Insulated Shopping Bags; Heading 4202, HTSUSA; Chapter Note 2(A)(a) to Chapter 42; Designed for Prolonged Use; Not Heading 3923, HTSUSA; SGI Inc. v. United States

HQ 962027 November 29, 1999 CLA2 RR:CR:TE 962027 SS CATEGORY: Classification TARIFF NO.: 4202.92.4500 Mr. Paul J. Crystal 1001 North Vermont Street, #512 Arlington, VA 22201 RE: Insulated Shopping Bags; Heading 4202, HTSUSA; Chapter Note 2(A)(a) to Chapter 42; Designed for Prolonged Use; Not Heading 3923, HTSUSA; SGI Inc. v. United States Dear Mr. Crystal: This letter is in response to your request, dated June 3, 1998, concerning the classification under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA) of two (2) insulated shopping bags manufactured in France. A sample of each insulated shopping bag was submitted with your request. FACTS: The first submitted sample is an insulated shopping bag identified as a “cold bag.” The exterior of the shopping bag is white and indicates the bag is called “SAC ISOTHERME” and “BOLSA ISOTERMICA.” The shopping bag is approximately 20 inches in height by 17-1/2 inches in width and is described as having a capacity of 18 liters. The shopping bag is constructed of three layers. The bag has an inner and outer layer of low density polyethylene sheeting and an inner insulating layer of foamed polyethylene. It has a molded plastic self-locking handle. Printing on the bag indicates that the bag is reusable. The second submitted sample is another insulated shopping bag identified by the importer as a “cold bag.” The exterior of the shopping bag is silver and indicates the bag is called “SAC ISOTHERME”, “BOLSA ISOTERMICA”, “KUHLTASCHE” and “FREEZER CARRIER.” The shopping bag is approximately 19 inches in height by 13 inches in width by 8 inches in depth and is described as having a capacity of 34 liters. It appears to also be available in a 27 liter capacity. The shopping bag is constructed of three layers. The outer layer is of metallized polyester, the middle insulating layer is polyethylene foam and the inner layer is of low density  polyethylene. The bag has a molded plastic handle on one side which slides through a molded plastic slot on the other side, forming a secure closure. Printing on the bag indicates that the bag is reusable. You indicate in your ruling request that the “cold bags” are insulated grocery bags designed to maintain the constant temperature of frozen foods for 2 to 3 hours after they have been removed from the store freezer case. You submit that the product will be purchased by customers who wish to ensure the safety and edibility of frozen foods during the time between removal from the store freezer case and re-storage in a home freezer unit. The “cold bags” are durably built for repeated use over a period of 1-1/2 to 2 years. ISSUE: What is the proper classification of the insulated shopping bags under the HTSUSA? LAW AND ANALYSIS: Classification under the Harmonized Tariff Schedule of the United States Annotated (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 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 HTSUSA by offering guidance in understanding the scope of the headings and GRI. Heading 4202, HTSUSA, provides for, among other articles, shopping bags wholly or mainly covered with plastic sheeting. Subheading 4202.92, HTSUSA, provides for travel, sports and similar bags, with an outer surface of plastic sheeting or textile materials. Additional U.S. Note 1 to Chapter 42, HTSUSA, states that "the expression 'travel, sports and similar bags' means goods...of a kind designed for carrying clothing and other personal effects during travel, including...shopping bags...." However, Chapter Note 2(A)(a) to Chapter 42, HTSUSA, states that heading 4202, HTSUSA, does not cover “[b]ags made of sheeting of plastics, whether or not printed, with handles, not designed for prolonged use (heading 3923)." Accordingly, we must determine whether or not the instant insulated shopping bags are designed for prolonged use. In Headquarters Ruling Letter (HQ) 088254, dated March 27, 1991, Customs classified a similar insulated shopping bag, described as “Sac Isotherme”, under subheading 4202.92.4500, HTSUSA. The “Sac Isotherme” consisted of an outer surface of metalized polyester plastic sheeting material, a thin foam interlining, and a polyvinyl inner lining. It measured approximately 20 inches by 13 inches by 6 inches, had a sturdy plastic handle, and was described as being similar to a standard rectangular shopping bag. The “Sac Isotherme” was designed to transport fresh or frozen food from the place of purchase to the home. Customs ruled that the “Sac Isotherme” was of durable construction, designed for prolonged use, and therefore not precluded from classification in heading 4202, HTSUSA, by virtue of Chapter Note 2(A)(a) to Chapter 42, HTSUSA. In HQ 953077, dated April 26, 1993, Customs classified another shopping bag under heading 3923, HTSUSA. That bag was made of plastic sheeting coated on the inside with vaporized aluminum and on the exterior with a thin polyethylene coating. The bag contained no insulation, but had some temperature retaining capability due to the reflectivity of the metallization. The bag was designed for transporting food from the place of purchase to the home and was given to purchasers at retail to carry purchases home and to be subsequently reused by the purchaser. However, tests concerning durability indicated that continued usage of the bag was unlikely and that the bag might only last through several uses. Accordingly, Customs ruled that the bag was flimsily constructed, not manufactured for continued durable use and that such bags were classifiable in heading 3923, HTSUSA. Accordingly it appears that Customs has classified insulated shopping bags in heading 3923, HTSUSA, when made of flimsy materials such as polyethylene, not capable of prolonged use, containing no middle insulating material, and designed to be given away to the consumer. In contrast, insulated shopping bags of more durable construction, containing a middle insulating layer, and of a type sold empty at retail, are classified in heading 4202, HTSUSA. For additional rulings consistent with this position see New York Ruling Letter (NY) A87296, dated September 27, 1996, and NY A86737, dated September 13, 1996. We find that the instant insulated shopping bags are of durable construction and designed for prolonged use. The insulated shopping bags are not given away as premiums but are purchased empty by consumers and brought to the grocery store to be packed with hot or cold foods. The bags are intended for repeated use for 1-1/2 to 2 years. Thus, the instant insulated shopping bags are classifiable under heading 4202, HTSUSA. This matter was forwarded to Headquarters due to concern over the possible application of SGI, Incorporated v. United States, 122 F.3d 1468 (Fed. Cir. 1997), a recent court case involving the classification of portable, soft-sided, insulated cooler bags with outer surface of plastics. Without discussion of various exemplars of heading 4202, HTSUSA, which do organize, store, protect and/or carry food or beverages, such as shopping bags, the CAFC stated that none of the exemplars under subheading 4202.92.90, HTSUSA, involved containment of any food or beverage. The CAFC held that the appropriate classification for the cooler bags was subheading 3924.10.50, HTSUSA. Following the position of the Court, containers which are primarily designed and chiefly used for the storage of food or beverages at a desired temperature over a period of time are excluded from classification within Heading 4202, HTSUSA, as an article not of a kind similar to the exemplars. However, the subject insulated shopping bags, are not precluded from classification in Heading 4202, HTSUSA. The instant insulated shopping bags are an eo nomine exemplar of heading 4202, HTSUSA, and an exemplar specifically named in Additional U.S. Note 1 to Chapter 42, HTSUSA. In implementing the CAFC’s decision in SGI, instructions were issued to Customs field offices on March 18, 1998 (and approved for dissemination to members of the importing community). The instructions expressly provide that shopping bags, whether or not insulated and designed to store and maintain food and/or beverages at a certain temperature, remain classified under Heading 4202, HTSUSA, unaffected by the principles of the SGI decision. In light of the instructions noted above, general principles of classification and prior rulings, the subject insulated shopping bags are classified in subheading 4202.92.4500, HTSUSA. HOLDING: The “cold bag” insulated shopping bags are classifiable in subheading 4202.92.4500, HTSUSA, which provides for travel, sports and similar bags, other (than with an outer surface of textile materials). The applicable rate of duty is 20 percent ad valorem. Sincerely, John Durant, Director Commercial Rulings Division