United States International Trade Commision Rulings And Harmonized Tariff Schedule
faqs.org  Rulings By Number  Rulings By Category  Tariff Numbers
faqs.org > Rulings and Tariffs Home > Rulings By Number > 1997 NY Rulings > NY B87776 - NY B87855 > NY B87831

Previous Ruling Next Ruling
NY B87831




August 14, 1997

CLA-2-98:RR:NC:347 B87831

CATEGORY: COUNTRY OF ORIGIN

TARIFF NO.: 9802.00.80.40

Mr. Jim Mallock
Mallock Leather Company, Inc.
782 Northfield Avenue
West Orange, NJ 07052

RE: "Product of the United States" for preferential tariff treatment under "CBI II".

Dear Mr. Mallock:

In your letter dated July 21, 1997, you requested a ruling regarding whether midsoles made in the United States from Mexican leather qualify as "products of the United States" for purposes of receiving preferential tariff treatment under the Caribbean Basin Initiative, as amended (CBI II).

You state that Jet Counter Co. of St. Louis, MO purchases leather from your principal in Mexico, Suelas WYNY. The leather is imported into the United States duty free under NAFTA origin rules Harmonized Tariff of the United States (HTS)4104.29, and sold FOB Laredo, TX to Jet Counter Co. Jet Counter ships the leather to St. Louis and transforms the sole leather into midsoles (HTS) 6406.99 at their factory and then ships the midsoles to the Dominican Republic where they are assembled, along with other footwear components into finished footwear. The finished footwear will then be exported to the United States. You specifically ask if the process of manufacturing midsoles in the United States from Mexican leather qualifies them for preferential duty treatment under CBI II as "a product of the United States"

You explain that the process performed in the United States which changes the leather into midsoles suitable for use as a shoe component consists of five major operations. You describe these operations as follows:

1. Cutting. This is the process in which the sheet stock is cut into the sole pattern itself. This cut sole is specific to the size of the shoe being made.

2. Degraining. This is the process in which the grain is removed from the cut sole and it is done with a rotating knife. This procedure further changes the appearance and touch from the original full grain to one of no grain.

3. Buffing. This process is like a fine sanding which makes the degrained surface more uniform and provides a new surface for adhesion. The buffing process also takes place on the opposite (flesh) side of the leather in order to create an additional surface for adhesion.

4. Leveling. This operation cuts the leather (prior to flesh buffing) throughout it's length so that it becomes a uniform thickness in it's entirety. The original leather sheet varies in thickness.

5. Flexing. The flexing operation actually bends the leather and breaks up the fibers so that the temper changes from firm to soft. The midsoles will qualify as "Products of the United States" since they satisfy the General Rules of Origin described in 19 C.F.R. 102.11(a)(3) which states that:

(a) The country of origin of a good is the country in which:

(3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in 19 C.F.R. 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.

The Mexican leather undergoes an applicable change in tariff classification set out in 19 C.F.R. 102.20(k) in that a change to subheading 6406.20 through 6406.99 from any other chapter occurs when the midsoles are formed. As you state, the requisite change in tariff classification occurs and the midsoles will be deemed of U.S. origin.

For purposes of receiving preferential tariff treatment under the Caribbean Basin Initiative, (HTS), Chapter 98, Subchapter II, U.S. Note 2(b) states that no article (except a textile article, apparel article, or petroleum, or any product derived from petroleum, provided for in heading 2709 or 2710) may be treated as a foreign article, or as subject to duty, if--

(i) the article is--

(A) assembled or processed in whole of fabricated components that are a product of the United States, or

(B) processed in whole of ingredients (other than water) that are a product of the United States, in a beneficiary country, and

(II) neither the fabricated components, materials or ingredients, after exportation from the United States, nor the article itself, before importation into the United States, enters the commerce of any foreign country other than a beneficiary country.

Customs has previously determined that footwear is not an article of apparel.

19 C.F.R. 10.12(e) defines "Product of the United States" as an article manufactured within the Customs territory of the U.S. and may consist wholly of U.S. components or materials, of U.S. and foreign components or materials. If the article consists wholly of or partially of foreign components or materials, the manufacturing process must be such that the foreign components or materials have been substantially transformed into a new and different article, or have been merged into a new and different article.

In this regard the finished footwear to be imported into the United States from a beneficiary country made with the midsoles described above will satisfy the requirement of (HTS), Chapter 98, Subchapter II, U.S. Note 2 (b)(i)(A). Providing that the requirements of (HTS), Chapter 98, Subchapter II, U.S. Note 2(b)(ii), are satisfied, the imported footwear will be eligible for preferential tariff treatment under the Caribbean Basin Initiative, as amended ("CBI II").

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

A copy of this ruling letter 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 this ruling, contact National Import Specialist, Richard Foley at (212) 466-5890.

Sincerely,

Paul K. Schwartz Chief, Textiles & Apparel Branch National Commodity Specialist Division

Previous Ruling Next Ruling

See also: