CLA-2 OT:RR:CTF:TCM HQ H249657 TNA
Apparel, Footwear, and Textile Center of Excellence and Expertise
33 New Montgomery St., 16th floor
San Francisco, CA 94105
Attn: Dora Murphy, Director, Apparel, Footwear, and Textile Center of Excellence and
Expertise
Re: Protest and Application for Further Review No: 2704-13-102082; Classification of Nike Free Run + 3 SHIELD tennis shoes
Dear Port Director:
The following is our decision regarding Protest and Application for Further Review No. 2704-13-102082, timely filed on October 8, 2013, on behalf of Nike USA, Inc. (“Nike” or “Protestant”) regarding the tariff classification of footwear under the Harmonized Tariff Schedule of the United States (HTSUS). In coming to our decision, we have taken into account arguments made to members of my staff in a teleconference on May 19, 2014, and in a supplemental submission dated May 28, 2014.
FACTS:
The subject merchandise consists of women’s lace-up athletic footwear named Nike Free Run + Shield. At issue are style numbers 535857 and 536840. Both styles have uppers of less than 90 percent rubber or plastic, and outer soles of rubber or plastic. The uppers of both styles contain multiple cross-shaped cutouts along the back and sides of the footwear. Style numbers 535857 and 536840 are sneakers with shoelaces of the type commonly used for running or other sports. When worn, they cover the user’s entire foot, up to just below the ankle. Samples of both styles of the subject merchandise were received and examined by this office. The samples have identical features and differ only in size and color.
The two samples of the subject merchandise were also examined by U.S. Customs and Border Protection’s (“CBP’s”) National Import Specialist (“NIS”) for footwear. To determine whether water would penetrate the subject merchandise, the NIS submerged the samples in a sink that contained two inches of water to simulate a puddle of that depth. Almost immediately, water began to enter the sneakers through the multiple cross-shaped cutouts in the rear of the shoes.
The subject merchandise entered between October 7, 2012 and October 10, 2012. The subject merchandise was liquidated on August 23, 2013, in subheading 6402.99.33, HTSUS, as “Other footwear with outer soles and uppers of rubber or plastics: Other footwear: Other: Other: Other: Footwear 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.” Protestant claims the correct classification is in subheading 6402.99.33, HTSUS, and also claims that the subject merchandise is eligible for a reduced duty rate under subheading 9902.23.78, HTSUS, which provides for “Women's footwear (except vulcanized footwear and footwear with waterproof molded bottoms, including bottoms comprising an outer sole and all or part of the upper), valued over $20/pair, designed to be worn in lieu of, but not over, other footwear as a protection against water, oil, grease or chemicals or cold or inclement weather where such protection includes protection against water that is imparted by the use of a coated or laminated textile fabric (provided for in subheading 6402.99.33).”
ISSUE:
Whether the subject footwear meets the definition of “protection” under subheading 6402.99.33, HTSUS?
LAW AND ANALYSIS:
Initially, we note that the matter protested is protestable under 19 U.S.C. §1514(a) (2) as a decision on classification. The protest was timely filed, within 180 days of liquidation of the first entry. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2) (B) (ii), (iii) (codified as amended at 19 U.S.C. § 1514(c) (3) (2006)).
Further Review of Protest No. 2704-13-102082 is properly accorded to Protestant pursuant to 19 C.F.R. § 174.24(b) because Protestant alleges that the specific circumstances of this protest have not been ruled upon by the Commissioner of Customs or his designee or the Customs courts. Specifically, Protestant argues that neither CBP nor the Customs courts have determined whether the subject merchandise meets the definition of the term “protection” in subheading 6402.99.33, HTSUS.
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in their appropriate order.
The HTSUS provisions under consideration are as follows:
6402 Other footwear with outer soles and uppers of rubber or plastics:
Other footwear:
6402.99 Other:
Other:
Other:
6402.99.33 Footwear 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
Other:
6402.99.90 Valued over $12/pair
9902.23.78 Women's footwear (except vulcanized footwear and footwear with waterproof molded bottoms, including bottoms comprising an outer sole and all or part of the upper), valued over $20/pair, designed to be worn in lieu of, but not over, other footwear as a protection against water, oil, grease or chemicals or cold or inclement weather where such protection includes protection against water that is imparted by the use of a coated or laminated textile fabric (provided for in subheading 6402.99.33)
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
We begin by noting that this dispute is at the eight-digit level of classification. We agree with Protestant that the subject footwear is described by the terms of subheading 6402.99, HTSUS. Thus, the dispute is over whether the subject merchandise is designed to be “worn over, or in lieu of, other footwear as protection against water, oil, grease or chemicals or cold or inclement weather” within the meaning of subheading 6402.99.33, HTSUS.
In Treasury Decision (“T.D.”) 93-88, dated October 25, 1993, CBP stated that “footwear is designed to be a ‘protection’ against water, oil or cold or inclement weather only if it is substantially more of a ‘protection’ against those items than the usual shoes of that type.” Thus, footwear that simply provides more protection than going barefoot would not qualify as protection under this definition. See T.D. 93-88. Furthermore, T.D. 93-88 provides, in pertinent part, that:
A. Footwear that is a “protection” against water includes:
1. Any item which will keep your foot dry if you linger in a pool of water which is more than two inches deep unless:
a. It has a rigid, thick, clog bottom but no protective features- or
b. In normal use, water will get in over the top of the shoe or boot…
c. It is a women’s molded high heeled shoe in which the top of the foot will be exposed to the rain- or
d. It is a molded downhill ski boot…
In HQ W968301, dated March 13, 2007, CBP classified boots with a “heavily treaded outer sole made of thick rubber” that measured three inches and found that “these treads are designed to offer maximum traction in slippery or wet conditions… this [sole] will offer enough protection to allow the wearer to linger in a pool of water which is more than 2 inches deep.” In addition, the boots did not contain any of the four exceptions enumerated in T.D. 93-88 which would prevent classification as protective footwear. As a result, CBP classified these boots as protective footwear of subheading 6402.99.33, HTSUS. See HQ W968301.
On the other hand, in HQ 967509, dated March 3, 2005, CBP found that a below-the-ankle hiking shoe was not a “protection” under the T.D. 93-88’s definition because it was not substantially more water resistant than ordinary hiking boots. In so doing, we confirmed that T.D. 93-88’s definition of “protection” requires that footwear be “substantially more of a protection” against water, oil or cold or inclement weather than the usual shoes of that type. The boots contained microfiber fabrics and plastic in the upper; the importer asserted they were designed to make the boots water resistant, but CBP found that they did not actually render the shoe more water resistant than other hiking boots. To the contrary, this microfiber kept the shoe looking newer and was easier to clean than other non-water resistant materials, but lacked significant water-repellent properties. As a result, CBP found that the boots as a whole lacked features that would repel water and that the boots would not keep the foot any drier than ordinary hiking boots. See HQ 967509.
In the present case, Protestant claims that the subject merchandise has been treated with a durable water repellant (“DWR”) to render it protective. Even assuming, arguendo, that such a treatment was applied, the fact remains that the subject merchandise’s upper contains cross-shaped holes in it. CBP’s tests on the subject merchandise showed that water visibly entered these holes in the subject shoes almost immediately. As a result, we find that the subject merchandise would not keep a user’s foot any drier than ordinary shoes.
Protestant has submitted Laboratory Report Number ARHL0273853, dated March 21, 2013, from an independent laboratory, Consumer Testing Laboratories, Inc. Citing only CBPL Method 64-0, Consumer Testing Laboratories came to the conclusion that the subject merchandise’s ESAU, including any accessories and/or reinforcements, contains approximately 78 percent rubber or plastics, and approximately 22 percent textile. CBP does not dispute these findings, as CBPL Method 64-01 is used to determine ESAU by planimeter and image analysis, the identity of footwear components, footwear construction, and weight percentage of footwear’s components. See http://www.cbp.gov/ trade/basic-import-export/labs-scientific-svcs/technical-documents/lab-methods/chap-64. However, the determination of the ESAU alone is not relevant to the issue at hand. Furthermore, Consumer Testing Laboratories then goes on to conclude, based only on the marketing materials to which it cites, that the subject merchandise met the definition of protective footwear of subheading 6402.99.33, HTSUS. Yet, there is no evidence that Consumer Testing Laboratories performed any tests on the subject merchandise to determine whether it was “protection” within the meaning of T.D. 93-88.
In the May 19 teleconference, Nike also argued that prior CBP rulings found similar merchandise to be “protection” within the meaning of subheading 6402.99.33, HTSUS, thus giving their competitors an unfair advantage if Nike’s merchandise is not classified the same way. CBP located the background files of the prior rulings in question and examined the information contained therein. In doing so, we found that the merchandise at issue in each of these prior rulings is distinguishable from Nike’s footwear. In NY N045539, dated December 9, 2008, and NY N042384, dated November 5, 2008, CBP classified athletic shoes composed in part with specially treated textile materials. In both rulings, the importer supplied documents showing that the footwear’s fabric was treated by the supplier before the footwear was assembled, and that the fabric was then treated a second time, after the final assembly. In this second treatment, another coating of DWR was applied to the entire shoe. Any holes in these shoes that remained after these treatments were tiny openings between the fibers of the fabric. This is in contrast to the subject merchandise, where not every part of the shoe is treated with DWR, and the cross-shaped holes in the fabric were large cut-outs. As such, the merchandise in NY N045539 and NY N042384 met the “protection” test of subheading 6402.99.33, HTSUS, whereas the subject merchandise does not.
The merchandise at issue in NY N024364, dated March 26, 2008, and NY N051582, dated February 13, 2009, had received similar treatment to that of NY N045539 and NY N042384. In NY N024364, documentation provided by the importer showed that the textile material used to manufacture both styles of footwear at issue were submerged in flourine solution prior to the footwear’s assembly, meaning that the fibers were completely coated. Secondly, this documentation showed that every part of at least one of these styles had been treated. In NY N051582, documentation submitted for both styles of footwear at issue showed that the textile material of the upper was treated with DWR and, in addition, there was a polyurethane membrane laminated to the textile material. As such, both of these sets of footwear met the definition of “protection” under subheading 6402.99.33, HTSUS. Each of these situations can be distinguished from the present case, where Nike’s footwear contained one coating of DWR that did not cover the entire shoe. We also note again that the presence of the cutouts in Nike’s shoes allowed water to flow into them quickly, thus failing the test of “protection” under subheading 6402.99.33, HTSUS.
Next, we note that Nike’s submission in support of its protest and AFR states that Nike’s advertising of the subject merchandise as containing water-resistant technology is a factor in determining whether footwear is “protection.” In support of this assertion, Nike cites to CBP’s Informed Compliance Publication (“ICP”) entitled “Footwear” and dated April 2012. Nike asserts that the ICP’s section on protection states that footwear “labelled and advertised as waterproof or water resistant is protective.”
In response, we note that the ICP states the following:
Footwear that is a “protection” against water includes footwear:
Designed for outdoor use with “Gore-Tex®” or other water resistant fabric liners.
Labeled or advertised as “water-proof” or “water resistant.”
Having seams reinforced with water resistant tape.
Garden Clogs (except open toe/heel or ventilated clogs).
Items worn over other footwear to protect against water or inclement weather, e.g., galoshes.
In contrast to Nike’s interpretation, we do not read this language to mean that if the subject merchandise is advertised as being protective, then it is considered protective. To the contrary, advertising is, at most, one factor of many in the determination. Most importantly, the merchandise’s advertising means little in the face of evidence that the merchandise is not, in fact, protective. In the present case, CBP testing showed that when the merchandise was submerged in two inches of water, the water seeped through the footwear almost immediately. This is enough to show that the subject merchandise does not meet the definition of “protection,” marketing materials notwithstanding.
CBP’s NIS found that when submerged in two inches of water as required by T.D.93-88, water immediately appeared on the inside of the sneakers. In accordance with these findings and the rulings mentioned above, the subject merchandise cannot be classified as “protective” footwear of subheading 6402.99.33, HTSUS. As such, the subject merchandise is classified in subheading 6402.99,90, HTSUS, which provides for “Other footwear with outer soles and uppers of rubber or plastics: Other footwear: Other: Other: Other: Other: Valued over $12/pair.”
Lastly, Protestant claims classification in subheading 9902.23.78, HTSUS, a temporary provision that allows a duty reduction on certain merchandise entered before December 31, 2012. Specifically, subheading 9902.23.78, HTSUS, provides for a duty reduction on protective footwear of subheading 6402.99.33, HTSUS. However, the subject merchandise cannot be considered protective footwear of subheading 6402.99.33, HTSUS, for the reasons set out above. As a result, it is not eligible for the temporary duty reduction of subheading 9902.23.78, HTSUS.
HOLDING:
By application of GRI 1, the subject footwear is classified in heading 6402, HTSUS. It is specifically subheading 6402.99.90, HTSUS, which provides for “Other footwear with outer soles and uppers of rubber or plastics: Other footwear: Other: Other: Other: Other: Valued over $12/pair.” The general column one rate of duty is 20% ad valorem.
You are instructed to deny the protest, except to the extent that reclassification of the merchandise as indicated above results in a partial allowance.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP website at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division