CLA-2 RR:TC:TE 958966 ASM
Tariff No.: 6406.10.1000
Mr. Russel Binning
Pioneer Shoe Corporation
10788 Monte Vista Ave.
Ontario, CA 91762
RE: Tariff classification of leather shoe upper for work boot; Marking
of finished work boot.
Dear Mr. Binning:
This letter concerns the request for a binding ruling regarding the tariff classification of a leather shoe upper for a work boot (style #PSC-01) under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA). In addition, you request guidance as to the proper marking of the finished product after it has received further processing in the United States.
FACTS:
It is our understanding that the subject article, a leather shoe upper, has been manufactured in China as follows: the leather upper is fully cement lasted to a cardboard insole with a 1/4 inch thick full plastic-rubber midsole and a ½ inch thick partial heel. The PVC mid-sole filler has a 1- 1/4 inch in diameter round hole cut in the bottom. You indicate that once these uppers are imported into the United States, additional materials and processing are required to close the bottom. Specifically, a twelve step injection carousel molds a thermal plastic outsole to the upper. You further indicate that this process requires a four man team of specially trained technicians and accounts for about 65% of the cost of the finished goods.
ISSUE:
1. What is the proper tariff classification under the HTSUSA for the product identified as a leather workboot upper?
2. What is the proper marking for the finished product, identified as a work boot (style # PSC-01)?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUSA, is made in accordance with the General Rules of Interpretation (GRI’s) and in accordance with the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRI’s may then be applied.
If the upper is "unformed," classification would be under subheading 6406.10.6500, HTSUSA, which provides for parts of footwear, other, of leather. If the upper is "formed," it is classifiable under subheading 6406.10.1000, HTSUSA, which provides for parts of footwear with formed leather uppers. .
Additional U.S. Note 4 to Chapter 64, HTSUSA, provides:
4. Provisions of subheading 6406.10 for "formed uppers" cover uppers,
with closed bottoms, which have been shaped by lasting, molding or
otherwise but not by simply closing at the bottom.
It is your contention that the presence of a 1- 1/4 inch diameter round hole cut in the bottom would prevent this product from being classified as a "formed upper" within the meaning of Additional U.S. Note 4 to Chapter 64, HTSUSA, because it has a substantial opening cut out of the bottom.
In Headquarters Ruling Letter (HQ) 958056, dated August 28, 1995, we stated that in general, "formed uppers" include all items which have a layer of material between most of the foot and the ground, and which after lacing or buckling, if needed, will stay on the foot if worn in the condition as imported and which are shaped to fit the human foot. The sample submitted to us in this case is an upper which has been completely shaped by lasting, molding, or otherwise to fit the human foot. Further, this upper would stay on the foot and provide ample protection to the wearer once laced.
You reference HQ 085573, dated December 28, 1989, in support of your contention that the subject boot upper has a "substantial opening" and should be considered an "unformed" upper. However, HQ 085573 can be distinguished from the present case because the uppers in that ruling had only received front-part lasting and there was no back-part lasting. In fact, HQ 085573 specifically noted that based on HQ 082075 (December 1, 1988), certain footwear uppers which were not back-part lasted and needed to be soaked, relasted and dried after importation to obtain the final shape, would not be considered formed uppers for tariff purposes. Thus, the basis for determining that the articles would be classified as unformed uppers under subheading 6406.10.6500, HTSUSA, was twofold; i.e., the sample uppers did not have closed bottoms and were not back-part lasted.
In the subject case, the leather upper has been both front and back-part lasted, and has a closed bottom sole that has been fully cement lasted to a cardboard insole. Although a 1- 1/4 inch diameter round hole has been cut out of the sole, this upper has received substantially more shaping and finishing than the footwear upper described in HQ 085573 which had neither a closed bottom sole nor back lasting.
In HQ 958056, issued August 28, 1995, it was determined that a woven black leather upper was a "formed" upper for tariff purposes. In this ruling, Customs stated that although a "nickel sized" hole had been popped out of the leather underfoot and the cardboard insole, the presence of a cardboard insole had permanently shaped this footwear upper. Thus, the upper was considered "formed" even though it did not have a "closed bottom." Such is the case with the subject boot upper which has a cardboard and rubber insole that permanently shapes the upper. Accordingly, we consider the upper to be "formed" even though the upper does not have a completely "closed bottom."
It is our understanding that all the manufacturing of this shoe will take place in China, prior to importation into the United States. Once in the U.S., a thermal plastic outsole is molded onto the shoe upper. We do not believe that this process is significant enough to have substantially transformed the good. Thus, the uppers are not excepted from marking and each upper must be marked "Made in China" at the time of importation into the U.S.
You note in your request that you would like to mark the shoes as follows: "Assembled in the U.S.A. with imported components." However, questions regarding the acceptability of such a marking on the finished shoe must be decided by the Federal Trade Commission (FTC), Division of Enforcement. The FTC has primary responsibility under statutes when a "Made in USA" claim can be made.
HOLDING:
The subject leather workboot upper (style # PSC-01), is classifiable under the subheading 6406.10.1000, HTSUSA, the provision for "Parts of footwear (including uppers whether or not attached to soles other than outer soles); removable insoles, heel cushions and similar articles; gaiters, leggings and similar articles, and parts thereof: Uppers and parts thereof, other than stiffeners: Formed uppers: Of leather or composition leather: For other persons" and is dutiable at 10% ad valorem.
Regarding the marking of the finished product, it is our determination that the additional processing in the United States does not substantially transform the product. Thus, each individual boot upper must be clearly marked "Made in China" on the tongue area of the boot and not on the midsole as in the sample. The marking must appear in an area where it will not be obscured by the attachment/molding of the outersole which will take place in the United States. The FTC has jurisdiction over "Made in the USA" claims and must decide whether or not such a marking is appropriate on the finished shoe. However, the "Made in China" marking must appear in close proximity to any claims regarding manufacture of the shoe in the United States.
Sincerely,
John Durant, Director
Tariff Classification
Appeals Division