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NY C85992




April 20, 1998

CLA-2-64:RR:NC:TP:347 C85992

CATEGORY: CLASSIFICATION

TARIFF NO.: 6403.91.60, 6403.91.90, 6403.99.60, 6403.99.90, 9802.00.50, 9802.00.80.

Ms. Catherine L. Holmes
A.W. Fenton
1157 Rarig Avenue
Columbus, OH 43219

RE: The tariff classification of leather footwear from Dominican Republic.

Dear Ms. Holmes:

In your letter dated March 26, 1998, written on behalf of your client, Rocky Shoes & Boots Co., Inc., you request a tariff classification ruling for leather footwear and you also inquire about duty-free entry under HTS 9802.00.50 or HTS 9802.00.80, as well as correct country of origin marking for the footwear.

You have submitted samples for two styles of leather footwear, style numbers 1702 and 1703. You state that the leather, which is of U.S. origin, is tanned, dyed and sanded in the U.S. It is then shipped in rolls to Dominican Republic where it is die cut; the removable footbeds and the linings are also shipped in rolls to Dominican Republic to be die cut. The soles, laces, eyelets, glue, threads and all other parts (except the logo) are of U.S. origin and are shipped from the U.S. to Dominican Republic in a condition ready for assembly. You state that the "Rocky" logo is made in Argentina, imported into the U.S. and shipped to Dominican Republic with the other components. In addition, to the cutting processes mentioned above, you state that assembly in Dominican Republic will include gluing, stitching, attaching hangtags and packing of the finished shoes/boots. You also state that all components will be shipped directly from the U.S. to Dominican Republic, without entering the commerce of any other country.

The completed samples that you have submitted are made up of leather uppers and rubber/plastic outer soles. You have submitted cost breakdowns for each style:

1. Style 1702:
Labor in Dominican Republic $2.00
Rocky Logo (Country of Origin Argentina) $0.15 U.S. Components $13.49
Box, hangtags, stickers (U.S. Origin) $1.56

2. Style 1703
Labor in Dominican Republic $2.00
Rocky Logo (Country of Origin Argentina)$0.15 U.S. Components $14.46
Box, hangtags, stickers (U.S. Origin) $1.54

The shoes that you have submitted are marked "made in U.S.A." The box used to package the finished boots/shoes for sale to the ultimate consumer has "made in U.S.A." written on top and on the sides and "Nelsonville, Ohio" on one side in 3/16 inch lettering.

Section 222 of the Customs and Trade Act of 1990 (Public Law 101-382) amended U.S. Note 2, Subchapter II, Chapter 98, HTSUS, to provide for the duty-free treatment of articles (other than certain specified products) which are assembled or processed in a Caribbean Basin Economic Recovery Act (CBERA) beneficiary country (BC) wholly of fabricated components or ingredients (except water) of U.S. origin.

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.

In order to qualify for Note 2(b) duty-free treatment, an eligible article must be assembled or processed in a BC entirely of components or ingredients that are a "product of" the U.S. You state that all the materials, except the logo which is made in Argentina, are shipped from the U.S. to Dominican Republic to be finished into footwear. Since all materials shipped to Dominican Republic will not be "products of" the U.S., the shoes will not be entitled to duty-free treatment under Note 2(b). Therefore, HTS 9802.00.50 or 9802.00.80 does not apply in this instance.

Based on information you provided as to the manufacturing processes involved in making the shoes, you stated that the leather material, removable footbeds, and linings are shipped in rolls to Dominican Republic where they will be sent through machines to be die cut. The merchandise at issue loses its identity and undergoes further manufacturing in Dominican Republic to produce the final product. Section 134.1(b), Customs 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 U.S. 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. Therefore, for purposes of country of origin marking, the shoes will be considered a product of Dominican Republic and should be marked with the phrase "Made in Dominican Republic."

On one side of the shoe box, the phrase "Nelsonville, Ohio" is displayed in 3/16 inch lettering. Section 134. 46 of the Customs Regulations (19 CFR 134.46) provides that in any case where the words "U.S.," "American," or any variation of such words or letters, or the name of any city or locality in the U.S., or the name of any foreign country or locality other than the country or locality in which the article was manufactured or produced, appear on any imported article or its container, there shall appear, legibly and permanently, in close proximity to such words, letters or name, and at least in a comparable size, the name of the country of origin preceded by "Made in," "Product of," of other words of similar meaning.

In order to satisfy the close proximity requirement, the country of origin marking must generally appear on the same side(s) or surface(s) in which the name or locality other than the actual country of origin appears.

Inquiries concerning the use of the phrase "Made in U.S.A." should be directed to the Federal Trade Commission (FTC). The FTC address is: Federal Trade Commission, Division of Enforcement, 6th and Pennsylvania Avenue, N.W., Washington, D.C., 20580.

The applicable subheading for style 1703, up to and including American men's size 8, will be 6403.91.90, Harmonized Tariff Schedule of the United States, HTS, which provides for footwear with leather uppers and plastic and /or rubber soles, covering the ankle, for other persons. The rate of duty is 10% ad valorem. For American men's size 8.5 and above, the applicable subheading will be 6403.91.60, HTS, which provides for footwear with leather uppers and plastic and/or rubber soles, covering the ankle, for men, youths and boys. The rate of duty is 8.5% ad valorem. The applicable subheading for style 1702, up to and including American men's size 8, will be 6403.99.90, HTS, which provides for footwear with leather uppers and plastic and/or rubber soles, not covering the ankle, for other persons, valued over $2.50 per pair. The rate of duty is 10% ad valorem. For American men's size 8.5 and above, the applicable subheading will be 6403.99.60, HTS, which provides for footwear with leather uppers and plastic and/or rubber outer soles, not covering the ankle, for men, youths and boys. The rate of duty is 8.5% ad valorem.

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 Richard Foley at 212-466-5890.

Sincerely,

Robert B. Swierupski
Director,

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