CLA-2-64:RR:NC:TP:347 G85607
Mr. Harvey Arias
Romica USA, Inc.
8730 NW 36th Avenue
Miami, FL 33147
RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of protective textile footwear from Mexico and the United States; Article 509
Dear Mr. Arias:
In your letter dated January 5, 2001, you requested a ruling on the status of snow boots from China, Taiwan, under the NAFTA.
You state that until now your normal procedures have been to import man-made fabric snow boot uppers from China under quota category 669 and Harmonized Code 6406.10.9040. You stitch the uppers to PVC bottoms in Miami, and then sell the completed boots in the U.S. market. In the year 2001, you plan to change your model to any one of the scenarios listed below. For each scenario, you ask for answers to the following questions:
Duties and/or quota payable by the importer of raw material or shoe components in Mexico or the Dominican Republic.
Under which set of rules can the raw material or shoe components be converted to a NAFTA-qualified product when the raw material or cut shoe components are changed to stitched shoe uppers in Mexico or the Dominican Republic?
What duty or quota, if any, would be payable by us, the U.S. importer, for the NAFTA-qualified product?
What duty or quota would our Canadian customers be liable for when the completed NAFTA-qualified product is imported into Canada from the U.S.?
What duty or quota would our European customers be liable for when the completed NAFTA-qualified product is imported into Europe from the U.S.?
We can provide you with importing information on items you plan to import to the United States only, therefore, we cannot answer your questions for #1, #4, and #5, above.
These are your possible scenarios as you describe them:
Model A:
Man-made fabric snow pack raw material from Taiwan and China is cut into shoe upper components in China and shipped to an independent factory in Mexico.
The shoe upper components are assembled (stitched) into shoe uppers in Mexico.
The completed shoe uppers are shipped to Miami.
The uppers are stitched to PVC outsoles in Miami.
The completed boots are exported to Canada.
Model A-1:
As Model A except that you would own the factory in Mexico.
Model A-2:
As Model A except that the raw material from Taiwan and China would be cut in Mexico.
Model B:
As Model A except the components are assembled into uppers in the Dominican Republic.
Man-made fabric snow pack raw material from Taiwan and China is cut into shoe upper components in China and shipped to the Dominican Republic.
The shoe upper components are assembled (stitched) into shoe uppers in an independent factory in Dominican Republic.
The completed shoe uppers are shipped to Miami.
The uppers are stitched to PVC outsoles in Miami.
The completed boots are exported to Canada.
Model B-1:
As Model B except that the raw material from Taiwan and China is cut in the Dominican Republic.
Model C:
As Model A except that shoe upper raw material is made in the U.S.A. and sent to an independent factory in Mexico for cutting and stitching into shoe uppers.
Man-made fabric snow pack raw material from the U.S.A. is shipped to an independent factory in Mexico.
The shoe upper raw material is cut into components, and assembled (stitched) into shoe uppers in an independent factory in Mexico.
The completed shoe uppers are shipped to Miami.
The uppers are stitched to PVC outsoles in Miami.
The completed boots are exported to Canada.
Model C-1:
As Model C except you would own the factory in Mexico.
Model D:
As Model C except that shoe upper raw material is made in the U.S.A. and sent to the Dominican Republic for cutting and stitching into shoe uppers.
Man-made fabric snow pack raw material from the U.S.A. is shipped to a third party factory in Dominican Republic for cutting and stitching into shoe uppers.
The shoe upper raw material is cut into components, and assembled (stitched) into shoe uppers in the third party factory in Dominican Republic.
The completed shoe uppers are shipped to Miami.
The uppers are stitched to PVC outsoles in Miami.
The completed boots are exported to Canada.
You have enclosed the following samples:
A packet of cut shoe upper components
An assembled (stitched) shoe upper.
A completed boot.
From the samples you have provided, we have determined that the assembled (stitched) boot uppers for all model scenarios, before they are made into completed boots, are “unformed uppers” for purposes of chapter 64, Harmonized Tariff Schedule of the United States (HTSUS).
The boots for models A, A-1, A-2, B, B-1, and D do not qualify for preferential treatment under the NAFTA because one or more of the non-originating materials used in the production of the goods will not undergo the change in tariff classification required by General Note 12(t)/64, Harmonized Tariff Schedule of the United States (HTSUS). Subdivision (t) of General Note 12 for Chapter 64, states that in order to qualify for NAFTA there must be “a change to headings 6401 through 6405 from any heading outside that group, except from subheading 6406.10…” Subheading 6406.10 of the HTSUS covers both formed and unformed uppers. In the United States, the unformed uppers of heading 6406.10 are turned into complete footwear of heading 6404. Therefore, your footwear does not qualify for NAFTA duty preference for these Model scenarios.
The applicable tariff provision for the finished boots of models A, A-1, A-2, B, B-1, and D will be 6404.19.20, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for footwear, in which the upper’s external surface is predominately textile materials, in which the outer sole’s external surface is predominately rubber and/or plastics, which is not “athletic” footwear, and which is designed to be worn over, or in lieu of, other footwear as a protection against water, oil, grease or chemicals or cold or inclement weather. The general rate of duty will be 37.5% ad valorem.
The boots for models C and C-1, being made entirely in the territory of the United States and Mexico using materials which themselves were originating, will satisfy the requirements of HTSUSA General Note 12(b)(iii) which states that “goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as ‘goods originating in the territory of a NAFTA party’ only if—they are goods produced entirely in the territory of Canada, Mexico and/or the United States exclusively from originating materials..” If this is the case, the merchandise will therefore be entitled to a 17.5% rate of duty under the NAFTA upon compliance with all applicable laws, regulations, and agreements.
The applicable tariff provision for the finished boots of models C and C-1will be 6404.19.20, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for footwear, in which the upper’s external surface is predominately textile materials, in which the outer sole’s external surface is predominately rubber and/or plastics, which is not “athletic” footwear, and which is designed to be worn over, or in lieu of, other footwear as a protection against water, oil, grease or chemicals or cold or inclement weather. The special rate of duty from Mexico will be 17.5% ad valorem.
In determining the country of origin for the boots, we used the NAFTA rules of origin described in CFR 102.11 (a)(3) which states that the country of origin of a good is the country in which “each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in 102.20...” The country of origin rules set out in CFR 102.20 for chapter 64 states that in order to determine origin for a good “a change to heading 6401 through 6405 from any other heading outside that group, except from formed uppers” must be met. Since you will be importing “unformed” uppers into the United States to be produced into completed boots there, the country of origin for the footwear will be the United States.
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).
This ruling letter is binding only as to the party to whom it is issued and may be relied on only by that party.
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Richard Foley at 212-637-7089.
Sincerely,
Robert B. Swierupski
Director,
National Commodity
Specialist Division