HQ 0556205 - Applicability of duty exemption under U.S. Note 2(b), subchapter II, Chapter 98, HTSUSA, to industrial waterproof footwear; boots; 555742; 555794 - United States International Trade Commision Rulings

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HQ 556205

September 19, 1991

CLA-2 CO:R:C:S 556205 WAW

CATEGORY: CLASSIFICATION

Mr. Anthony T. Docal
Docal Associates, Inc.
Woodbridge Professional Center South
264 Amity Road, Suite 208
Woodbridge, CT 06525

RE: Applicability of duty exemption under U.S. Note 2(b), subchapter II, Chapter 98, HTSUSA, to industrial waterproof footwear; boots; 555742; 555794

Dear Mr. Docal:

This is in response to your inquiry of August 16, 1991, in which you request a ruling on the eligibility for duty-free treatment under U.S. Note 2(b), subchapter II, Chapter 98, Harmonized Tariff Schedule of the United States Annotated (HTSUSA) ("Note 2(b)"), of two types of industrial waterproof footwear manufactured in either Jamaica or another Caribbean Basin Economic Recovery Act (CBERA) beneficiary country (BC).

FACTS:

You intend to manufacture two different types of waterproof boots in the Caribbean. The first boot that you describe is referred to as a PVC injection molded boot. You state that the PVC pellets, color pigments, steel toecaps, nylon liner as well as all other raw materials used to manufacture the boot will be of U.S. origin. In Jamaica or other BC, the boot will be manufactured by an injection molding process and the assembly of the various components. The finished boots will then be shipped to the U.S.

The second boot that you intend to import is a dipped neoprene rubber boot. You state that all of the raw materials used to manufacture this boot will originate in the U.S. The materials will be shipped to a BC for manufacture into the finished product. The raw materials used to manufacture this boot include raw or uncured rubber, pigments, liquid neoprene rubber latex, fabric (cotton or a synthetic) to cut into the boot liner, steel toecaps, etc. The foreign processes include an injection molding operation, a triple dipping operation, and the assembly of various components. The completed boots will then be shipped to the U.S.
ISSUE:

Whether the waterproof boots to be made in Jamaica or another BC satisfy the requirements of Note 2(b), thereby enabling the products to enter the U.S. duty free.

LAW AND ANALYIS:

Section 222 of the Customs and Trade Act of 1990 (Public Law 101-382) amended U.S. Note 2, subchapter II, Chapter 98, HTSUSA, to provide for the duty-free treatment of articles (other than textile and apparel articles, and petroleum and certain petroleum products) which are assembled or processed in a CBERA BC wholly of fabricated components or ingredients (except water) of U.S. origin. This amendment was effective with respect to goods entered on or after October 1, 1990.

Note 2(b) provides as follows:

(b) No article (except a textile article, apparel article, or petroleum, or any product derived from petroleum, provided for in heading 2709 or 2710) may be treated as a foreign article, or as subject to duty, if--

(i) the article is--

(A) assembled or processed in whole of fabricated components that are a product of the United States, or

(B) processed in whole of ingredients (other than water) that are a product of the United States, in a beneficiary country; and

(ii) neither the fabricated components, materials or ingredients, after exportation from the United States, nor the article itself, before importation into the United States, enters the commerce of any foreign country other than a beneficiary country.

As stated in this paragraph, the term "beneficiary country" means a country listed in General Note

We have previously determined that footwear is not a textile or apparel article as contemplated by Note 2(b) and, therefore, is eligible for duty-free treatment. See Headquarters Ruling Letters (HRL's) 555742 dated November 5, 1990 and HRL 555794 dated February 1, 1991. With regard to the operations to be performed in Jamaica, the assembly of the components comprising the products clearly is encompassed by subsection (A) of Note 2(b)(i). Moreover, we believe that the remaining operations (e.g, injection molding and dipping processes) would qualify as "processing of ingredients" under subsection (B) of Note 2(b)(i). See HRL 555742 dated November 5, 1990. Therefore, if, in fact, all raw materials are of U.S. origin and the finished articles are shipped directly to the U.S. without entering into the commerce of any foreign country other than a BC, the boots produced in a BC will be eligible for the Note 2(b) duty exemption.

Enclosed is a copy of Headquarters telex 9264071 dated September 28, 1990, to Customs field offices, setting forth procedures for the entry of articles under Note 2(b).

HOLDING:

On the basis of the information submitted, we conclude that the described boots, manufactured in Jamaica or another BC wholly from materials of U.S. origin, may enter the U.S. duty-free pursuant to Note 2(b) provided the documentation requirements set forth in the attached telex dated September 28, 1990, are satisfied.

Sincerely,

John Durant, Director

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