CBP Memo on New HS Explanatory Note on Leather Suitcases, Handbags, Etc. Coated With Plastics or Synthetic Rubber

According to CBP, this new EN should be applied to subject merchandise imported on or after January 1, 2005, and to unliquidated and protested entries of such containers which have not been denied in whole or in part.

New HS EN Classifies Certain Containers With an Outer Surface of Coated Leather as "Leather"

The new EN affects certain merchandise in the following HTS subheadings: 4202.11 (trunks, suitcases, vanity cases, attach cases, briefcases, school satchels and similar containers); 4202.21 (handbags); 4202.31 (articles of a kind normally carried in the pocket or in the handbag); and 4202.91 (other articles). These subheadings are described as having an outer surface of leather, of composition leather, or of patent leather.

The text of the new EN is as follows:

"Subheadings 4202.11, 4202.21, 4202.31, and 4202.91

For the purposes of these subheadings, the expression "with outer surface of leather" includes leather coated with a thin layer of plastics or synthetic rubber which is invisible to the naked eye (usually less than 0.15 mm in thickness), to protect the leather surface, no account being taken of a change in colour or shine."

CBP explains that, for classification purposes, the new EN allows a layer of plastic or synthetic rubber to be present on the otherwise uncoated leather surface of containers of HTS 4202, if the layer is: (1) invisible to the naked eye, and (2) present to protect the leather surface.

Interpretation of the term "leather" applies to only grain & split leather. CBP states that in applying the new EN, the term "leather" is interpreted to mean only "grain leather" (e.g. the hair or outermost side) or "split leather" (the result of splitting the hide or skin into thicknesses other than the hair or outermost side). The term "leather" in the new EN does not apply to "composition leather" or "patent leather." Neither does the term "leather" encompass "bonded leather" or "reconstituted leather" (also referred to as "ground," "pulverized," or "shredded" leather, which generally are materials made of leather fibers held together with a bonding agent).

Interpretation of the term "invisible to the naked eye." CBP states that in interpreting the EN term "invisible to the naked eye," no account should be taken of a layer of plastic or synthetic rubber whose visibility results merely from a change in the leather's color or shine. If the layer is opaque, it is not considered to be "invisible," whether or not its opacity is due to color or shine. If the coated grain or split leather is not visible, the layer is not considered "invisible." The container's outer surface in such instances is considered to be "plastics" (subheading 4202.12) or "sheeting of plastic" (subheadings 4202.22, 4202.32, and 4202.92).

Interpretation of the term "to protect the leather surface." CBP explains that this term is interpreted to permit a layer of plastic or synthetic rubber that provides waterproofing, stain or scratch resistance, or other such protective characteristics. A layer that is used to change or upgrade the appearance of a split leather to imitate a grain leather is not used "to protect." The container's outer surface in such instances is considered to be "plastics" or "sheeting of plastic," whether or not the layer is "invisible to the naked eye."

Inapplicability of AUSN 2 to Chapter 42 and aspects of Sarne decision (both on textiles). According to CBP, in Sarne Handbags Corp. v. U.S., the Court of International Trade (CIT) applied Chapter 42 Additional U.S. Note (AUSN) 2 of the HTS, and a court-derived definition of plastic "sheeting" to determine that a handbag of plastic-coated textile material had an outer surface "of sheeting or plastic." The court decision in Sarne will generally not be applied to HTS 4202 containers with outer surface of coated leather.

CBP states that in light of commonly accepted practices in the leather industry and of the new EN, CBP no longer applies the terms of AUSN 2, nor Sarne's sheeting-related principles, to split leather or grain leather coated with a protective layer of plastic or synthetic rubber that is invisible to the naked eye. CBP states that it is reviewing several rulings on containers whose outer surfaces consist, at least in part, of coated leather, and will propose clarification, modification, or revocation of any rulings in material conflict with the above analysis.

(AUSN 2 to Chapter 42 states 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 material 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.")

Importers Should Request Rulings, if Necessary, to Determine Classification

CBP recognizes that it is often difficult to discern precisely what material is visible, and whether any plastic or synthetic rubber that is present constitutes a "layer" as opposed to an "application" that is neither visible nor tactile. As such, CBP states that questions as to these matters will often require resolution on a case-by-case basis.

CBP notes that importers should be advised to use reasonable care in classifying their goods, and are encouraged to submit binding ruling requests.

CBP Contact - National Import Specialist Kevin Gorman (646) 733-3041

CBP Memorandum (TC TCF 05-0858, dated 02/23/05) available via fax by emailing documents@brokerpower.com