CLA-2:RR:CR:TE 963618 JFS
Barbara Y. Wierbicki, Esq.
Tompkins & Davidson, LLP
One Astor Plaza
New York, NY 10036-8901
Re: Request for Reconsideration of NY E89770, dated November 19, 1999; 4202, HTSUSA; Tariff Classification of Handbag; Outer Surface of Sheeting of Plastic
Dear Ms. Wierbicki:
On November 19, 1999, New York Ruling Letter (NY) E89770 was issued to you on behalf of your client, Avon Products, Inc., in response to your request for a binding ruling on the tariff classification of a woman’s handbag. In that ruling, the handbag was classified under subheading 4202.22.1500, of the Harmonized Tariff Schedule Annotated (HTSUSA), which provides, in part, for: Trunks. . . handbags . . .: 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 sheeting of plastic.
FACTS: The sample, Great Plains Bag, #PP197866, is an ivory colored handbag. The overall dimensions of the handbag are approximately 9 inches by 11 inches by 3 inches. It has an adjustable shoulder strap and the interior is divided into three compartments. The two outer compartments have zipper closures and the middle compartment has a magnetic snap closure. The exterior front of the bag has a gussetted compartment with a magnetic snap closure. The interior of this compartment has a slot for credit cards, a clear panel for identification, a change purse, a zippered security pocket and three open pockets. The front of the bag consists of a large gussetted pocket and a substantial fold down flap. The flap has a brass colored metal decoration and is secured with a brass colored snap closure. There is a large pocket that covers most of the rear portion of the bag.
The handbag is constructed of two types of materials; (1) split leather covered with a layer of plastic that you state is approximately 0.04 mm thick; and (2) plastic sheeting backed with textile (imitation leather). The compartment on the front of the bag and the storage pocket on the rear of the bag are constructed of the plastic coated leather. The rest of the bag, i.e., the sides, bottom, and portions of the front and back, is constructed of the textile backed plastic sheeting.
Whether the handbag has an outer surface of leather or an outer surface of sheeting of plastic?
LAW AND ANALYSIS:
Classification under the HTSUSA 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 Harmonized Commodity Description and Coding System Explanatory Notes (EN) represent the official interpretation of the Harmonized System at the international level (for the 4 digit headings and the 6 digit subheadings) and facilitate classification under the HTSUSA by offering guidance in understanding the scope of the headings and GRI. The Explanatory Notes, although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUSA, and are generally indicative of the proper interpretation of these headings.
In NY E89770, Customs concluded that the outer surface of the subject handbag was of sheeting of plastic and classified the bag in 4202.22.1500, HTSUSA. You assert that the coating of plastic should be disregarded and that the handbag should be classified as having an outer surface of leather in subheading 4202.21.6000, HTSUSA. Your argument that the handbag has an outer surface of leather is two-fold. First, you argue that the front and back panels, which are composed of split leather coated with plastic, have, for classification purposes, an outer surface of leather. Second, you argue that the front and back panels impart the essential character of the handbag. The essential character analysis that is required in the second step is unnecessary if it is determined that the front and back panels have an outer surface of sheeting of plastic. Therefore, for purposes of this ruling, we will assume that the front and back panels of the bag impart the essential character.
At the six-digit level, the nomenclature classifies the majority of goods in Chapter 42 by the material that comprises the "outer surface." See Headquarters Ruling Letter (HQ) 954021, dated November 1, 1993, citing HQ 087760, dated October 31, 1991, and HQ 087640, dated November 8, 1990. When classifying goods in heading 4202, HTSUSA, it is problematic when the material that comprises the outer layer is a composite material, e.g., the outer layer is composed of a base material of split leather that is coated with plastic. Customs addressed this issue in HQ 087760, dated October 31, 1991, wherein Customs explained:
At the four-digit level, heading 4202, HTSUSA, requires that a good be "of" or "wholly or mainly covered with" a specified material. However, at the six-digit level, the nomenclature classifies goods by the material which comprises the "outer surface." . . . In classifying goods such as these, we must distinguish between the requirements of the four- and six-digit headings, since they dictate different criteria for classifying goods.
This distinction was further discussed in HQ 954021, dated November 1, 1993, wherein Customs, noting HQ 087760, stated: “Evident in the above are two important distinctions: (1) a covering vs. an outer surface, and (2) classification at the four-digit (or heading) level vs. classification at the six-digit (or subheading) level.”
The front and back panels of the handbag are composed of plastic coated split leather. Thus, at the four digit, or heading level, the bag is considered to be “wholly or mainly covered” with leather. However, classification at the six-digit level requires consideration of what material constitutes the outer surface. The term "outer surface of" is not defined in Chapter 42, or anywhere else in the HTSUSA. In HQ 086775, dated July 9, 1990, Customs stated that the outer surface "is that which is both visible and tactile." See HQ 954021 and the cases cited therein. "Tactile" is defined as follows: "1. Perceptible to the touch: TANGIBLE." “Tangible" is defined as follows: "1a. Discernible by the touch or capable of being touched." Webster's II New Riverside University Dictionary, (1984) at 1178 and 1182, respectively.
Customs interpretation of the term “outer surface of” is consistent with Additional U.S. Note 2 of Chapter 42, HTSUSA, which provides that:
For purposes of classifying articles under subheadings 4202.12, 4202.22, 4202.32, and 4202.92, 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.
Thus, this note explicitly provides the mechanism for making an "outer surface" determination where a textile is impregnated, coated, covered or laminated with plastic. The note expresses the concept of "outer surface" by use of the term "exterior surface." The note is useful in understanding the term "outer surface" when applied to other composite materials. Customs has relied upon this note as guidance when classifying other articles in heading 4202 that are composed of composite materials. Customs, application of the note is consistent with the Court of International Trade’s decision in Sarne Handbags Corp. v. United States, 100 F. Supp. 2d 1126; 2000 Ct. Int’l. Trade 51 (2000), wherein the court, applying the note, found that a handbag made of plastic coated textile was classified as having an outer surface of sheeting of plastic.
When applying the definition of “visible and tactile” to goods of heading 4202, HTSUSA, Customs has consistently classified the goods according the outer-most substance of the composite material at issue. For instance, Customs addressed this same issue as it pertained to jewelry box cases that were covered with a flock-coated paper. Customs concluded, based on the fact that it was the textile flock that was visible and tactile, that the jewelry cases had an outer surface of textile materials. See HQ 954021, supra, and HQ 961175, dated July 21, 1998. Similarly, Customs has classified jewelry boxes, a coupon holder, and a “Vanity Train Case” covered with paper that had been coated with sheeting of plastic, as cases having an outer surface of sheeting of plastic. See HQ 960454, dated December 9, 1997 (jewelry box); HQ 961175, supra, (jewelry box); HQ 960990, dated February 3, 1998 (coupon holder); and HQ 960462, dated December 16, 1997 (Vanity Train Case). See also, HQ 086983, dated June 14, 1990 (classifying a jewelry organizer that was covered with a floral textile material that was covered with clear plastic sheeting as having an outer surface of sheeting of plastic).
In this case, the front and back panels are composed of split leather that is covered with a thin sheeting of plastic. Because the sheeting of plastic is that which is both visible and tactile, the bag is classified under subheading 4202.22.1500, HTSUSA, as a handbag with an outer surface of sheeting of plastic.
You contend that the front and back panels have an outer surface of leather for classification purposes, regardless of the fact that the leather is covered with a layer of plastic. Your position is consistent with several old Customs rulings, which you cite as authority for your position. These rulings relied upon the definition of patent leather contained in the EN to Chapter 41, HTSUSA, to determine if the outer surface of plastic coated leather was plastic or leather. The EN describe patent leather as:
(1) Patent leather, which is leather coated or covered with a varnish or lacquer or with a pre-formed sheet of plastics and which has a lustrous mirror-like surface.
. . .
The pre-formed sheet of plastics applied to leather is generally made from polyurethane of polyvinyl chloride.
. . .
The thickness of the coating or the sheet does not exceed 0.15 mm.
In these rulings, Customs did not apply the “visible and tactile” standard. Instead, Customs applied a quasi-essential character test. Customs reasoned that if the coating of plastic had a thickness of 0.15 mm or less, then the plastic was disregarded and the articles were considered to have an outer surface of leather. Conversely, if the coating of plastic was greater than 0.15 mm, the articles were considered to have an outer surface of sheeting of plastic. See HQ 955656, dated July 14, 1994; HQ 085188, dated July 6, 1988; HQ 086339, dated May 16, 1990; HQ 084844, dated October 10, 1989; and HQ 084960, dated September 28, 1989. While this reliance on the EN for patent leather was useful for conducting an essential character analysis, the nomenclature of 4202, HTSUSA, is not conducive to an essential character analysis when considering a composite material like the one at hand. “Outer surface of,” defined as that which is both visible and tactile, leaves little room for consideration of which layer of a plastic coated leather imparts the essential character.
It is important to note that the line of rulings mentioned above have been superceded by Customs rulings on goods covered with plastic coated paper, flock covered paper and plastic coated textile. Moreover, and more importantly, Customs has recently ruled that articles composed of plastic coated leather are considered to have an outer surface of sheeting of plastic. See HQ 960344, dated April 19, 2000 (classifying an attaché case composed of three layers, an outer layer of plastic, a middle layer of composition leather and an inner layer of textile material, as having an outer surface of sheeting of plastic); HQ 960002, dated October 24, 1997 (classifying a tote bag featuring front and back panels manufactured from a composite material of plastic covered layers of leather and composition leather as having an outer surface of sheeting of plastic); and HQ 955515, dated May 5, 1994 (holding that if the leather portions of the bag have a coating of plastic, then the outer surface is of sheeting of plastic).
You support classification of the handbag in subheading 4202.21, HTSUSA, which provides for handbags “with outer surface of leather, of composition leather or of patent leather.” There are no provisions in Chapter 42 or the EN to Chapter 42 that define these terms. However, Chapter 41, which provides for “Raw Hides and Skins (Other than Furskins) and Leather,” can be used as a tool to determine the meaning of these terms.
The EN to Chapter 41 provide guidance as to the scope of the term “leather.” Hides and skins that have not been prepared beyond tanning are classified in headings 4101 through 4106, HTSUSA. “Hides and skins which have been tanned or further prepared beyond tanning are known in the trade as ‘leather’.” See General EN (II), Chapter 41. These articles are classified in headings 4107 through 4113, HTSUSA, each of which provide, in pertinent part, for:
Leather further prepared after tanning or crusting, including parchment dressed leather, . . whether or not split, other than leather of heading 4114.
General EN (III), Chapter 41, covering “leather further prepared after tanning or crusting (headings 4107, 4112 and 4113),” states:
After tanning or crusting, the leather frequently undergoes further treatment (‘currying’) to remove irregularities . . . The leather may then be further dressed or finished by the application of a surface colour or pigment, graining or stamping to imitate skins of other kinds, sizing, polishing, grinding (or buffing) of the flesh side (or occasionally the grain side) to give a suede or velvet finish, waxing, blacking, smoothing (glazing), satin finishing printing, etc.
The EN make no reference to “leather” being covered or coated with plastic.
In contrast, EN (IV), covering the specialty leathers “Chamois leather; patent leather and patent laminated leather: metallized leather (heading 4114),” states:
Heading 41.14 includes the specialty leathers named in the heading text and produced by specific finishing operations. The heading therefore covers sheep and lamb skins which have been oil-tanned and dressed to produce chamois leather (including combination chamois leather); leather which has been coated or covered with a varnish or lacquer or with a pre-formed sheet of plastics (patent leather or patent laminated leather) . . .
Emphasis added. EN (IV), covering patent leather, is the only provision in the EN to Chapter 41 that provides for a finish of plastic sheeting.
Thus, the term “with outer surface of leather,” as provided for in heading 4202, HTSUSA, does not encompass a leather product that has been coated, covered, or finished with plastic. In order for a good that is composed of a plastic coated leather to be classified as having an outer surface of leather, it must meet the definition of patent leather which allows for the leather to have a coating of plastic.
You cite to Additional U.S. Note 1 to Chapter 41, HTSUSA, as a means of distinguishing “leather” piece goods from patent leather and composition leather piece goods. The Additional U.S. Note states:
The term “fancy” as applied to leather, means leather which has been embossed, printed or otherwise decorated in any manner or to any extent (including leather on which the original grain has been accentuated by any process, but excluding leather of subheading 4114.20).
The Additional U.S. Note addresses the classification of “fancy leathers,” which are classified at the eight and ten digit, U.S., levels. The note does not address the classification of goods classified in heading 4202, HTSUSA, according to the material that comprises their outer surface. Thus, its usefulness in this instance is limited.
One final possible classification for the handbag is to classify it as having an outer surface of patent leather. In order to qualify as patent leather (1) the base material must be of leather; (2) the coating, be it of plastic sheeting or otherwise, must have a thickness of 0.15 mm or less, and (3) the finish must retain a lustrous mirror-like appearance. The instant article meets two of the three criteria. The underlying material is split leather, which is treated as leather. The sheeting of plastic that covers the split leather is 0.04 mm thick, thereby satisfying the 0.15 mm requirement. However, the third requirement, that the article have a “lustrous mirror-like” finish is not satisfied. The finish on the instant article is a dull ivory color. It is not lustrous, much less mirror-like. Accordingly, the handbag is not classified as having an outer surface of patent leather.
NY E89770, dated November 19, is affirmed. The handbag, Great Plains Bag, #PP197866, is classified in subheading 4202.22.1500, HTSUSA, which provides, in part, for: Trunks. . . handbags . . .: 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 sheeting of plastic. The general column one rate of duty is 16.8 percent, ad valorem.
Myles B. Harmon, Acting Director
Commercial Rulings Division