CLA-2-64:OT:RR:NC:N2:247

Ms. Brennan E. O’Gorman
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP
599 Lexington Ave, FL 36
New York, NY 10022

RE:      The classification, country of origin, and marking of footwear parts from China Dear Ms. O’Gorman:

In your letter dated January 12, 2024, you requested a tariff classification ruling on behalf of your client American Sole, LLC. Your letter included an image and a description of the manufacturing process of a finished boot composed of imported parts.

Footwear uppers, insoles/footbeds, and outer sole units imported from China, will be made into finished footwear, identified as style “Brunt,” after importation. The leather work boot-style uppers are shaped by lasting and sewing. They feature waterproof linings and textile insole boards.  Each upper is imported with a hole measuring at least the size of a nickel cut through the bottom layers.  Shaped footwear uppers, having holes approximating the size of a nickel or lager at the bottom, are not considered “closed” and considered “unformed.”  The rubber outer sole is imported with an attached polyurethane (PU) midsole.  Two insoles/footbeds per boot will be made of either textile materials or rubber/plastics materials (ethylene vinyl acetate (EVA) and PU.)  The submitted picture shows a textile label depicting an American flag sewn-in on the lateral side of the foot portion.  Further processing such as assembling the imported parts, plugging/closing the upper’s bottom, attaching an outer sole, cleaning and packing will be done in the United States.  The plugs, gaskets, etc. required to complete the uppers will be imported separately. 

The applicable subheading for the unformed uppers will be 6406.10.6500, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for Parts of footwear including uppers whether or not attached to soles other than outer soles); Uppers and parts thereof, other than stiffeners: Other: Of leather.  The rate of duty will be free.

When constructed primarily of textile materials, the applicable subheading for the insoles/footbeds will be 6406.90.1540, HTSUSA, which provides for Parts of footwear (including uppers whether or not attached to soles other than outer soles); removable insoles, heel cushions and similar articles; Other: Of other materials: Of textile materials: Of man-made fibers: Other. The rate of duty is 14.9 percent ad valorem. 

When constructed primarily of rubber/plastic, the applicable subheading of the insoles/footbeds will be 6406.90.3060, HTSUSA, which provides for Parts of footwear (including uppers whether or not attached to soles other than outer soles); removable insoles, heel cushions and similar articles; Other: Of other materials: Of rubber or plastics: Other.  The rate of duty is 5.3 percent ad valorem.

For the outer sole unit, you suggested a classification under subheading 6406.20.0000, HTSUSA, the provision for outer soles and heels of rubber or plastics.  Your letter states the rubber outer soles will be imported with attached polyurethane midsoles.  The imported part is considered more than an outer sole and will be classified elsewhere.

The applicable subheading for the outer sole units will be 6406.90.3030, HTSUSA, which provides for Parts of footwear (including uppers whether or not attached to soles other than outer soles);  gaiters, leggings, and similar articles, and parts thereof: Other: Of rubber or plastics: Bottoms.  The rate of duty is 5.3 percent ad valorem.

Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheadings 6406.10.6500 and 6406.90.3060, HTSUSA, unless specifically excluded, are subject to an additional 7.5 percent ad valorem rate of duty.  At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.15, (HTSUS) in addition to subheadings 6406.10.6500 and 6406.90.3060, HTSUSA, listed above.

The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading.  For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china, respectively.

Duty rates are provided for your convenience and are subject to change.  The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at https://hts.usitc.gov/current.

19 C.F.R. § 134.1(b), defines “country of origin” as the country of manufacture, production, or growth of any article of foreign origin entering the United States.  Further work or material added to an article in another country must effect a substantial transformation to render such other country the “country of origin” within the meaning of this part.  Based on the information submitted, it is of the opinion of this office that the country of origin of the unformed upper, the two insoles/footbeds, and the outer sole unit, is China.

The marking statute, section 304 Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article.  

If the imported unformed shoe upper, the two insoles/footbeds, and the outer sole units, are produced in China and further processed/manufactured in the United States into a finished shoe, it is substantially transformed in the United States pursuant to 19 C.F.R. § 134.1(b).  As such, per 19 C.F.R. §.134.35(a), the U.S. processor is considered the ultimate purchaser of the imported components.  As a result of the substantial transformation, the imported footwear parts are excepted from the marking requirements of 19 U.S.C. § 1304, per 19 C.F.R. § 134.35(a), supra.  The containers in which the unformed uppers, the two insoles/footbeds, and the outer sole units will be shipped should be clearly marked as “Made in China.”   You state the uppers will be substantially transformed into finished boots in the United States and will be characterized (marked) by labels bearing such language such as “Made in USA with Globally Sourced Components,” “Built in USA from Globally Sourced Components,” “Assembled in USA from Globally Sourced Components,” etc., along with a stylized American flag on the lateral side.  Since country of origin for marking purposes will be the United States, it will be exempted from country of origin marking requirements.  (See 19 C.F.R. § 134.46.)  Please note that if you wish to mark the shoes or the packaging containing these products to indicate that they are “Made in the USA” or similar words denoting United States origin, then the marking must comply with the requirements of the Federal Trade Commission (FTC).  We suggest that you direct any questions on this issue to the FTC.

Specifically, FTC, Division of  Enforcement, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580.  Information can also be found at the FTC website www.ftc.gov.

The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 C.F.R. 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.

This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection Regulations (19 C.F.R. 177).

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, please contact National Import Specialist Stacey Kalkines at [email protected].

Sincerely,

Steven A. Mack
Director
National Commodity Specialist Division