CLA-2 R:C:M 954769 DFC

Area Director of Customs
J.F.K. Airport
Building 178
Jamaica, New York 11430

RE: IA 47/93; Footwear; Adhesive; Glue; Naftone, Inc. V. United States; United States v. Elbe Products Corp; HRL's 075831, 082365, 082614, 086030, 732769

Dear Sir:

This request for internal advice was initiated by a letter dated April 20, 1993, from counsel on behalf of Aris-Isotoner, Inc. It concerns the legal test and testing methodology to be employed by Customs in determining, for the purpose of classification under the Harmonized Tariff Schedule of the United States (HTSUS), the relative weights of materials used in the construction of imported footwear. Issues raised in a supplemental letter dated December 30, 1993 [along with exhibits and samples of innersoles], at a conference in our office on March 16, 1995, as well as in a letter dated July 21, 1995, were considered in preparing this ruling.

FACTS:

Counsel for the inquirer describes the merchandise as follows:

The footwear involved consists of Aris Isotoner comfort slippers styles 98466 and 98484. Each of thee slipper is manufactured in the Philippines from textile, leather, and plastic/rubber components. The slippers feature uppers composed of a nylon/spandex textile material, and outer soles of pigsplit leather. In addition, each slipper features a 9mm thick foam plastic midsole, which is bonded by adhesive to the upper surface of the leather outersole and to the bottom surface of the slipper's textile midsole. In both products, the combined weight of the textile, rubber and plastic components account for at least 50% of the slipper's total weight.

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ISSUE:

Whether the weight of adhesives which have bonded to, or been absorbed by, plastic components of the footwear, must be listed as a separate material appearing in the footwear, or added to the weight of the plastic component to which it has bonded.

Do the slippers contain 10% or more by weight of rubber or plastics?

LAW AND ANALYSIS:

Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI's). GRI 1 provides that "classification shall be determined according to the terms of the headings and any relative section or chapter notes, and, provided such headings or notes do not otherwise require, according to [the remaining GRI's]." In other words, classification is governed first by the terms of the headings of the tariff and any relative section or chapter notes.

The provisions under consideration are as follows:

6404 Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textiles materials:

* * * *

6404.20 Footwear with outer soles of leather or Composition leather: Not over 50 percent by with of rubber or plastics and not over 50 percent by weight of textile materials and rubber or plastics with at least 10 percent by weight being rubber or plastics:

6404.20.20 Valued not over $2.50/pair 15%

6404.20.40 Valued over $2.50/pair 10%

6404.20.60 Other 37.5%

Headquarters Ruling Letter (HRL) 082614 dated October 17, 1988, interpreted the language of subheading 6404.20/40, HTSUS, which provides for footwear with outer soles of

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leather or composition leather and uppers of textile materials not over 50 percent by weight of rubber or plastics and not over 50 percent by weight of textiles materials, rubber and plastics with at least 10 percent by weight being rubber or plastics, valued not over $2.50/pair. The ruling held that these subheadings are limited to footwear with fabric uppers and leather or composition leather soles which are under 10 percent by weight of rubber and plastics or not over 50 percent by weight or textile materials, rubber and plastics. Therefore, in order for the instant footwear to be classified in subheading 6404.20.20, HTSUS, its rubber and plastic components must comprise less than 10 percent of the total weight of the footwear. Also, see HRL 086030 dated May 22, 1990.

Both of the styles involved are over 50% by weight of textile materials. Based on Customs laboratory reports, many of the inquirer's styles of footwear are over 10% by weight of rubber and plastics. You maintain that this fact would make those styles dutiable at the rate of 37.5% ad valorem under subheading 6404.20.60, HTSUS.

Counsel for the inquirer asserts that when properly weighed, the rubber and plastics components of the slippers account for less than 10% of the slippers' weight. Consequently, slipper styles 98466 and 98484 are classifiable as footwear with uppers of textile materials and outer soles of leather, valued over $2.50/pair, under subheading 6404.20.40, HTSUS.

Counsel asserts that all components are weighed before the footwear is assembled. One of the components used is a foam plastic midsole in between the insole and the outsole. It is claimed that this plastic foam material invariably weighs less than 10% of the weight of the entire shoe.

Counsel believes that in weighing the rubber/plastic content of the slippers, the Customs laboratory has included in the weight of the foam plastic midsole the weight of the adhesive used to bond the plastic foam layer to t he outer sole. Weighed separately, the foam layer accounts for less than 10% of the weight of the footwear. By including in the weight of the "plastic" midsole the weight of the dried adhesive attached thereto, or which has been absorbed by and bound in the midsole, Customs had substantially increased the weight of the midsole to an amount that is in excess of 10% of the weight of the shoe. Counsel urges that the weight of the glue should be separated from the foam plastic midsole and listed as a separate substance in the laboratory report. Counsel believes that this will reduce the weight of the rubber and plastic to less than 10% of the weight of the shoe.

It must be noted that and assumption is being made by counsel that the glue that is being absorbed by the foam plastic is making enough of a difference in the weight to push it over the watershed mark of 10%. Of the 35 styles that were tested by the Customs laboratory, the resulting reports have reflected a variance in the percentage of rubber and plastic ranging from 5.1% to 15.6%. Given this variance it seems much more believable that the factory is not controlling the weight as strictly as counsel contends.

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In support of his contention that Customs must consider the weight of the adhesive separately, counsel refers to rulings on a variety of products including footwear. A discussion of these rulings follows.

Under the Tariff Schedules of the United States (TSUS), the precursor of the HTSUS, Customs initially took the position that although many plastics materials had adhesive qualities, in those instances where the materials had adhesive qualities, in those instances where the materials were imported in bulk and met the definitions of synthetic plastics materials, as reflected in Headnote 2, Part 4A, Schedule 4, TSUS, they would be classified as plastics materials. However, this view was modified by the court in Naftone, Inc. v. United States, 74 Cust. Ct. 1, C.D. 4578 ( (1975), which concerned the classification of a plastic material used as a cement. The court noted that the evidence established overwhelmingly that the product was cement within the common meaning of the term. It went on to state that a substance which is specifically designed for the cementing of materials to each other and which in its imported condition can accomplish this purpose, is a cement within the meaning of the term.

In HRL 082365 dated March 30, 1989, Customs held that a urethane sealant adhesive used to seal windshields to the frame of an automobile was properly classifiable under the provision for cements, not specially provided for, in item 494.60, Tariff Schedules of the United States (TSUS), rather then under the provision for polyurethane resins in item 409.14, TSUS. The basis for this decision, as in Naftone, supra, was that even though the product was a plastic material, it was specifically designed and used as an adhesive which mandated its classification as cement.

In HRL 075831 dated February 28, 1986, Customs took the position that adhesives are not considered "rubber or plastics" in component material in chief value determinations. Specifically, Customs stated:

Another question has arisen as to whether the costs of Adhesives may be subtracted from the component manufacturer's price for the rubber/plastic subassembly. It is our position that the cost of the adhesive may be subtracted from the rubber/plastics cost based on a ruling from this office which held in effect that cost of cement whose principal constituent element was rubber/plastics could not be allocated to rubber/plastics cost in a component material determination but was a separate component material in itself. . . .

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Counsel agrees that Chapter 64, HTSUS, requires that special treatment be accorded to certain footwear component materials for classification purposes. Note 3 Chapter 643, HTSUS, provides, as follows:

3. For the purposes of this chapter, the expression "rubber or plastics includes any textile material visibly coated (or covered externally) with one or both of those materials

Counsel points out that this is the only provision in the law providing that materials comprising footwear be treated otherwise than as separate materials. The rule applies to coated or covered textile materials, but as a matter of law, it cannot be extended by concept or implication to require that plastic materials and adhesive materials be treated as a single material. See, e.g., United states v. Elbe Products Corp., 68 CCPA 72, C.A.D. 1267 (1981).

With respect to the classification of footwear, counsel cites HRL 732769 dated February 9, 1990, involving a country of origin marking problem of a baby shoe upper. In this instance Customs identified connective materials, such as thread, as a separate component. Counsel argues that where, like the thread in HRL 732769, the adhesive material is a separately identifiable component, and is relatively heavy in comparison to the materials it used to bond, there is no legal justification for ignoring the adhesive.

Although adhesives are not considered "rubber or plastics" in component material in chief value determinations, we are not persuaded that the court cases and HRL's cited by counsel are sufficient precedent for a requirement that the weight of the adhesives which have been bonded to, or absorbed b the plastic components of the footwear, must be added as a separate material appearing in the footwear. If the drafters of Chapter 64, HTSUS, wanted adhesive to be separately considered they could have done so. A cardinal principle of customs law is that merchandise is classifiable in its condition as imported. In this instance the adhesive is a "used" adhesive which can no longer be used as such. It has become part of the foam plastic midsole in which it has been absorbed. It is impracticable to remove adhesive which has been absorbed by the foam plastic midsole without degrading the absorbent host material.

Even if we were to concede that the weight of the adhesives must be listed as a separate material appearing in the footwear, we would not be persuaded that styles 98466 and 98484 contain less than 10% by weight of rubber or plastics. Our reasons for this conclusion rests on the analyses by the Customs laboratory of a private laboratory's test results relating to the weight 6

of adhesives found in the subject styles. Further, the Customs laboratory has submitted its comments with respect to the weight analysis of foam plastic midsoles used in the production of the subject slippers by the manufacturer of the slippers.

With respect to the foam inner soles, the Customs laboratory made the following findings:

Our laboratory tests on the insoles are similar to those weights reported. We observe the following:

1. The results reported are only valid of the size and density of the insole materials (with and without adhesive) are the same. It appears that the submitted insoles (with and without adhesive) are of two different materials.

2. The sets of insoles (with and without adhesive) also appear to have been cut with a different set of dies.

3. There appears to be an inconsistency in the weight of adhesive applied to the X-large insole. This weight is less than would be expected when compared to the large, medium and small insosles.

4. There are indications that the actual weight of adhesive varies between each of the same size insoles.

Test reports of analyses by manufacturer and private laboratory have been examined and evaluated carefully. We note the following:

1. These results appear to be the production run figures instead of actual determined based on analyses.

2. It is highly unlikely that a natural component such as leather was found to have identical weights to six significant figures as reported for both styles 98484 and 98486. The maufacturer also has the identical figures for both styles. The same holds true for figures for both styles. The same holds true for almost each and every component mentioned in both sets of their results.

3. If production run figures were used, there is no indication of correction for the loss of water and/or solvents normally used as carriers for adhesives.

4. The reported differences in weights of the different components of the same styles of footwear found by the private laboratory and the manufacturer and those by the Customs laboratory may be an indication that the problem is in part one of quality 7

control and the use of production run figures rather than actual findings based on analyses.

HOLDING:

The weight of the adhesives which have bonded to, or been absorbed by, plastic components of the footwear, should be listed as a rubber/plastic material rather that as a separate material, viz, adhesive.

Styles 98466 and 98484 are dutiable at the rate of 37.5% ad valorem under subheading 6404.20.60, HTSUS.

This decision should be mailed by your office to the internal advice requestor no later than 60 days from the date of this letter. On that date the Office of Regulations and Rulings will take steps to make the decision available to Customs personnel via the Customs Ruling Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division