer layers are composed of
fabric-backed compact plastics, identified as styles Z8196,
Z8197, Z8198, and Z8199, are classified in subheading
6307.90.9989, HTSUSA, the provision for "Other made up articles,
including dress patterns: Other: Other: Other, Other: Other."
The provision is currently not subject to quota/visa
requirements.
With respect to reversible style Z8387, we first consider
the article when fabric-backed cellular plastics comprises its
optional outer layer, and whether this particular plastics/
textile combination constitutes a textile material for
classification purposes. The EN to chapter 39, HTS, state that
(except for certain wall or ceiling coverings) "the
classification of plastics and textile combinations is
essentially governed by Note 1(h) to Section XI, Note 3 to
Chapter 56 and Note 2 to Chapter 59." Among other goods, chapter
59, HTSUS, covers impregnated, coated, covered or laminated
textile fabrics. In pertinent part, Note 2(a) to chapter 59,
HTSUS, states that heading 5903 applies to:
Textile fabrics, impregnated, coated, covered or laminated
with plastics, whatever the weight per square meter and
whatever the nature of the plastic material (compact or
cellular), other than:
(5) Plates, sheets or strip of cellular plastics,
combined with textile fabric, where the textile fabric
is present merely for reinforcing purposes (chapter 39)
Based upon the explanatory and legal notes above, the material
which comprises the optional outer layer of cellular plastics
backed by textile fabric that is present merely for reinforcing
purposes, is classifiable under heading 3921, HTSUS, not as a
textile material, but as a sheet of cellular plastics (combined
with textile materials). In light of the decision in SGI, the
instructions implementing that decision, and HQ 960938, which
concluded that an insulated casserole dish was covered by the
decision in SGI, style Z8387 is prima facie classifiable as a
food container under heading 3924, HTSUS.
If style Z8387 was not reversible, however, and its outer
surface was the other optional outer layer, i.e., the layer
composed only of textile materials of man-made fibers, then
-6-
pursuant to the instructions implementing the decision in SGI,
style Z8387 would be classified in subheading 6307.90.9907,
HTSUSA. Therefore, reversible style Z8387 is also prima facie
classifiable under heading 6307, HTSUS. Since the case is
classifiable under both headings 3924 and 6307, it cannot be
classified solely by reference to GRI 1. We therefore look to
GRI 2(b), which in pertinent part states:
* * * The classification of goods consisting of more than
one material or substance shall be according to the
principles of rule 3.
When goods are prima facie classifiable under two or more
headings, GRI 3(a) directs, in pertinent part, that the headings
are regarded as equally specific when each heading refers to part
only of the materials or substances contained in mixed or
composite goods. Therefore, we next look to GRI 3(b), which
states in pertinent part:
Mixtures, composite goods consisting of different
materials...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.
In order to determine the essential character of the
article, we look to Explanatory Note VIII to GRI 3(b), which
provides the following guidance:
The factor which determines essential character will vary as
between different kinds of goods. It may, for example, be
determined by the nature of the material or component, its
bulk, quantity, weight or value, or by the role of a
constituent material in relation to the use of the goods.
We find that the optional outer layers of style Z8387 are
equally significant in nature, and in the role each material
plays in relation to the complete cookware carrying case.
Therefore, we next consider GRI 3(c), which states:
When goods cannot be classified by reference to 3(a) or
3(b), they shall be classified under the heading which
occurs last in numerical order among those which equally
merit consideration.
Since the heading which occurs last is heading 6307, reversible
style Z8387 is classified thereunder, specifically in subheading
6307.90.9907, HTSUSA, textile category 670, the provision for
-7-
"Other made up articles, including dress patterns: Other: Other:
Other, Cooler bags with an outer surface of textile materials: Of
man-made fibers."
ISSUE 2: COUNTRY OF ORIGIN
LAW AND ANALYSIS:
On December 8, 1994, the President signed into law the
Uruguay Round Agreements Act. Section 334 of that Act provides
new rules of origin for textiles and apparel entered, or
withdrawn from warehouse, for consumption, on or after July 1,
1996. On September 5, 1995, Customs published Section 102.21,
Customs Regulations, in the Federal Register, implementing
Section 334 (60 FR 46188). Thus, effective July 1, 1996, the
country of origin of a textile or apparel product shall be
determined by sequential application of the general rules set
forth in paragraphs (c)(1) through (5) of section 102.21.
Paragraph (c)(1) states that "The country of origin of a
textile or apparel product is the single country, territory, or
insular possession in which the good was wholly obtained or
produced." Since none of the merchandise is wholly obtained or
produced in a single country, territory or insular possession,
paragraph (c)(1) is not applicable.
Paragraph (c)(2) states that "Where the country of origin of
a textile or apparel product cannot be determined under paragraph
(c)(1) of this section, the country of origin of the good is the
single country, territory, or insular possession in which each
foreign material incorporated in that good underwent an
applicable change in tariff classification, and/or met any other
requirement, specified for the good in paragraph (e) of this
section."
Paragraph (e) states that "The following rules shall apply
for purposes of determining the country of origin of a textile or
apparel product under paragraph (c)(2) of this section:"
6307.90...The country of origin of a good classifiable under
subheading 6307.90 is the country, territory, or insular
possession in which the fabric comprising the good was
formed by a fabric-making process.
At the six digit subheading level, all five styles of
cookware carrying cases are classified in subheading 6307.90,
HTSUS. According to the information supplied by the importer in
the "FACTS" section above, all materials (including the fabrics)
-8-
are sourced in China, Taiwan, Japan, and Hong Kong. The country
of origin of the cookware carrying cases is therefore either
China, Taiwan, Japan, or Hong Kong, depending upon the single
specific country in which the textile fabric comprising each
article was formed by a fabric-making process.
HOLDING:
The cookware carrying cases identified by style nos. Z8196,
Z8197, Z8198, and Z8199, are 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.
The cookware carrying case identified by style no. Z8387, is
classified in subheading 6307.90.9907, HTSUSA, textile category
670, the provision for "Other made up articles, including dress
patterns: Other: Other: Other, Cooler bags with an outer surface
of textile materials: Of man-made fibers." The general column
one duty rate is 7 percent ad valorem.
The country of origin of the cookware carrying cases
identified by style nos. Z8196, Z8197, Z8198, Z8199, and Z8387,
is either China, Taiwan, Japan, or Hong Kong, depending upon the
single country in which the fabric was formed.
The designated textile and apparel category may be
subdivided into parts. If so, visa and quota requirements
applicable to the subject merchandise may be affected. Since
part categories are the result of international bilateral
agreements which are subject to frequent renegotiations and
changes, to obtain the most current information available, we
suggest that you check, close to the time of shipment, the Status
Report On Current Import Quotas (Restraint Levels), an internal
issuance of the U.S. Customs Service, which is available for
inspection at your local Customs office.
Due to the changeable nature of the statistical annotation
(the ninth and tenth digits of the classification) and the
restraint (quota/visa) categories applicable to textile
merchandise, you should contact your local Customs office prior
to importation of this merchandise to determine the current
status of any import restraints or requirements.
The holding set forth above applies only to the specific
factual situation and merchandise identified in the ruling
request. This position is clearly set forth in 19 CFR
177.9(b)(1), which states that each ruling letter is issued on
-9-
the assumption that all of the information furnished and
incorporated in the ruling letter, either directly, by reference,
or by implication, is accurate and complete in every material
respect.
Should it be subsequently determined that the information
furnished is not complete and does not comply with 19 CFR
177.9(b)(1), the ruling will be subject to modification or
revocation. A change in the facts previously furnished may
affect the determination of country of origin. Thus, if there is
any change in the facts provided to Customs, it is recommended
that a new ruling request be submitted in accordance with 19 CFR
177.2.
Sincerely,
John Durant, Director
Commercial Rulings Division