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NY C88947


July 9, 1998

CLA-2-98:RR:NC:347 C88947

CATEGORY: CLASSIFICATION

TARIFF NO.: 6404.19.35, 9802.00.5060

Marian Harding Cochran, Esq.

ATICO International USA, Inc.

P.O. Box 14368

Ft. Lauderdale, FL 33302

RE: Classification of Footwear.

Dear Ms. Cochran:

In your letter dated May 29, 1998, you requested a ruling regarding classification and applicable tariff rates for what you refer to as household slipper footwear items manufactured according to four scenarios which you describe below.

Along with your ruling request you have provided a sample of footwear made in China which you indicate represents the type of finished product resulting from all four proposed manufacturing scenarios. The sample is an open backed slipper with an outer sole of rubber or plastic and an upper of textile material. The applicable subheading for this shoe will be 6404.19.35, Harmonized Tariff Schedule of the United States, (HTS), which provides for footwear with outer soles of rubber or plastic and uppers of textile materials, footwear with open toes or open heels, not less than 10 percent by weight of rubber or plastic. The rate of duty will be 37.5 percent ad valorem.

Scenario 1: Material for the slipper top is purchased in the United States and sent to Costa Rica for cutting and finishing. The sole is injection molded in Costa Rica from raw materials produced and purchased locally in Costa Rica. The top and sole are adjoined in Costa Rica and once finished, the slippers are shipped to the United States for sale.

Scenario 2: Material for the slipper top is purchased and cut in the United States. Afterwards, the already cut materials are sent to Costa Rica for sewing/assembly. The sole is injection molded in Costa Rica from raw materials produced and purchased locally in Costa Rica. The top and sole are adjoined in Costa Rica and once finished, the slippers are shipped to the United States for sale.

Scenario 3: Material for the slipper top is purchased and cut in the United States. Afterwards, the already cut material is sent to Costa Rica for sewing/assembly. The sole is injection molded in Costa Rica from raw materials of U.S. origin, purchased in Costa Rica. The top and sole are adjoined in Costa Rica and once finished, the slippers are shipped to the United States for sale.

Scenario 4: Material for the slipper top is purchased in the United States and sent to Costa Rica for cutting and finishing. The sole is injection molded in Costa Rica from raw materials of U.S. Origin purchased in Costa Rica. The top and sole are adjoined in Costa Rica and once finished, the slippers are shipped to the United States for sale.

You state that in all four scenarios, neither the fabricated components, materials or ingredients after their exportation from the United States, nor the article before it's importation into the United States, enters into the commerce of any foreign country other than the beneficiary country.

Although your ruling request does not specifically mention the applicability of Section 222 of the Customs and Trade Act of 1990 (P.L. 101-382) amended U.S. Note 2, subchapter II, Chapter 98, HTS, ("Note 2(b)") as it applies to these scenarios, we assume that is the focus of your inquiry.

For purposes of receiving preferential tariff treatment under the Caribbean Basin Initiative, (HTS), Chapter 98, Subchapter II, U.S. Note 2(b) states that 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.

Customs has previously determined that footwear is not an article of apparel.

Based upon the information which you have provided, the manufacturing processes described in scenarios 1 through 4, constitute operations which are not minor in nature and not "incidental to the assembly process" hence, classification under subheading 9802.00.8040 (HTS) is precluded.

In Scenario 1 and 4 your letter indicates that material for the slipper top is purchased in the United States. You have not indicated that it is of U.S. origin therefore, we will not assume it is. In scenario 1 and 2, the sole material is of Costa Rican origin. In this regard the requirements of Chapter 98 (HTS), U.S. Note 2(b), will not be met for Scenario 1, 2 and 4.

If the manufacturing operation described in scenario 3 meets the requirements of Chapter 98 (HTS), U.S. Note 2(b), The slipper will be classified in subheading 9802.00.5010, as articles which are returned to the U.S. after having been exported for repairs or alterations, not made pursuant to a warranty and which meet the conditions of U.S. Note 2(b) to Subchapter II of Chapter 98 (HTS). Footwear manufactured under this scenario will be entitled to duty-free treatment under Note 2(b) provided that all materials used are shipped directly from the U.S., are of U.S. origin and shipped directly to the U.S. without entering the commerce of any foreign country other than a beneficiary country.

We suggest that you contact the Customs office in each port of entry to discuss the documentation or other evidence required to confirm that the requirements of Note 2(b) have been met.

This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).

A copy of this ruling letter 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 this ruling, contact National Import Specialist, Richard Foley at (212) 466-5890.

Sincerely,


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