Decision on Application for Further Review of Protest No. 2720-07-100145

HQ H014775 March 6, 2008 CLA-2 OT:RR:CTF:TCM H014775 BAS CATEGORY: Classification TARIFF NO.: 4202.21.9000, HTSUSA Port Director U.S. Customs and Border Protection 11099 S. La Cienega Blvd. Los Angeles, CA 90045 RE: Decision on Application for Further Review of Protest No. 2720-07-100145 Dear Sir/Madam:  This is in reply to an application for further review (AFR) of Protest No. 2720-07-100145, received by Customs and Border Protection (CBP) on March 22, 2007. The protest was filed by Sharretts, Paley, Carter & Blauvelt, P.C., on behalf of their client, Donna Karan. The protest concerned the classification of two bags constructed with an outer surface of leather. Two samples were submitted. The merchandise was entered between June 2005 and July 2006 and liquidated on October 6, 2006. The merchandise was classified as handbags by the Port of Los Angeles under subheading 4202.21.9000, Harmonized Tariff Schedule of the United States Annotated (HTSUSA). There are eighteen entries at issue. The protest against liquidation in subheading 4202.21.9000, HTSUSA, was timely filed. The AFR was properly granted pursuant to 19 C.F.R. Section 174.26. FACTS: The subject of this protest is two bags. Both styles are constructed with an outer surface of leather. The style marked as R1610104A, the Black Whipstitch Hobo, features one carry handle that can also be used as a shoulder strap, a top opening with a magnetic closure, two exterior pockets, a textile lining and three interior pockets. The outside pockets have fasteners that resemble a leather belt with a metal buckle. Metal rings are used to attach the shoulder strap to the body of the bag. On each side of the bag is another fastener resembling a belt buckle, which appears to be there for aesthetic reasons. The leather shoulder strap, sides of the bag and front pockets all have decorative leatherwork in a criss-cross or whipstitch pattern, which resemble tied shoelaces. The tag inside the bag states that it is “Made in Indonesia.” It measures approximately 15” (W) x 3.5” (D) x 10” (H) at the highest point. The bag has a textile strip inside on which the DKNY logo is repeated. A picture of the Black Whipstitch Hobo appears below: $285.00
 The style marked as R1610103A (a white bag) features two carry handles, a top zippered opening, two exterior pockets, a textile lining and three interior pockets. Each carrying handle is attached to the bag by two metal rings. The white bag, referred to as the Whip Stitch E/W Satchel, has leather on both sides, the handles and the front pockets. The bag is manufactured in Indonesia. It also features fasteners resembling belt buckles as closures on the two outside pockets. It measures approximately 13.5” (W) x 4” (D) x 6” (H) at the highest point. The top of the bag is rounded in shape. The bag has a textile strip inside on which the DKNY logo is repeated. A digital picture of the bag (actual sample in white) appears below:
ISSUE: Are the bags under consideration classifiable in subheading 4202.21, HTSUSA, as handbags, or under subheading 4202.91, HTSUSA, as travel, sports and similar bags?  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 relevant 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 HTSUS by offering guidance in understanding the scope of the headings and GRI. Heading 4202, HTSUSA, encompasses the following articles:  Trunks, suitcases, vanity cases, attaché cases, briefcases, school satchels, spectacle cases, binocular cases, camera cases, musical instrument cases, gun cases, holsters and similar containers; traveling bags, insulated food or 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. In HQ 957917, dated July 7, 1995, the U.S. Customs Service (now CBP) cited Adolco Trading Co. v. United States, 71 Cust. Ct. 145, C.D. 4487 (1973), which held that tote bags were described in broad terms. The court stated: The evidence establishes that . . . the term tote or tote bag is used in the trade to cover various types of carry bags, including shopping bags, and bags which may be luggage . . . and others which may be handbags….Thus the fact that an article may be bought, sold or referred to as a tote or tote bag does not establish that it is a handbag, as defined in the tariff schedules.... The provision for travel, sports and similar bags is defined by Additional U.S. Note 1, Chapter 42, HTSUSA, as follows: For the purposes of heading 4202, the expression "travel, sports and similar bags" means goods, other than those falling in subheadings 4202.11 through 4202.39, of a kind designed for carrying clothing and other personal effects during travel, including backpacks and shopping bags of this heading, but does not include binocular cases, camera cases, musical instrument cases, bottle cases and similar containers. In HQ 957917, supra, Customs (now CBP) classified certain “tote” bags as travel, sport and similar bags within the meaning of Additional U.S. Note 1, Chapter 42, HTSUSA. The bags in that ruling were made from coarse, cotton canvas and were often printed with company logos or promotional or advertising information. Two styles had single snap closures; the rest had no means of closure. The bags had no pockets and were not lined or reinforced. Based on those characteristics, we found it unlikely that the bags were used in a manner similar to a women's handbag. We further found that the canvas tote bags were multipurpose bags used to carry any number of sundry articles, such as food, books and/or clothing. See also HQ 085327, September 20, 1989 (holding that a “tote” is classified under subheading 4202.92, HTSUSA, because the bag is larger than a handbag, substantially constructed and designed to contain various items including clothing and personal effects while traveling).Another ruling in which CBP classified a “tote” under subheading 4202.92, as a travel bag is HQ 955515, dated May 5, 1994. In that ruling, we held that tote bags are generally used to transport from place to place personal belongings, including clothing. We said “transport could be local, such as between home and office, or extended, as when clothing and/or other personal belongings are packed in a tote bag for a picnic, day at the beach, weekend trip or the like.” The bag in that case measured 12 inches by 14.75 inches by 4 inches. The upper portion was made of clear plastic and the bottom was made of leather. It also had leather covered handles. The bag was not lined and had no pockets. CBP has also classified bags referred to as “totes” under subheading 4202.22, as handbags. The term "handbags" includes pocket books, purses, shoulder bags, clutch bags, and similar articles customarily carried by women or girls, but does not include luggage, flat goods or shopping bags. Tote bags are those bags that are larger than handbags. HQ 961358, dated January 20, 1999. They are substantially constructed and designed to contain various items including clothing and personal effects while traveling, and usually have at least one side, which exceeds 12 inches in length. HQ 082271, dated December 1, 1988. Tote bags generally have no lining, reinforcements, pockets, or closures (or only single snap closures), provide little protection for their contents and are unlikely to be used in a manner similar to a woman’s handbag. HQ 950708, December 24, 1991; See also HQ 951113, issued May 19, 1992, affirming HQ 950708 In HQ 955552, dated August 15, 1994, CBP classified a pink lady’s shoulder bag as a handbag under subheading 4202.22, HTSUSA. The bag measured approximately 14 inches by 9½ inches with a tapered gusset two inches wide at the top and four inches wide at the bottom. The bag had two shoulder straps approximately 26 inches in length and was divided into two separate compartments, each with a zipper. The interior of the bag was lined and the bottom and corners were reinforced. We held that the bag was not a multipurpose bag used to carry a number of articles such as food, books, or clothing, and that it was not suitable for travel or shopping. While the bag could conceivably have been employed for some limited use as a sports bag, we stated that the primary purpose of the bag was as a traditional woman's handbag. Its design and construction, notably the shoulder straps, reinforcement, linings, inside zipper pocket, style of compartmentalization and zipper closure were all strongly indicative of a bag which is used normally by women and girls to carry personal items on a daily basis.In another ruling, HQ 961849, dated June 5, 1998, CBP classified a women’s “tote” bag under subheading 4202.22, as a handbag. That bag measured approximately 11½ inches by 10 inches by 3 inches. It had an outer surface of 100 percent nylon woven fabric and was lined with woven fabric of man-made fibers. It also had two leather carrying straps. The interior featured a large zippered central compartment which divided the bag’s interior and created three separate, full-sized compartments, two of which were open topped and without closures. It also had a smaller zippered pocket within one of the interior sides. In that ruling, we found that the bag was designed, constructed and intended to be used as a woman’s handbag, not as a tote or shopping bag. Again, its dimensions, lining, zippered pockets, and manner of compartmentalization indicated its purpose to contain certain items normally carried in a woman’s handbag, such as money, keys, glasses, etc. Moreover, the bag had insufficient additional capacity for use as a multipurpose carrier of any number of sundry articles (such as food, books, and/or clothing). In HQ 961358, dated January 20, 1999, CBP classified two styles of bags as women’s or girls’ handbags. In HQ 961358, there were two bags at issue: Style A970669, measuring approximately 11 inches by 8 inches by 3½ inches and Style A970709, measuring approximately 9 inches by 6 inches by 3 inches. Both bags featured the following characteristics: A) Textile lined undivided interior.B) Interior sidewall zippered pocket.C) Top metal snap closure.D) Self material shoulder straps.E) Exterior pocket without closure.F) Metal emblem on exterior “COLLECTION NEW YORK”.      G) Outer surface is a textile backed PVC sheeting. PVC is embossed to imitate a vinyl fabric.  In HQ 961358, we held that the bags did not have sufficient capacity for use as a multipurpose bag for carrying books, clothing, etc. Furthermore, the bags were lined and, although they did not have individual compartments, they had zippered pockets within the interior and a pocket on the exterior without a closure. The bags also had a snap closure. They were sufficient to carry keys, a wallet, sunglasses and similar articles generally carried in a woman’s handbag. Thus, CBP found that the bags were classified as handbags under subheading 4202.22.1500, HTSUSA.In HQ 961358, we stated that characteristics A through F above do not establish that the bags are handbags. However, they are relevant factors that CBP considers when classifying handbags as well as travel, sports and similar bags. Applying the same rationale in HQ W968454, dated July 10, 2007, we classified a bag made of polyvinylchloride (PVC) with an exterior surface of 100% cotton openwork knit fabric as a handbag in 4202.22, HTSUSA. The bag featured a thick silver chain with a narrow textile fabric woven through openings in the top two inches of the body of the bag. Two silver plated rings connected the shoulder strap to the bag. At its widest point the bag measured 14.5 inches by 8.25 inches by 6 inches, excluding the shoulder strap. The width of the bag decreased from the bottom to the top, with the width of the opening of the bag only measuring 10.5 inches. The shoulder strap added 11 inches in height. In addition to the shoulder strap, the bag featured one zippered interior compartment and an interior band with a magnetic closure. In HQ W968454, we reasoned that although the width of the bag is greater than twelve inches at its widest point, the bag does not have additional capacity to carry items that do not ordinarily fit within a woman’s handbag. The fact that the bag’s dimensions decrease both in depth and width from the bottom to the top prevent the opening of the bag from accommodating larger items than those that would generally fit into a woman’s handbag. Similarly, in the instant case, with regard to Style R1610104A, the Black Whip Stitch Hobo, the bag’s design and construction, that is the shoulder strap, reinforcement, inside zippered pocket, textile lining, undivided interior and top metal snap closure are all strongly indicative of a bag which is used normally by women and girls to carry personal items on a daily basis. As in the aforementioned rulings, the bags dimensions and manner of compartmentalization indicate its purpose to contain certain items generally carried in a woman’s handbag such as money, keys, glasses, etc. Although the bag has one side greater than 12 inches, like the bag at issue in W968454, it tapers in at the top to a width of 11 inches and the bag has insufficient additional capacity for use as a multipurpose carrier of any number of sundry articles (such as food, books and/or clothing). Accordingly, Style R1610104A, is properly classified as a handbag under subheading 4202.21 9000, HTSUSA. Notably a bag is not automatically classified as a travel, sports or similar bag, if it has one side measuring greater than twelve inches. While the two handbags are no longer advertised on DKNY.com, the Black Whipstitch Hobo bag is promoted and sold online with other handbags on websites such as glam.com and fabfashionista.com. On glam.com the website states the following about the Black Whipstitch Hobo: “DKNY gives the famed hobo a more structured elegant shape for spring. The beautiful whipstitching and silver metal grommets evoke a bohemian spirit while the soft grained leather is multi-crafted for a look of utter refinement.” Such characterization reveals the bag’s use as a fashion handbag as opposed to an item used for carrying large items such as clothing or work files. The features of the bag which are touted are more stylistic as opposed to stressing the bag’s carrying capacity. In combination with the other features mentioned above, this is also a factor contributing towards proper classification as a handbag. With regard to R1610103A, the Whip Stitch E/W Satchel, it is substantially constructed and it is clearly not designed to contain various items including clothing and personal effects while traveling. While the width of the bag is 13.5 inches, with a depth of only 4 inches and 6 inches in height, the bag would not have sufficient capacity to carry shoes or work files. We find that the primary purpose of the bag is as a traditional woman's handbag. Its design and construction, notably the reinforcement, linings, zippered closure and style of compartmentalization are all strongly indicative of a bag which is used normally by women and girls to carry personal items on a daily basis. Counsel argues that in three NY rulings, N003731, N003732, and N003730, all dated December 19, 2006, CBP classified substantially similar Donna Karan bag styles as tote bags. We find the merchandise in those rulings to be significantly distinguishable from the subject merchandise. In N003731, the width of the tote bag was 16.5 inches, in N003732 the width was 19 inches and in N003730 the width of the tote was 17 inches in contrast to the instant case in which the width of the Whipstich Hobo is 15 inches and the width of the Whipstitch E/W satchel is 13.5 inches. In addition, the dimensions of the Whipstitch Hobo decrease from the bottom to the top of the bag preventing the opening of the bag from accommodating larger items than those that would generally fit into a woman’s handbag. The bags in the NY rulings do not decrease in width and depth from the bottom to the top of the bag. With the larger dimensions, the bags in the NY rulings, in contrast to the subject merchandise, do have sufficient additional capacity for use as a multipurpose carrier of any number of sundry articles.  HOLDING: Style R1610104A (the Black Whipstitch Hobo), manufactured of leather and featuring a textile lining, one carry handle that can also be used as a shoulder strap a top opening with magnetic closure, two exterior pockets, a textile lining and three interior pockets and Style R1610103A (the White E/W Satchel) which features two carry handles, a top zippered opening, two exterior pockets, a textile lining and three interior pockets are properly classifiable under subheading 4202.21.9000, HTSUSA, which provides for “Trunks, suitcases,…; traveling bags,…,handbags, shopping bags, wallets, purses,…,sports bags,…and similar containers, of leather or of composition leather,…,or wholly or mainly covered with such materials or with paper: Handbags, whether or not with shoulder strap, including those without handle: With outer surface of leather, of composition leather or of patent leather: Other: Valued over $20 each.” The general column one rate of duty at the time of entry was 9% ad valorem. The protest should be denied. In accordance with the Protest/Petition Processing Handbook (CIS HB, January 2002, pp. 18 and 21), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision, Regulations and Rulings of the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division