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HQ 561631




March 17, 2000

CLA-2 RR:CR:SM 561631 MLR

CATEGORY: CLASSIFICATION

Mr. Frances Radics Givens
Artesanas de Cuerdas S.A.
Apartado 287-1260
Plaza Colonial, Escazú
San José, Costa Rica

RE: Eligibility of footwear from Costa Rica for duty-free treatment under U.S. Note 2(b), Subchapter II, Chapter 98, HTSUS

Dear Mr. Givens:

This is in response to your letter of February 2, 2000, regarding the applicability of duty-free treatment for certain footwear, pursuant to Section 222 of the Customs Trade Act of 1990 (Public Law 101-382), which amended U.S. Note 2, Subchapter II, Chapter 98, Harmonized Tariff Schedule of the United States (HTSUS), {hereinafter “Note 2(b)”}.

FACTS:

The articles at issue are referred to as unisex rope sandals. It is indicated that the sandals are made from “Orian Rope” of U.S. origin. Samples of the rope and the finished sandal were submitted with your letter. In Costa Rica, it is stated that the rope undergoes a heat welding manufacturing process to make the sandals. The submitted sample rope is constructed of three plies of man-made fiber yarns. The rope, if imported by itself, would probably be classifiable under heading 5607, HTSUS, which provides for twine, cordage, ropes, or cables. This rope forms the upper portion (thongs and straps) of each sandal. The bottom portion of each sandal is formed by two layers of warp only fabrics made of ropes similar to those used in the upper portion. The ropes have been assembled in parallel and are held in place by an adhesive. Three similar parallel ropes, which have also been glued together, form an edging around the sides of each sandal.

ISSUE:

Whether the finished sandals are eligible for duty-free treatment under Note 2(b).

LAW AND ANALYSIS:

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 textile and apparel articles, and petroleum and petroleum 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.

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. As used in this paragraph, the term “beneficiary country” means a country listed in General note 7(a), HTSUS, which includes Costa Rica. We have also previously held that footwear and parts of footwear are not textile and apparel articles for purposes of Note 2(b), regardless of whether they are subject to textile agreements. See T.D. 9188, 25 Cust. Bull. 45 (1991).

A Certificate of Origin is submitted from Rocky Mount Cord Company indicating that the origin of the “7/32” Text Orian Rope” is the U.S. It is stated that the sandals are made through a process of heat welding. In viewing the sample provided, the assembly and processing operations which consist of head welding and forming the rope into sandals are encompassed by the operations specified in Note 2(b). Therefore, if, in fact, all of the materials used to produce the sandals are of U.S. origin and are shipped directly to Costa Rica, and the sandals are shipped directly to the U.S. without entering into the commerce of any foreign country other than a BC, the sandals will be entitled to duty-free treatment under Note 2(b), provided all documentation requirements are met.

In regard to your question concerning the classification of the sandals, they are classifiable under subheading 6405.20.90, HTSUS, which provides for other footwear with uppers of textile materials. See New York Ruling Letter C85644 dated March 27, 1998. Furthermore, we note that the hang-tag affixed to the sandals indicates the words “Costa Rica,” and in a paragraph describing their manufacture indicates that they are “Made in Costa Rica.” Note 2(b) states that articles which are eligible for duty-free treatment under Note 2(b) may not be treated as foreign. Therefore, Customs has held that Note 2(b) articles are not subject to the country of origin marking requirements of 19 U.S.C. 1304. See HRL 558658 dated June 27, 1995. However, to the extent that your company may wish to label the sandals with the words “Costa Rica” or “Made in Costa Rica”, we do not believe that this is a false designation of origin or false description, such that the sandals would be prohibited from importation.

HOLDING:

Based upon the information provided, the sandals will be eligible for duty-free treatment under U.S. Note 2(b), provided all materials used to make the sandals are of U.S. origin, the materials and sandals meet the direct shipment requirements, and the documentary requirements of telex 9264071 (copy enclosed) are satisfied.

A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs officer handling the transaction.

Sincerely,

John Durant, Director

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