CLA-2-64:OT:RR:NC:N2:247
Mr. David P. Dixon
Rocky Brands, Inc.
39 East Canal Street
Nelsonville, Ohio 45764
RE: RE: The tariff classification, country of origin and marking of formed uppers manufactured in the Dominican Republic, and the eligibility for preferential treatment under the Dominican Republic – Central America – United States Free Trade Agreement (DR-CAFTA)
Dear Mr. Dixon:
In your letters dated December 3, 2021, and December 22, 2021, you requested a tariff classification and marking ruling, and inquired about the product’s eligibility for preferential duty treatment as part of a trade agreement. Detailed literature describing the manufacturing process, the countries of origin of the component materials, and photographs of a formed upper were included with your submissions. No samples were submitted.
The photographs of style # GB00532 show a man’s, closed toe/closed heel, above the ankle, below the knee, boot upper. The boot’s upper consists of sewn together leather pieces that includes a small textile American flag stitched into a horizontal seam on the lateral side. It features metal eyelets over the forefoot and metal hooks on the shaft that facilitate a lace closure. It has a three-layer bootie liner that has been seam-sealed using heat and waterproof tape. The upper has a work boot appearance, is designed for casual use, and will be available in 6” and 8” heights.
Various materials from originating and non-originating countries are manufactured into a formed upper in the Dominican Republic (DR). Leather is imported from the United States to the DR where it is tanned, cut to shape, and sewn together using thread from the US. Waterproof lining material is shipped from China to the DR where it is cut from rolls into pieces, then stitched together to form a bootie liner. Reinforcers from Italy are attached to the upper using latex adhesives from the US and Brazil. A toe box and a counter from Great Britain, and eyelets/hooks from South Korea are added. The upper is lasted and formed using heat and stapled to an insole board. The upper takes the shape of the foot in the DR. The formed upper is considered to have the very essence of completed footwear (Uniroyal Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026 (1982), aff'd, 702 F.2d 1022 (Fed Cir. 1983)). You state the upper maintains an 81 percent regional value content (rvc). The formed upper is shipped to Puerto Rico (PR) where the outer sole is attached to the upper creating a complete boot. In PR the outer sole is attached, trimmed, and polished, the footbed is inserted, the shoelace and hang tags are attached, and the finished product is boxed. The attachment of the outer sole to the formed upper is assembly and not considered substantial transformation.
The applicable subheading for the formed upper, style # GB00532, imported into Puerto Rico will be 6406.10.0500, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Parts of footwear (including uppers whether or not attached to soles other than outer soles); Uppers and parts thereof, other than stiffeners: Formed uppers: Of leather or composition leather: For men, youths, and boys. The duty rate is 8.5 percent ad valorem.
General Note 29, HTSUS, sets forth the criteria for determining whether a good is originating under the DR-CAFTA. General Note 29(b), HTSUS, (19 U.S.C. § 1202) states, in pertinent part, that For the purposes of this note, subject to the provisions of subdivisions (c), (d), (m) and (n) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good under the terms of this note if— (i) the good is a good wholly obtained or produced entirely in the territory of one or more of the parties to the Agreement; (ii) the good was produced entirely in the territory of one or more of the parties to the Agreement, and— (A) each of the non-originating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (n) of this note; … The raw materials are manufactured into a formed upper in the Dominican Republic from originating and non-originating components, sourced from the USA, China, Italy, Great Britain, and South Korea. The non-originating materials must undergo an applicable change in tariff classification to meet the requirements of GN 29(b)(ii)(A). General Note 29 (n), Chapter 64, Chapter rule 1 states: Notwithstanding the tariff classification rules for goods of chapter 64 set forth below, with respect to goods of chapter 64 falling in the following tariff provisions enumerated in this rule for which a rate of duty followed by the symbol “P” in parentheses appears in the “Special” sub column rate of duty column 1, an importer may claim preferential tariff treatment under this note for a good of chapter 64 that meets any tariff classification rule for such good set forth in general note 12, 17, 25, 26 or 28 of the tariff schedule: tariff items 6401.92.30, 6401.92.60, 6401.99.80, 6402.12.00 through 6402.30.30 inclusive, 6402.30.60, 6402.30.90, 6402.91.40, 6402.91.60, 6402.91.70, 6402.99.05 through 6402.99.18, inclusive, and 6402.99.30 through 6402.99.79, inclusive; heading 6403; tariff items 6404.11.20 through 6404.19.15, inclusive, and 6404.19.25 through 6404.20.60, inclusive; and headings 6405 and 6406. 1. A change to subheading 6401.10, or tariff items 6401.92.90, 6401.99.10, 6401.99.30, 6401.99.60, 6401.99.90, 6402.91.10, 6402.91.20, 6402.91.26, 6402.91.50, 6402.91.70, 6402.91.80, 6402.91.90, 6402.99.08, 6402.99.16, 6402.99.19, 6402.99.33, 6402.99.80, 6402.99.90, 6404.11.90 or 6404.19.20 from any other heading outside headings 6401 through 6405, except from subheading 6406.10, provided that there is a regional value content of not less than 55 percent under the build-up method. 2. A change to any other tariff item of chapter 64 from any other subheading. The formed uppers, style # GB00532, classified in 6406.10.0500, HTSUS, qualify for U.S./DR-CAFTA preferential treatment because they meet the requirements of HTSUS General Note 29(b)(ii)(A) and 29(n) Chapter 64, Chapter Rule 2. Rule 2 states the classification of non-originating materials must “change to any other tariff item of Chapter 64 from any other subheading.” Under Rule 2 of GN 29 (n) the non-originating component parts, if imported separately, undergo a tariff change to any other tariff item of chapter 64 from any other subheading. The upper is said to have an 81 percent RVC. Based on the facts provided, the men’s formed uppers, style # GB00532, qualify for DR-CAFTA preferential treatment because they meet the requirements of HTSUS General Note 29(b)(ii)(A) and 29(n) Chapter 64, Chapter Rule 2.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at https://hts.usitc.gov/current.
Please note that modifications to the Harmonized Tariff Schedule of the United States (HTSUS) [to align the HTSUS on the 2022 version of the Harmonized Commodity Description and Coding System] pursuant to Section 1206 of the Omnibus Trade and Competitiveness Act of 1988 are forthcoming. These modifications, made by Presidential Proclamation 10326 and set forth in Annexes I, II.A, and II.B of U.S. International Trade Commission Publication 5240, will be effective on January 27, 2022. To the extent that the modifications to the HTSUS impact the classification of the merchandise subject to this ruling, you may submit a new ruling request at that time.
You also inquired about the country of origin marking of style # GB00532. The Dominican Republic is the acceptable country of origin.
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States, the English name of the country of origin of the article. Congressional intent in enacting 19 U.S.C. § 1304 was “that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” See United States v. Friedlander & Co., 27 C.C.P.A. 297, 302 (1940).
As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country-of-origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain.
The country of origin marking on the hang tag should be large enough and in such a location that it can be noticed from a casual inspection of the footwear. Adding a hang tag to indicate the country of origin should inform the ultimate purchaser of the country of origin of the shoes and clarify any confusion as to the origin of the footwear.
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 Stacey Kalkines at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division