CLA-2 CO:R:C:M 952886 DFC
John B. Pellegrini, Esq.
Ross & Hardies
Park Avenue Towers
65 East 55th Street
New York, New York 10022-3219
RE: Country of origin of footwear manufactured in Korea using
uppers sewn in the People's Republic of China
Dear Mr. Pellegrini:
In a letter dated September 30, 1992, addressed to the Area
Director of Customs in New York, N.Y., you inquired as to the
country of origin of certain footwear to be produced in Korea for
the Timberland Company using uppers manufactured in the Peoples
Republic of China (PRC). Your letter has been referred to this
office for a direct reply. A sample of the upper along with the
completed shoe was submitted for examination.
FACTS:
The sample designated as style no. 92055 is a man's over-
the-ankle, lace-up shoe with a leather upper, EVA midsole, rubber
outsole, a lining of non-woven man-made fiber and an elasticized
gusset.
The sample upper which was sewn in the PRC is completely
open at the bottom and has not been lasted.
You state that uppers represented by the sample will be
exported to Korea where they will be combined with bottoms of
Korean origin to produce complete footwear which will be exported
into the U.S.
ISSUE:
What is the country of origin of the completed footwear?
-2-
LAW AND ANALYSIS:
It is your position that because the uppers are completely
open and have no shape, they are not complete footwear nor do
they have the appearance of footwear. Thus, assembly of the
uppers sewn in the PRC with bottoms of Korean origin constitutes
a "substantial transformation" of these footwear parts into
finished footwear which is the product of Korea. In order for a
substantial transformation to be found, an article having a new
name, character, and use must emerge from the processing. See
United States v. Gibson-Thomsen v. United States, 27 CCPA 267,
C.A.D. 98 (1940).
In the case of Uniroyal Inc. v. United States, 3 CIT 220,
542 F. Supp.1026 (1982), aff'd, 702 F.2d 1022 (Fed Cir. 1983),
decided under the Tariff Schedules of the United States (TSUS),
the Court of International Trade examined whether the addition of
an outsole in the United States to imported uppers lasted in
Indonesia changed the fundamental character of the imported
article. After carefully examining both the imported upper and
the finished shoe, the court concluded that the imported upper
did not lose its distinct identity in the finished shoe, and to
the contrary was the very essence of the completed shoe. This
was so even though the imported upper could not be sold at retail
without the rubber outsole being attached, and even though
following attachment of the rubber outsole the shoe was called by
a different name, a deck shoe, rather than an upper or a
moccasin.
Under the HTSUS, the Uniroyal upper lacking an outsole would
not be considered as having the essential character of footwear
described in headings 6401 through 6405, HTSUS, since
classification as footwear under those headings requires the
presence of both soles and uppers. For example. in Headquarters
Ruling Letter 732769 dated February 9, 1990, Customs took the
position that two styles of baby shoe uppers with open bottoms
exported from the Dominican Republic to the U.S. were not
substantially complete shoes until the soles were attached in the
U.S. At that time the uppers were substantially transformed in
the U.S. into baby shoes, an article with a new name and
characteristics from the imported unformed uppers.
-3-
In this instance the combining of the unformed uppers with
the unattached bottoms in Korea constitutes a "substantial
transformation" resulting in a new and different article having a
new name and use i.e., uppers to footwear.
HOLDING:
The country of origin of style no. 92055 is Korea.
Sincerely,
John Durant, Director
Commercial Rulings Division
6cc AD NY Seaport
1cc Eric Francke NY Seaport
1cc John Durant