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NY 817452




January 2, 1996

CLA-2-64:RR:NC:TP:346 817452

CATEGORY: CLASSIFICATION

TARIFF NO.: 6405.20.30, 6405.20.90

Mr. V. Hanson
Hanson Holdings
POB 163
Plainview, NY 11803

RE: The tariff classification of reversible slippers from Canada, NAFTA, 9802.00.80

Dear Mr. Hanson:

In your letters dated 11-21-95 and 12-6-95, you requested a tariff classification ruling.

You have now submitted four samples, styles 6200, 6300, 6400, and 6500. All four have uppers and stitched-on outer soles of textile materials, whether worn reversed or not. Unlike previous samples you have submitted, none of these four fabrics have any plastic coating on their outside surfaces.

You did not answer the questions we asked in our 11-30-95 letter to you concerning in the fibers in the uppers. Therefore, there are two classifications which may apply to the slippers.

The applicable subheading for all, or some, or none of the four samples will be 6405.20.30, Harmonized Tariff Schedule of the United States (HTS), which provides for footwear, in which the outer sole's external surface is not predominately rubber, plastics, leather or composition leather; in which the upper's external surface is predominately textile materials; which has a line of demarcation between the sole and upper; and in which the upper, by weight, predominately consists of vegetable fibers such as cotton or flax (linings, accessories and reinforcements not included). The general duty rate would be 7.5 percent.

If not the above, the subheading will be 6405.20.90, HTS, which provides for footwear, in which the outer sole's external surface is not predominately rubber, plastics, leather, or composition leather; in which the upper's external surface is predominately textile materials; and in which the upper, by weight, predominately consists of fibers other than vegetable fibers or wool (linings, accessories & reinforcements not included). The general duty rate would be 12.5 percent.

You stated in your 11-21 letter, "Since all materials will be supplied from the USA, we understand that we will pay duty on the labor only". However, you replied in your 12-6 letter to our question about whether components would be sent to Canada by stating, "We will supply all fabric, etc. in sheets, rolls, fiberfill in bulk rolls, elastic on spools, etc." Based on that statement, your understanding is basically wrong. The dutiable value will include the cost of the materials and their freight and handling charges to the Canadian maker in addition to the labor charges, which should, of course, include all direct and indirect overhead and profit for the Canadian producer. The one exception may be the "elastic on spools". Its value, as it crosses the USA border with Canada, will be eligible for a separate, duty free classification in 9802.00.8065, HTS, if, prior to assembly, it is only snipped to the lengths needed in Canada; if it is a product of the USA, not merely supplied from the USA; and if all other requirements are met, especially those in Customs Regulations Sections 10.11 through 10.24.

You indicate in your 11-21 letter that the Canadian maker plans to export the finished slippers to the USA as entitled to NAFTA duty preference. Since you did not answer our question about whether the materials which you will send to Canada would be products of the USA and, more specifically, you did not make a statement that no non-NAFTA man-made fibers, spun natural fibers, or later processing will be used to produce those materials, we do not know whether or not that is correct. It is clear that the Tariff shift test in General Note 12-t-64-1, HTS, will be met, but we cannot determine whether there will be "a Regional Value Content (RVC) of not less than 55 percent under the net cost method." If you desire a ruling regarding the RVC of your goods and their eligibility for NAFTA preferential treatment, send the information noted in Section 181.93(b) of the Customs Regulations (19 CFR 181.93(b)), to the Director, Commercial Rulings Division, Headquarters, U.S. Customs Service, 1301 Constitution Ave. N.W., Franklin Court, Washington, D.C. 20229, along with a copy of this letter.

You requested that we return your samples. They are being returned in a separate mailing.

This ruling is being issued under the provisions of Section 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 J. Sheridan at 212-466- 5889.

Sincerely,

Roger J. Silvestri
Director

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