CLA-2 RR:CR:TE 962817 SS
David Serko, Esquire
Serko & Simon LLP
666 5th Avenue, 16th Floor
New York, New York 10103
Re: Classification of Insulated Bags for Food or Beverages
Dear Mr. Serko:
This letter is in response to your request of August 21, 1998, on behalf of your client California Innovations, Inc., concerning the classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of a soft-sided, insulated, collapsible cooler bag made in China or Sri Lanka. A sample was submitted with your request.
The submitted sample is a portable soft-sided cooler bag identified as
“Model # 872980.” The cooler bag is rectangular in shape and measures approximately 11-1/5 inches in height by 13 inches in width by 9-1/5 inches in depth. A zippered closure extends along three sides of the top panel which allows the top panel to serve as a flap opening. The exterior front of the bag has a full width zippered pocket and a full width mesh compartment. The interior of the article has two full width and height nylon mesh compartments with small hook and loop closures. The cooler bag has an adjustable carrying strap made of woven man-made fiber. The cooler bag also has a small hanging loop made of textile material located on the back panel. There are two side straps and hook and loop material is located on the top interior, front exterior, back and sides which allow the cooler bag to be collapsed.
The outer layer of four of the six sides of the cooler bag (top, bottom, front and back) is composed of “Cotron” fabric. The “Cotron” fabric is a textile fabric coated with non-cellular plastic (said to be polyvinyl chloride). The plastic surface faces outward and has been embossed to simulate the look of a textile woven fabric. The outer layer of the two remaining sides of the cooler bag is composed of a nylon woven fabric with a plastic backing. The nylon fabric surface of these two side panels faces outward. The middle layer is composed of plastic foam which measures approximately ¼ inch in thickness. This middle layer functions as an insulating and cushioning material. The inner layer is a leak-proof plastic liner described as being composed of white polyvinyl chloride with a plastic coated aluminum reflective barrier. The interior of the cooler bag also has a removable liner made of sheeting of plastic. The submitted cooler bag is said to be used for the storage of food or beverages and for maintaining cold temperature over time.
What is the proper classification of the instant soft-sided cooler bag under the HTSUSA?
LAW AND ANALYSIS:
Classification of goods under the HTSUSA is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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 Harmonized Commodity Description and Coding System Explanatory Notes (EN), constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the EN provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings.
Cooler bags have previously been classified under headings 3924, 4202 and 6307, HTSUSA, depending on their composition and outer surface material. However, pursuant to Presidential Proclamation 7515 of December 18, 2001, effective January 10, 2002, the term “insulated food or beverage bags” is included in the text of heading 4202, HTSUSA. The provision now reads:
Trunks, suitcases, vanity cases, attache cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food and 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
Furthermore, a new eighth paragraph in the Explanatory Notes to heading 42.02 (page 661) states:
The expression “insulated food or beverage bags” covers reusable insulated bags used to maintain the temperature of foods or beverages during transportation or temporary storage.
Thus, the change requires that all insulated food and beverage bags and similar containers, entered on or after January 10, 2002, be classified only under heading 4202, HTSUSA. Two subheadings have been created specifically for insulated food and beverage bags. Subheading 4202.92.05, HTSUSA, covers insulated food and beverage bags with an outer surface of textile materials and subheading 4202.92.10, HTSUSA, covers bags with an outer surface of other materials such as plastics or fabric-backed compact plastics.
The above changes stem from actions taken by the ITC, beginning with the institution of Investigation No. 1205-5 on November 18, 1999, proposing changes to the HTS due to the work of the World Customs Organization and Harmonized System Committee to update and clarify tariff nomenclature; and culminating with the amendment of the HTSUSA, pursuant to statutory or delegated authority, to provide eo nomine for "insulated food or beverage bags" in the new tariff breakouts under subheading 4202.92, HTSUSA.
It is clear that the instant cooler bags are covered by the term “insulated food or beverage bags” of heading 4202, HTSUSA. The only issue in this case is the classification at the subheading level which requires a determination of the outer surface material. Additional U.S. Note 2 to Chapter 42, HTSUSA, states that for the purposes of classifying articles under 4202.92, HTSUSA, articles of textile fabric impregnated, coated, covered or laminated with plastics (whether compact or cellular) shall be regarded as having an outer surface of textile materials or of plastic sheeting, depending upon whether and the extent to which the textile constituent or the plastic constituent makes up the exterior surface of the article. Applying this principle to the instant case, four of the panels have an outer surface of plastic and two of the panels have an outer surface of textile.
Since both subheadings 4202.92.05 and 4202.92.10, HTSUSA, are applicable to different portions of the bag, classification based on the principles of GRI 1 is not possible. GRI 2(b) states that the classification of goods consisting of more than one material shall be determined according to the principles of GRI 3. Under the principles of GRI 3(a), the heading which provides the most specific description is to be preferred to a heading which provides a more general description. However, when two subheadings each refer to part of materials in a composite good the subheadings are to be regarded as equally specific in relation to the good. GRI 3(b) provides that composite goods consisting of different materials are to be classified as if they consisted of the material which gives them their “essential character.” Thus, the question is whether the panels with an outer surface of plastic or the panels with an outer surface of textile materials impart the essential character.
Essential character may be determined by the nature of the material, its bulk, quantity, weight, value or by the role of a material in relation to the use of the goods. Customs believes that the four panels with an outer surface of plastic impart the essential character. These panels comprise the bulk of the outer surface of the bag. We also note that the material of these four panels is thicker and more rigid than the material used for the two side panels. Thus, we believe that these panels contribute significantly to the shape or form of the bag. Lastly, we note that when the bag is “collapsed” for storage, only the top and bottom panels (with an outer surface of plastic) are visible. This is consistent with the analysis set forth in Headquarters Ruling Letter (HQ) 962023, dated September 25, 1998, which classified a cooler bag with five panels with an outer surface of plastic and one panel with an outer surface of textile material as an article with an outer surface of plastic based on the fact that the bag was essentially composed of fabric-backed plastic.
The portable soft-sided, insulated cooler bag identified as “Model # 872980” is classified in subheading 4202.92.1000, HTSUSA, which provides for insulated food and beverage bags with an outer surface of other than textile materials. The general column one duty rate is 3.4 percent ad valorem.
John Durant, Director
Commercial Rulings Division