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HQ 085178

October 20, 1989

CLA-2 CO:R:C:G 085178 DFC


TARIFF NO.: 6406.10.8040; 6406.10.6000

Mr. P.F. Wegener
M.G. Maher & Company, Inc.
442 Canal Street
New Orleans, La. 70130

RE: Footwear parts manufactured in Korea

Dear Mr. Wegener:

Your letter dated June 22, 1989, addressed to our New Orleans office on behalf of NASCO-American Shoe Company Inc., concerning the tariff classification of certain footwear parts, has been referred to this office for a direct reply to you. Samples of the parts involved were submitted for examination.


The sample designated as NASCO N-702-4 can be easily separated into three components, i.e., a partial boot shaft made of PU plastic (backed with a woven textile), the braided shoelace going around the top of the shaft (most of it hidden between the exterior and interior layers of the shaft and emerging only from two eyelets near the front), and a liner with three laminated layers, i.e., nylon tricot, nylex (the flannel-like pink fabric), and rubber or plastic foam (between the two layers of fabric).


Should these components be considered a set for tariff purposes?

If not considered a set, can the components be considered "composite goods?"


It is to be noted that if each of these three components were imported separately, they would be classified differently. The shaft under subheading 6406.10.60, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), as parts of footwear, uppers and parts thereof, other, of rubber or plastics; the liner under subheading 6406.10.8040 HTSUSA, as parts of footwear, uppers and parts thereof, other, other, of textile materials other than cotton, of man made fibers; and the shoelace under subheading 6307.9050, HTSUSA, as footwear lacings.

In applying the HTSUSA, the Customs Service must follow the terms of the statute. Classification of goods under the HTSUSA 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 taken in order]." In other words, classification is governed first by the terms of the headings of the tariff and any relative section or chapter notes.

GRI 2(b), HTSUSA, provides in part that "[t]he classification of goods consisting of more than one material or substance shall be according to the principles of Rule 3."

GRI 3, HTSUSA, is relevant here in determining whether the components can be considered a set or composite goods. It reads in pertinent part as follows:

3. When by application of Rule 2(b) or for any other reason, goods are prima facie classifiable under two or more headings, classification shall be effected as follows:

(a) The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods. . . those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods.

(b) Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.

GRI 3(b), HTSUSA is relevant here because GRI 3(a), HTSUSA, cannot be used in determining classification. The Explanatory Notes for GRI 3, HTSUSA, state that the term "goods put up in sets for retail sale" means goods that:

(a) consist of at least two different articles prima facie classifiable in different headings (or, by GRI 6, subheadings);

(b) consist of products or articles put together to meet a particular need or carry out a specific activity; and

(c) are put up in a manner suitable for sale directly to users without repacking (e.g., in boxes or cases or on boards).

The components do not qualify as "goods put up in sets for retail sale" because they are not put up in a manner suitable for sale directly to users without repacking. Specifically, in their condition as imported the components must be sold to a footwear maker because they are useless to the wearer until a rubber foot portion is added.

Explanatory Note IX to GRI 3(b), HTSUSA, reads in pertinent part as follows:

(IX For the purposes of this Rule, composite goods made up of different components shall be taken to mean not only those in which the components are attached to each other to form a practically inseparable whole but also those with separable components, provided these components are adapted one to the other and are mutually complementary and that together they form a whole which would not normally be offered for sale in separate parts.

It is our view that the components do not qualify as "composite goods" because it is doubtful that the shaft, shoelace, and liner "form a whole which would not normally be offered for sale in separate parts."

Liners for "moon boots" are often imported separately and many similar boot liners are sold separately to consumers as replacements for liners that have worn out and it is very easy to place a liner inside a shaft of the appropriate size. For these reasons the liner should be classified separately.

With respect to the shoelace, it is true that many shoelaces are bought in the United States or imported separately by shoe manufacturers and many others are bought by consumers as replacements. However, it is our observation that this is true generally only to laces used in oxfords and other shoes and boots which have the shoelaces crisscrossing through flat eyelet stays. Those laces are usually flatter than the ones here, and it is certainly far easier for the consumer to replace a broken lace or a maker to insert a lace in those shoes than it would be in this item. It would take at least several minutes of patient toil to worm a lace through the twelve inch long passage around the topline of the boot because there is no way to maintain a grip on the lace to pull it through. Therefore, although we consider shoelaces crisscrossed laced into oxford uppers to be separately classifiable, it is our position that the PU shaft and the fabric lace constitute a "composite good." It is evident that the essential character of this "composite good" is derived from the far larger, more prominent, and necessary shaft, not from the textile lace.

It should be noted that Legal Note 2 to Chapter 64, HTSUSA, provides that "[t]he expression 'parts' does not include . . . laces . . . ." However, we interpret this exclusion as clearly limited to laces (and the other items listed, e.g., eyelets) when imported separately.

Section 134.1(b), Customs Regulations (19 CFR 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 in order to render such other country the "country of origin" within the meaning of marking laws and regulations. The case of U.S v. Gibson-Thompsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940), stands
for the principle that an article used in manufacture which results in an article having a name, character or use differing from that of the constituent article will be substantially transformed.

The components are not marked to indicate the country of origin. However, it is our opinion that they will be substantially transformed so that marking of the cartons will be sufficient assuming the importer or record establishes to the port of entry that the "manufacturer or producer" will receive them in those cartons.


The liner is separately classifiable under subheading 6406.10.8040, HTSUSA, with duty at the rate of 9 percent ad valorem. The applicable textile category is 669.

The shaft including the lace is classifiable under subheading 6406.10.6000, HTSUSA, with duty at the rate of 5.3 percent ad valorem.

Due to the changeable nature of the statistical annotation (the ninth and tenth digits of the classification) and the restraint (quota/visa) categories, you should contact your local Customs office prior to importation of this merchandise to determine the current status of any import restraints or requirements.

The designated textile and apparel category may be subdivided into parts. If so, visa and quota requirements applicable to the subject merchandise may be affected. Since part categories are the result of international bilateral agreements which are subject to frequent renegotiations and changes, to obtain the most current information available, we suggest that you check, close to the time of shipment, the Status Report On Current Import Quotas (Restraint Levels), an issuance of the U.S. Customs Service, which is updated weekly and is available at your local Customs office.


John Durant, Director

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