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NY K89370





September 17, 2004

CLA-2-64:RR:NC:TA:347 K89370

CATEGORY: CLASSIFICATION

TARIFF NO.: 6404.19.20

Ms. Sandra Tovar
CST, Inc.
120 C Commerce Circle
Fayetteville, GA 30214

RE: Eligibility of footwear for preferential tariff treatment under CBTPA

Dear Ms. Tovar:

In your letter dated on August 27, 2004 on behalf of Margarita Trading, you requested a ruling on the classification and eligibility for preferential tariff treatment under the Caribbean Basin Trade Partnership Act (CBTPA) for footwear to be imported under five possible “scenarios.” You state that you have previously received a tariff classification ruling from this office for a snow boot. NY J87869 dated August 22, 2003 classified the snow boot under subheading 6404.19.20 Harmonized Tariff Schedule of the United States (HTS). Since you have not provided a representative footwear sample with this ruling request, we assume that these “scenarios” concern the importation of the same snow boot.

The CBTPA, amended section 213(b) of the Caribbean Basin Economic Recovery Act (CBERA, 19 U.S.C. 2701-2707) to authorize the President to extend additional trade benefits by providing special preferential tariff treatment (equivalent to the treatment accorded under NAFTA) to certain non-textile articles that are otherwise excluded from duty-free treatment under the CBERA, including;

Footwear not designated on August 5, 1983, as eligible articles for the purpose of the Generalized System of Preferences (GSP).

GN 12(t) 64, (HTS), provides for NAFTA eligibility for goods that undergo:

1. A change to headings 6401 through 6405 from any heading outside that group, except from subheading 6406.10, provided there is a regional value content of not less than 55 percent under the net cost method.

2. A change to subheading 6406.10 from any subheading, except from heading 6401 through 6405, provided there is a regional value content of not less than 55 percent under the net cost method.

3. A change to subheading 6406.20 through 6406.99 from any other chapter.

CBTPA applies to certain footwear importations and allows foreign components to be incorporated in the CBI beneficiary country provided that the NAFTA rules are applied and the RVC is met. Special Program Indicator “R” appears in the “Special” rate of duty column for applicable subheadings.

You present the scenarios as follows:

Scenario #1

The nylon used to produce the upper, the back toe material, Velcro, metal ring, shaft, polyester string, plastic knot support and tricot lining are all imported from China to the Dominican Republic. The nylon fabric will be cut and sewn in the Dominican Republic to produce the upper.

The sole will be produced in the Dominican Republic from USA pellets melted and used in an injection-molding machine. The soles are attached to the uppers by sewing. Adhesive is applied to finish the process.

We agree with your opinion that this scenario qualifies for preferential tariff treatment under CBTPA providing GN 12(t) 64, (HTS); NAFTA rules of origin are met.

Scenario #2

The formed upper will be purchased in China and imported into the United States. Duties and taxes will be paid. The rubber sole will be made in the United States with US materials. The upper and sole would be assembled in the United States along with the finishing operations.

You feel that this scenario would be a USA product capable of being marked “Made in the USA.” Although the country of origin of the finished shoe will be the United States under the Customs statutes, the FTC has the primary responsibility under statutes, which require the identification of certain foreign components if a "Made in USA" claim is made. If you intend to mark the finished shoes "Made in USA", questions concerning what would be acceptable marking must be decided by the Federal Trade Commission (FTC), Division of Enforcement. You must submit a copy of your inquiry to the FTC with their reply, if any, to the responsible Customs officer at the port of entry prior to the release of any shipment(s) marked "Made in USA".

Scenario #3

The nylon used to produce the upper, the back toe material, Velcro, metal ring, shaft, polyester string, plastic knot support and tricot lining are all imported from China to the Dominican Republic. The nylon fabric will be cut and sewn in the Dominican Republic to produce the upper.

The rubber bottom sole would be made in the US with US materials shipped to the Dominican Republic.

This scenario is similar to Scenario #1 except the sole would be produced in the US rather than the Dominican Republic.

We agree with your opinion that this scenario qualifies for preferential tariff treatment under CBTPA providing GN 12(t) 64, (HTS); NAFTA rules of origin are met.

Scenario #4

The nylon used to produce the upper, the back toe material, Velcro, metal ring, shaft, polyester string, plastic knot support and tricot lining are all imported from China to the United States paying duty and taxes owed.

The rubber formed bottom would be purchased from Canada and shipped to the United States. The rubber bottom and the raw materials from China would be shipped to the Dominican Republic for completion of the footwear. This includes cutting the nylon fabric to form the uppers and assembling the fasteners and linings and attaching the sole.

We agree with your opinion that this scenario qualifies for preferential tariff treatment under CBTPA providing GN 12(t) 64, (HTS); NAFTA rules of origin are met.

Scenario #5

The formed upper would be made in China and shipped directly to the Dominican Republic. The sole will be produced in the Dominican Republic from USA pellets melted and used in an injection-molding machine. All other processes to finish the boot would be performed in the Dominican Republic.

This scenario will not qualify for preferential tariff treatment under CBTPA. The formed upper from China is classified under subheading 6406.10 (HTS), therefore, a change to headings 6401 through 6405 from any heading outside that group, except from subheading 6406.10, necessary for preferential tariff treatment under CBTPA providing GN 12(t) 64, (HTS), NAFTA rules of origin has not been met.

This ruling is being issued under the provisions of Part 177 of the Customs 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, contact National Import Specialist Richard Foley at 646-733-3042.

Sincerely,

Robert B. Swierupski
Director,

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