Federal Circuit Upholds CIT Decision to Classify Ziploc Bags Under HTS Heading 3923

The U.S. Court of Appeals for the Federal Circuit on June 2 upheld a Court of International Trade ruling that S.C. Johnson's Ziploc brand reclosable sandwich bags are classified under Harmonized Tariff Schedule heading 3923 as articles for the conveyance or packing of other goods, dutiable at 3%, as opposed to heading 3924 as plastic household goods, which would be eligible for duty-free Generalized System of Preferences benefits program treatment. Since the bags could fall under either heading 3923 or 3924, heading 3923 is the correct home for the bags since its terms are "more difficult to satisfy and describe the article with a greater degree of accuracy and certainty," the Federal Circuit said.

S.C. Johnson had argued that the Ziploc bags were not classifiable under heading 3923 at all, because that heading covers goods used for commercial shipping purposes, and should continue to be interpreted as it has been historically. In the long-obsolete Tariff Schedule of the U.S. item 772.20, the relevant tariff provision covered containers "chiefly used for the packing, transporting, or marketing of merchandise." The Federal Circuit, however, noted that the language of heading 3923 differs from that of the TSUS heading, in that it now covers articles for the "conveyance of goods," implying non-commercial use. The explanatory notes to the heading also now include bags and sacks, something their predecessor expressly excluded, CAFC said.

S.C. Johnson also argued that heading 3924 is a use provision, and its Ziploc bags, used in households, should therefore be classified in that heading. It said a line of cases from a CIT predecessor court found "household utensils" is a use provision, so "household articles" described in heading 3924 should be treated in the same way. But even if "household utensils" were seen as a use provision, it would not change the outcome of the case, the court said. "As we have noted, in contrast, the term 'Article' does not suggest a type of use and should not be construed as creating a use provision," the decision said. "We conclude that HTSUS heading 3924 encompasses goods of plastic commonly found in the home and affirm the Trade Court’s determination that the heading is an eo nomine provision," CAFC said.