CLA-2-64:OT:RR:NC:N2:247
Ms. Tina Fang
Steve Madden, Ltd.
52-16 Barnett Avenue
Long Island City, NY 11104
RE: The tariff classification and country of origin of finished footwear from China and India
Dear Ms. Fang:
In your letter dated July 9, 2024, and August 26, 2024, you requested a tariff classification ruling. You have submitted descriptive literature, photos, and a sample of a formed upper and a finished shoe which you indicate represents the finished product resulting from two proposed manufacturing scenarios.
Style # 912979A is a below-the-ankle athletic shoe having a rubber/plastics upper, a secure lace closure, and a rubber/plastics outer sole. The rubber/plastics outer sole has a microns thin application of leather flocking. The leather flocking has no bearing upon the classification and is disregarded. The value of the completed imported footwear for both scenarios is $11.80 per pair F.O.B.
The applicable subheading for the athletic footwear identified as # 912979A will be 6402.99.8005, Harmonized Tariff Schedule of the United States Annotated, (HTSUSA), which provides for Other footwear with outer soles and uppers of rubber or plastics: Other footwear: Other: Other: Other: Other: Valued over $6.50 but not over $12/pair: Tennis shoes, basketball shoes, gym shoes, training shoes and the like. The rate of duty is 90 cents/pair + 20 percent ad valorem.
Additionally, you are requesting the country of origin of the completed shoe resulting from two separate manufacturing scenarios. In the first scenario, the shoe is assembled in India from a formed upper made in China, and an outer sole made in China. In the second scenario, the shoe is assembled in India from a formed upper made in China, and an outer sole made in India.
The upper consists of Polyurethane (PU), has athletic styling, a lining, a closed bottom, a lace closure, and has the shape of a foot. The formed upper is manufactured in China and shipped to India. In the first scenario, the formed upper and the outer sole will be made in China. The upper will be assembled to the outer sole in India before being imported into the United States. In the second scenario, you state that the formed upper will be made in China and then shipped to India where it will be attached to an outer sole made in India.
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). Part 134 of the U.S. Customs and Border Protection (“CBP”) Regulations (19 CFR 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b), CBP Regulations (19 CFR 134.1(b)), defines “country of origin” as “the country of manufacture, production, or growth of any article of foreign origin entering the United States. Further work or material added to an article in another country must effect a substantial transformation in order to render such other country the country of origin within the meaning of [the marking laws and regulations].”
A substantial transformation occurs when, as a result of manufacturing process, a new and different article emerges, having a distinct name, character, or use, which is different from that originally possessed by the article or material before being subjected to the manufacturing process. See United States v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940).
If the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. See Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983) (Uniroyal). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, dated January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987). In the Uniroyal case, the court held that an upper was not substantially transformed when attached to an outsole to form a shoe and that the upper was "the very essence of the completed shoe."
The attachment of the Chinese-origin outer sole to the Chinese-origin upper, and the attachment of the Indian-origin outer sole to the Chinese-origin upper is considered minor assembly. As such, the country of origin for marking purposes is where the product acquires the “essence” of a completed shoe. In both scenarios, the Chinese-origin upper forms the essence of the completed shoe. As a result, the country of origin for the finished footwear in both proposed manufacturing scenarios is China for marking purposes and for purposes of applying Section 301 trade remedies.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 6402.99.8005, HTSUSA, unless specifically excluded, are subject to an additional 7.5 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.15, in addition to subheading 6402.99.8005, HTSUSA, listed above.
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 at https://hts.usitc.gov/.
The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP.
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection 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, please contact National Import Specialist Stacey Kalkines at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division