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NY G82045

October 2, 2000

CLA-2-64:RR:NC:TP:347 G82045


TARIFF NO.: 6401.92.90

Mr. Brian Wavra
Lacrosse Footwear, Inc.
1319 St. Andrew St.
La Crosse, WI 54603

RE: The tariff classification and status under the North American Free Trade Agreement (NAFTA), of footwear from China; Article 509

Dear Mr. Wavra:

In your letter dated September 5, 2000, you requested a ruling on the status of rubber/plastic footwear from China under the NAFTA.

You have submitted samples for two styles of what you state are boots with rubber/plastic uppers and outer soles. For example #1, you state that the outsole is made entirely in Canada; the rubber sheeting used to manufacture the outsole is produced in Canada, and it is cut-to-shape in Canada. It is then sent to China. You state the upper is manufactured entirely in China; the rubber sheeting used to manufacture the upper is produced in China. In China, the Canadian outer sole is attached to the upper. The finished boot is then sent to the U.S.

You also state that the commercial invoice from the Chinese boot manufacturer would itemize the boot cost on the commercial invoice by listing $8.50 for the upper and the labor to attach the outsole on a separate line item. The second line item would be the freight cost of $0.15 per outsole to ship to China. The third line item would list $11.00 for the cost of the outsole made in Canada. You state the total FOB cost would be $19.65.

In example #2, only the rubber sheeting is manufactured in Canada. The rubber sheeting includes the rubber, the circular protrusions on the rubber sheeting, the lettering, and the metal spike caps found on some of the rubber protrusions. The sheeting is then sent to the U.S. The value of the sheets to the U.S. is $160. The U.S. company then cuts the sheets to the shape of an outsole. The U.S. company then ships the sheets to the Chinese manufacturer. The cost to the Chinese is now $12 per sheet. It costs the U.S. company $1 to cut one outsole. Therefore, an outsole costs $6 each to the Chinese or $12 per pair. As in example #1, the Chinese manufacturer then attaches the U.S. cut-to-shape outsole to the Chinese-made upper. The Chinese commercial invoice would itemize each boot by listing the cost of the upper and the labor to attach the outsole in China as $8.50. The second line item would list the U.S. to China freight cost for a pair of the U.S. cut-to-shape outsoles at $0.15. The third line item would be the U.S. cut-to-shape outsole of $12. The total cost of the boot is $20.65.

You ask what the HTS classification and value would be for the two boots, and whether the shoes are eligible for NAFTA.

In determining the country of origin for the boots, we used the rules of origin as described in 19 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 19 CFR 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.” The country of origin rules set out in 19 CFR 102.20 for chapter 64, HTS, 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.

The Canadian outer soles (of heading 6406) are made into finished footwear (of heading 6401) in China, where they are joined to the Chinese-made uppers (of heading 6406). In example #2, the U.S. cut-to-shape outer soles (of heading 6406) are made into finished footwear (of heading 6401) in China, where they are joined to the Chinese-made uppers (of heading 6406). Therefore, the country of origin of the boots in example #1 and example #2 will be China.

The merchandise does not qualify for preferential treatment under the NAFTA because the boots will not be wholly obtained or produced entirely, or transformed, in the territory of a NAFTA country as required by General Note 12(b), HTSUSA.

The applicable tariff provision for the boots of example #1 and #2 will be 6401.91.90, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), which provides for waterproof footwear with soles and uppers of rubber and/or plastics, the uppers of which are neither fixed to the sole nor assembled by stitching, riveting, nailing, screwing, plugging or similar processes, which does not have a protective metal toe-cap, footwear covering the ankle but not covering the knee, in which materials other than PVC are used in the construction of the footwear. The general rate of duty will be 37.5% ad valorem.

In regards to the value of the merchandise, the “transaction value” is the price actually paid or payable for the merchandise when sold for export to the U.S. Additions (such as packing costs, selling commissions, assists, royalty and license fees, and proceeds) and deductions (such as international freight and insurance of the merchandise from the country of exportation to the place of importation in the United States, U.S. freight, etc.) can be made to the “price actually paid or payable” to arrive at the dutiable value of the boots. See 19 CFR 152.103.

This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 C.F.R. 181).

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.

Should you wish to request an administrative review of this ruling, submit a copy of this ruling and all relevant facts and arguments within 30 days of the date of this letter, to the Director, Commercial Rulings Division, Headquarters, U.S. Customs Service, 1300 Pennsylvania Ave. N.W., Washington, D.C. 20229.


Robert B. Swierupski

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