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HQ 114360

June 18, 1998
BOR-4-07/CLA-2-RR-IT-EC 114360 GOB


Lynne W. Wendt, Esq.
Wendt, Weinberg & Temples LLC
127 Peachtree Street, NE
Suite 1303
Atlanta, GA 30303-1800

RE: Hangers; subheading 9803.00.50, HTSUS; Classification

Dear Ms. Wendt:

This is in response to your recent letter on behalf of FRM Services ("FRM") which we received on May 14, 1998.


FRM requests that certain hangers be classified under subheading 9803.00.50, Harmonized Tariff Schedule of the United States ("HTSUS").

FRM describes certain of the pertinent facts as follows:

The merchandise at issue is clear plastic garment hangers that have previously been used. These hangers will be acquired in the U.S. by FRM from clothing retailers who have used them to transport and display garments. FRM will sort, sanitize, package and export the used hangers to various garment manufacturers around the world in connection with the packaging of garments to be exported to certain importers in the U.S. The hangers at issue will then be imported into the U.S. holding new garments...
FRM ... is the exclusive licensee of a patented automated process for sorting clear plastic garment hangers for subsequent reuse. FRM is in the process of contracting with major U.S. retailers to acquire their excess used garment hangers. FRM will then sort them to eliminate damaged and defective hangers, sanitize those selected, package them and ship the used hangers to garment manufacturers on a global basis. The garment manufacturers will in turn use the hangers in preparing new garments for shipment to the retailer. The hangers we are concerned with in this request will be imported into the U.S. holding the garments by the U.S. retailer or its agent.

FRM further states as follows. The hangers are durable and capable of reuse. The importer of the garments and FRM will be able to establish and document the reuse of the hangers which will be used to transport different garments in international commerce. Documentation is available to establish the U.S. or foreign origin of the hangers.

The hangers will be owned by the importers of the garments. FRM states that it will be the "contract recycler" of the hangers. Once the hangers commence their use as described herein, FRM will be able to keep track of the total hanger pool.

FRM has provided samples for the three most popular hanger styles: #484 (17" top hanger), #2012 (12" bottom hanger), and #4012 (12" bottom hanger with soft pad). FRM states that these three styles comprise 80 percent of the total hanger volume at issue. Other style numbers are 479, 485, 498, 1200, 1203, 2008, 2010, 2014, 3328, 5245, and 5265.


Whether the subject hangers are eligible for classification under subheading 9803.00.50, HTSUS.


Subheading 9803.00.50, HTSUS, is a duty-free provision which provides:

Substantial containers and holders, if products of the United States (including shooks and staves of United States production when returned as boxes or barrels containing merchandise), or if of foreign production and previously imported and duty (if any) thereon paid, or if of a class specified by the Secretary as instruments of international traffic, repair components for containers of foreign production which are instruments of international traffic, and accessories and equipment for such containers, whether the accessories and equipment are imported with a container to be reexported separately or with another container, or imported separately to be reexported with a container... [Emphasis supplied.]

Subheading 9803.00.50 is the only subheading in Subchapter III, Chapter 98, HTSUS. U.S. Note 1(a) to Subchapter III, Chapter 98, provides, in pertinent part:

This subchapter covers only the following:

(a) Substantial containers or holders which are subject to tariff treatment as imported articles and are:

(i) Imported empty and not within the purview of a provision which specifically exempts them from duty; or

(ii) Imported containing or holding articles, and which are not of a kind normally sold therewith or are entered separately therefrom; ...

General Rule of Interpretation 5(b), HTSUS, provides:

Subject to the provisions of rule 5(a) above, packing materials and packing containers entered with the goods therein shall be classified with the goods if they are of a kind normally used for packing such goods. However, this provision is not binding when such packing materials or packing containers are clearly suitable for repetitive use.
[Emphasis supplied.]

FRM asserts that the second sentence of GRI 5(b) is applicable in that the hangers are clearly suitable for repetitive use. It states that its hangers are distinguishable from other hangers in that FRM "is able to prove that the hangers will be reused to transport garments from their origin into the United States and that the same pool of hangers will be associated with the transportation of many different garments during their useful life."

In Holly Stores, Inc. v. U.S., 697 F.2d 1387, 1388 (1983), the Court of Appeals for the Federal Circuit stated with respect to former General Headnote 6(b):

"Reuse" in this context has been consistently interpreted to mean practical, commercial reuse, not incidental reuse. Fontana Hollywood Corp. v. United States, 64 Cust. Ct. 204, C.D. 3981 (1970), relying on Tariff Classification Study, Seventh Supplemental Report (Aug 14, 1963) at 99.

The court in Holly Stores rejected the concept of reuse with respect to the hangers at issue there based upon the lower court's finding that only about one percent of the hangers were reused in any manner at all, and that those uses were noncommercial. The court did accept the facts that the hangers were of fairly durable construction and that it would be physically possible to reuse them.

In Ruling 084068 dated July 21, 1989, we stated:

The classification of the plastic hangers with the garments with which they are imported in NYRL 837830 was based on the decision in Holly Stores, Inc. v. The United States ... Although this decision involves the interpretation of the meaning of "reuse" as it appears in General Headnote 6(b) of the Tariff Schedules of the United States (TSUS), we believe it is applicable in understanding the meaning of "repetitive use" as it appears in General Rule of Interpretation (GRI) 5(b) of the Harmonized Tariff Schedule of the United States. Each provision addresses the issue of when containers imported with goods are classifiable with those goods or classifiable separately.

... If considered designed for, or capable of, reuse, the hangers were to be treated as separate articles of commerce; if not, they were to be treated as part of the value of the clothing with which they were shipped and dutied at the rate for the clothing,

Within the context of 19 CFR 10.41a and instruments of international traffic, we have held that "repeated use" means "more than twice." See Ruling 108658.

Our examination of the hangers submitted as samples reveals that they are of durable construction. We therefore conclude that they are physically capable of, and suitable for, reuse or repetitive use.

As stated above, FRM states that the hangers will be reused and "will be associated with the transportation of many different garments during their useful life."
The reuse which FRM describes and proposes is a "commercial reuse," i.e., the hangers will continue to be used in the commercial transportation of garments. Based upon these assertions, we accept as a factual premise, and for the purpose of this ruling we make a factual determination, that the subject hangers are intended to be reused on a consistent basis.

Because the hangers are durable and capable of reuse, we determine that they are "substantial holders" within the meaning of subheading 9803.00.50, HTSUS.

We also find that the requirements of U.S. Note 1 to Subchapter III, Chapter 98, HTSUS are met in that the hangers will be imported holding articles and the hangers are not of a kind normally sold with the articles which they hold. See U.S. Note 1(a)(ii), Subchapter III, Chapter 98, supra.

FRM has also asserted that documentation is available to establish the U.S. or foreign origin of the hangers. If the hangers are of foreign origin, they will have been previously imported and duty (if any) paid.

Based upon the facts and findings, as detailed supra, we determine that the subject hangers are eligible for treatment under subheading 9803.00.50, HTSUS.


The subject hangers are eligible for treatment under subheading 9803.00.50, HTSUS.


Jerry Laderberg

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