OT: RR: CTF: CPM: H254151 NCD
Jeff Karwich
Dezine News Accessories
3901 La Reunion Parkway
Dallas, Texas 75212
Re: Request for Reconsideration of NY N250169; Classification of evening handbags
Dear Mr. Karwich:
This is in response to your letter, dated April 9, 2014, in which you request reconsideration of New York Ruling Letter (NY) N250169 (“reconsideration request”). NY N250169, issued to you March 5, 2014 by U.S. Customs and Border Protection (CBP), involves classification of three evening handbags under the Harmonized Tariff Schedule of the United States (HTSUS). We regret the delay in responding to your reconsideration request. Having reviewed NY N250169 and determined that it is correct, we are affirming that ruling for the reasons set forth below. We are also returning samples of the merchandise included with your reconsideration request.
The evening handbags at issue were described as follows in NY N250169:
Style PH112-13/WNB33253 is an evening-style handbag constructed with an outer surface of man-made textile material. The handbag is designed and sized to contain a wallet, keys, and other small personal effects that are carried on a daily basis. The interior compartment has a textile lining. The bag features a metal frame with a clasp closure and two shoulder straps that can be tucked inside the bag when not in use. The bag measures approximately 6.5” (W) x 4.5” (H) x 2.5” (D).
Style FH094-13/WNBF33318B is an evening-style handbag constructed with an outer surface of man-made textile material. The handbag is designed and sized to contain a wallet, keys, and other small personal effects that are carried on a daily basis. The interior compartment has a textile lining. The bag features a metal frame with a clasp closure and two shoulder straps that can be tucked inside the bag when not in use. The bag measures approximately 6.25” (W) x 4.25” (H) x 1.25” (D).
Style FH083-13/WNB33222C is an evening-style handbag constructed with an outer surface of man-made textile material. The front of the bag is decorated with sequins, beads, and imitation gemstones. The decorative items do not cover the entire outer surface of the bag or the entire front panel. The textile with which the bag is constructed is not completely, or predominantly, obscured by any one type of decorative component. Moreover, the decorative components taken together do not completely obscure the textile material.
The handbag is designed and sized to contain a wallet, keys, and other small personal effects that are carried on a daily basis. The interior compartment has a textile lining. The bag features a metal frame with a clasp closure and two shoulder straps that can be tucked inside the bag when not in use. The bag measures approximately 6” (W) x 3.5” (H) x 1.75” (D).
Descriptions of the evening bags included in your reconsideration request are consistent with those set forth above. Your reconsideration request further clarifies that the textile of which the handbags’ outermost surfaces are largely comprised is polyester or polyester satin, that “metal detailing” is also visible along the bags’ exteriors, that one of the bags’ two component shoulder straps is composed of braided textile, and that the other shoulder strap is composed of iron. Your request also states that each bag can be “carried…with either of the shoulder straps.”
In NY N250169, CBP classified the subject evening handbags in heading 4202, HTSUS, which provides, inter alia, for “handbags.” It specifically classified the handbags in subheading 4202.22.80 of the 2014 HTSUS, which provided for “Handbags, whether or not with shoulder strap, including those without handle: With outer surface of sheeting of plastics or of textile materials: With outer surface of textile materials: Other: Other: Other.” In your reconsideration request, you assert that this subheading classification is incorrect, and that the handbags are correctly classified in subheading 4202.22.40, HTSUS, which provides for “Handbags, whether or not with shoulder strap, including those without handle: With outer surface of sheeting of plastics or of textile materials: With outer surface of textile materials: Wholly or in part of braid: Other.”
As a preliminary matter, it is not disputed that the subject articles, as handbags covered mostly with textile, fall squarely within the scope of heading 4202, HTSUS, by virtue of their enumeration there. See Headquarters Ruling Letter (HQ) H097655, dated December 17, 2010 (defining “handbag” as “a bag used by women that is designed to carry money, credit cards, keys, and small or pocket-sized personal effects”). We also do not contest the handbags’ 6-digit subheading classification in subheading 4202.22, HTSUS, as handbags “with outer surfaces of textile materials.” Solely at issue, therefore, is whether the handbags can, on account of their braided straps, be described as “wholly or in part of braid” for purposes of subheading 4202.22.40, HTSUS.
With respect to “wholly” and “in part of”, General Note (GN) 3(h)(v), HTSUS, provides as follows “[f]or purposes of the tariff schedule”:
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:
“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;
“in part of” or "containing" mean that the goods contain a significant quantity of the named material.
The handbags clearly cannot be described as “wholly of braid” insofar as they are not composed even predominantly, let alone nearly completely, of braided textile. As to whether they can alternatively be described as “in part of braid”, this is permissible only if they “contain a significant quantity” of braided material. The HTSUS does not establish threshold quantities that qualify as “significant” or otherwise clarify the scope of the term. In construing a nearly identical provision in the Tariff Schedule of the United States, the predecessor to the HTSUS, the U.S. Court of International Trade (C.I.T.) essentially established dual tests whereby a material is present in a “significant quantity” where “it performs a part in the principal function of the article” or, failing this, “it is present in a quantity which has independent commercial significance.” Bantam Travelware, Div. of Peter’s Bag Corp. v. United States, No. 85-11-01552 1987 Ct. Intl. Trade LEXIS 18, at *6 (Ct. Int’l Trade 1987) (“Bantam I”); see also Dow Chem. Co. v. United States, 647 F. Supp. 1574, 1579 (Ct. Int’l Trade 1986) (“Whether the…compounds make up a significant quantity of the merchandise depends upon whether the compounds exist in a quantity sufficient to perform a useful function or part of the primary function of the merchandise.”); Genender Wholesale v. United States, 520 F. Supp. 278, 280 (Ct. Int’l Trade 1981) (“It is proper that the court…determine whether the gold component contained in the subject watch cases is present in a ‘commercially significant amount.’”); and HQ 081483, dated April 27 1989 (explaining the “dual functional-quantitative test”).
As to the first of these tests, the C.I.T. effectively held that to sufficiently “perform a part” in a given article’s primary function, the material at issue must “play a role which is the primary function of the article rather than a role which is just related to the primary function.” HQ 085996, dated March 6, 1990 (construing and applying the court’s holding in Aceto Chem. Co. v. United States, 75 Cust. Ct. 167 (1975), aff'd, 64 C.C.P.A. 78 (1977). In so doing, the court cautioned that “a quantitatively minute amount of an ingredient should control classification only in the most limited circumstances.” Aceto, 75 Cust. Ct. at 169. Accordingly, Customs has ruled that braided material does not “perform a part” in a handbag’s “principal function” of carrying items where the material is solely in the form of a strap that is ultimately superfluous. See id. Such is the case because the handbag “can be accomplished without the use of the shoulder strap at all, and…can be accomplished with the use of a shoulder strap other than the braided type.” See id.; see also HQ 960489, dated October 10, 1997 (endorsing determination in HQ 085996).
As to the second test, the C.I.T. has determined that whether a material is present in “commercially significant” quantities turns on whether the material has “commercial utility”, whether it enhances the salability of the article, and/or whether its benefits are recognized within the “relevant trade.” See Bantam Travelware, Div. of Peter’s Bag Corp. v. United States, 679 F. Supp. 8, 10 (Ct. Int’l Trade 1987) (“Bantam II”), aff’d 858 F.2d 742 (Fed. Cir. 1988). Applying these factors in the particularly germane Bantam II, the court held that braided material incorporated into luggage handles could not be considered “present in a commercially significant quantity” given the lack of indicia that “use of braid produces any meaningful advantage relative to the actual performance or appearance of the product,” that “use of braided materials adds to the salability of the luggage,” or that other luggage manufacturers had recognized the “alleged benefits of braided construction.” See 679 F. Supp. at 10-11. CBP has subsequently expounded upon the Bantam II analysis by clarifying that a “commercially significant quantity” of braided material is present where a handbag’s braided straps enhance the bag’s “elegance, utility, and salability.” See, e.g., HQ 966059, dated March 12, 2003, and HQ 966050, dated March 11, 2003 (both applying the “elegance, utility, and salability” factors derived from HQ 089386, dated March 18, 1992). In so doing, we have distinguished between straps constituting the “most commonly used handle” from those constituting a mere “alternative means to carrying the bags.” See HQ 967129, dated August 10, 2004 (juxtaposing utility of braided strap with that at issue in HQ 089386); see also HQ 966059, supra (determining that braided strap constituted “significant quantity” of braided material where, among other things, it was permanently affixed to the handbag). We have also adduced the extent to which the braided strap visibly augments the bag’s aesthetic features, and/or to which it increases the expense and complexity of the bag’s manufacture, as indicia of increased elegance and salability. See HQ 966059, HQ 966050, and HQ 085996, supra. To this end, we have found that braided handles do not impart the same degree of elegance as “self” handles, which are produced from the same material of which the handbag itself is composed. See HQ 085996, supra.
Here, according to descriptions set forth in NY N250169 and your reconsideration request alike, the handbags at issue are specifically designed to carry various small items. Consistent with our prior rulings, therefore, the handbags’ “principal function” for purposes of GN 3(h)(v) can be described as the conveyance of the items placed within them. See HQ 085996, supra; see also Otter Prods., LLC v. United States, 834 F.3d 1369, 1377-78 (Fed. Cir. 2016) (reaffirming that the “unifying purpose” of articles enumerated in heading 4202 is their capacity to organize, store, protect, and/or carry). As stated in NY N250169 and acknowledged in your ruling request, the shoulder strap in which the entirety of this material is present constitutes only one of two shoulder straps affixed to each handbag. As you further acknowledge, the bag can be carried by means of either strap or, alternatively, in the hand absent any strap whatsoever. This is consistent with our inspection of the sample merchandise, during which we observed that the bags could be stably and comfortably carried either in the hand or with use of the metal strap. See Simod America Corp. v. United States, 872 F.2d 1572, 1578 (Fed. Cir. 1989) (“In Customs classification cases, the merchandise itself is often a potent witness.”). Consequently, per CBP precedent and consistent with C.I.T. jurisprudence, the braided straps are superfluous components that do not “play a part” in the handbags’ “primary function.”
Moreover, as to whether the braided strap provides a “meaningful advantage” for purposes of the “commercial utility” test, it is highly unlikely that the strap constitutes the “most commonly used handle” of any of the handbags. In fact, it is much more likely that the strap is left unused altogether given its relative inconvenience. Our inspection of Styles PH112-13/WNB33253 and FH094-13/WNBF33318B reveals that only the metal strap is permanently affixed to each handbag. Specifically, the ringed ends of that metal strap are interlocked with larger rings set along each handbag’s opening, whereas, in contrast, the braided straps included with handbags of those styles are merely “clasped” to the handbags by means of detachable lobster clasps. While the metal strap can be concealed in a given handbag’s interior compartment, this entails concealing the metal ring to which the braided strap is clasped, thereby precluding use of the braided strap as well. In effect, whereas the metal strap can be used well after the braided strap is removed, the latter cannot be used in the absence of the former. To that extent, the metal straps are, by design, the “most commonly used handle.” Moreover, we observed a tendency among the metal and braided straps to become entangled when left outside the handbags’ compartments. The frequency with which this entanglement occurs is effectively a deterrent to use of the braided strap. Because that strap is easily detachable, it is highly conceivable that a user would simply remove the strap altogether. As to Style FH083-13/WNB33222C, we observed that the particular construction of that model actually inhibited use of the braided strap altogether. Specifically, the strap’s ends are sewn into the handbag’s inner textile layer in a manner which, given the strap’s girth, prevents closure of the handbag while the strap is outside the bag. Consequently, the braided straps certainly do not offer a “meaningful advantage relative to the actual performance” of the handbags or otherwise increase the handbags’ utility.
Nor can it be conclusively stated that the bags increase the elegance or salability of the bags. Rather, a more reasonable conclusion is that the straps’ propensity for entanglement and, in the case of Style FH083-13/WNB33222C, impediment to the handbags’ closure actually detract from the bags’ aesthetic appeal and marketability. Moreover, the material construction of the braided straps contrasts with that of the remaining handbag components, all of which are made up of metal and polyester (or polyester linen). See HQ 085996, supra. We have not received information indicating that the inclusion of the braided handles increases the expense or complexity of manufacture. Nor have we received information indicative of whether the braided straps are recognized as beneficial within the handbag industry, although, given the market ubiquity and commercial success of handbags with only one strap (or, at most, two fully complementary and necessary straps), we are doubtful that this factor weighs towards a determination that the braided material is present in a “significant quantity.” In view of this, we conclude that the braided material is not present in a “significant quantity” for purposes of GN 3(h)(v), and that the handbags consequently cannot be described as “wholly or in part of braid” within the meaning of subheading 4202.22.40, HTSUS.
For all the aforementioned reasons, we hereby affirm NY N250169. Accordingly, the subject evening handbags are classified in heading 4202, HTSUS, as “handbags”, and are specifically classified in subheading 4202.22.8980, HTSUSA (Annotated), as “Handbags, whether or not with shoulder strap, including those without handle: With outer surface of sheeting of plastics or of textile materials: With outer surface of textile materials: Other: Other: Other: Other.”
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division