CLA-2 RR:CR:TE 962357 RH
Graham & James LLP
885 Third Avenue, 24th floor
New York, NY 10022-4834
RE: Revocation of NY D82380, dated September 29, 1998; Classification of handbags
with braided leather straps; heading 4202
Dear Gentlemen:
This is in reply to your letter of November 6, 1998, requesting reconsideration of New York Ruling Letter (NY) D82380, dated September 29, 1998, concerning the classification of two textile handbags with braided leather straps.
You sent samples of each bag to aid us in our determination.
Initially, we note that your request for expedited treatment under 19 U.S.C. §1625 is denied. A ruling request based on an undesirable duty rate does not establish reasonable business necessity.
Pursuant to section 1625(c)(1) of the United States Code (19 U.S.C. §1625(c)(1)), notice of the proposed revocation of NY D82380 was published on March 3, 1999, in the Customs Bulletin, Volume 33, No. 8/9.
FACTS:
The merchandise at issue consists of two textile handbags with permanently attached braided leather straps. A description of the merchandise in NY D82380 reads:
The samples submitted, identified as styles DH840089 and DH840096, are handbags manufactured with an exterior surface of man-made textile materials. Subheading 4202.22. provides for Handbags, with or without handles or shoulder straps. The shoulder straps herein are “de minimis”. Style DH840089 measures approximately 6 ½" (H) x 7" (W) with 2 ½" gussets. Style DH840096 measures approximately 9" (H) x 11" (W) with 3" gussets.
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In NY D82380, Customs classified both handbags under subheading 4202.22.8050 of the Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for handbags, whether or not with shoulder strap, including those without handle, with outer surface of textile materials, other, of man-made fibers. You argue that Customs should have classified the handbags under subheading 4202.22.40, HTSUSA, which provides for handbags, with outer surface of textile materials: wholly or in part of braid, other.
ISSUE:
What is the proper classification of handbags with braided leather straps under the HTSUSA?
LAW AND ANALYSIS:
Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRI’s). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. Merchandise that cannot be classified in accordance with GRI 1 is to be classified in accordance with subsequent GRI’s taken in order.
It is undisputed that the handbags are classifiable under subheading 4202.22, HTSUSA, which encompasses handbags, with outer surface of textile materials. At the 8-digit level, we must determine if the bags are classifiable as “wholly of” or “in part of” braid.
General Note (GN) 19(e), HTSUSA, reads as follows:
(e) the terms "wholly of", "in part of", and "containing", when used between the description of an article and a material (e.g., "woven fabrics, wholly of cotton"), have the following meanings:
(i) "wholly of" means that the goods are, except for negligible or
insignificant quantities of some other material or materials, composed completely of the named material;
(ii) "in part of" or "containing" mean that the goods contain a
significant quantity of the named material.
With regard to the application of the quantitative concepts specified above, it is intended that the de minimis rule apply.
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The de minimus rule states that an ingredient or component of an article may be ignored for classification purposes depending upon "whether or not the amount used has really changed or affected the nature of the article and, of course, its salability." Varsity Watch Company v. United States, 34 CCPA 155, C.A.D. 359 (1947).
You cite two headquarters ruling letters (HQ) in which we held that the braided straps on handbags were more than de minimus. In HQ 089386, dated March 18, 1992, Customs held that the braided shoulder straps on a ladies evening handbag were fully functional and likely to be used to carry the bag over the shoulder. Moreover, Customs found that the braided straps enhanced the utility and style of the bag and were a commercially significant part thereof. The ruling stated that “[t]he braid itself is a more extravagant way of forming the shoulder strap, and adds to the expense and complexity of manufacture.” Additionally, in HQ 959062, dated January 28, 1997, Customs held that a handbag was classifiable “in part of braid” where the braided material on the handbag was fully functional, formed the entire strap and heightened the bag’s overall aesthetic appeal.
On the other hand, Customs has ruled that similar bags were "not in part of braid" where the bag had only a 1/8 inch wide braided strip of fabric attached to the top of the bag to hold together gathers, or where the braid was sewn into the fabric so that it could not be seen. HQ 081483, dated April 27, 1989. Similarly, in HQ 088050, dated January 10, 1991, Customs considered de minimis a small braided strip of fabric, measuring 1/8 inch wide, which was used to hold the gathers of a child's handbag secure.
In the instant case, the braided leather straps on the two handbags are similar to the braided textile straps in HQ 089386 and HQ 959062. The braided straps are fully functional and are designed to carry the handbags over the shoulder. Moreover, the braid forms the entire length of the shoulder straps and heightens the bags’ aesthetic appeal. Accordingly, we find that the handbags are classifiable as “in part of braid.”
We note that a superior subheading which provides for “With outer surface of textile materials” does not mean that a subordinate subheading “Wholly or in part of braid” is limited to textile braids. Such a subheading is descriptive in nature and does not require the braid to be of textile materials. On the other hand, subheadings subordinate to “Wholly or in part of braid” which provide for materials (e.g., “Of abaca”) do refer back to the superior subheading “With outer surface of textile materials.”
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HOLDING:
The braided shoulder straps on the handbags at issue are more than de minimis. Accordingly, the handbags are classifiable under subheading 4202.22.4030, HTSUSA, which provides for “Handbags, whether or not with shoulder strap, including those without handle: With outer surface of sheeting of plastic or of textile materials: With outer surface of textile materials: Wholly or in part of braid: Other.” They are dutiable at the 1999 general one column rate of 7.9 percent ad valorem, and the textile restraint category is 670.
NY D82380 is revoked. In accordance with 19 U.S.C. §1625(c)(1), this ruling will become affective 60 days after its publication in the Customs Bulletin.
The designated textile and apparel category may be subdivided into parts. If so, the 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 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 updated weekly and 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, you should contact your local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.
Sincerely,
John Durant, Director
Commercial Rulings Division