HQ 085178

October 20, 1989

CLA-2 CO:R:C:G 085178 DFC

CATEGORY: Classification

TARIFF NO.: 6406.10.8040; 6406.10.6000

Mr. P.F. Wegener

M.G. Maher & Company, Inc.

442 Canal Street

New Orleans, La. 70130

RE: Footwear parts manufactured in Korea

Dear Mr. Wegener:

Your letter dated June 22, 1989, addressed to our New

Orleans office on behalf of NASCO-American Shoe Company Inc.,

concerning the tariff classification of certain footwear parts,

has been referred to this office for a direct reply to you.

Samples of the parts involved were submitted for examination.

FACTS:

The sample designated as NASCO N-702-4 can be easily

separated into three components, i.e., a partial boot shaft made

of PU plastic (backed with a woven textile), the braided shoelace

going around the top of the shaft (most of it hidden between the

exterior and interior layers of the shaft and emerging only from

two eyelets near the front), and a liner with three laminated

layers, i.e., nylon tricot, nylex (the flannel-like pink fabric),

and rubber or plastic foam (between the two layers of fabric).

ISSUE:

Should these components be considered a set for tariff

purposes?

If not considered a set, can the components be considered

"composite goods?"

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LAW AND ANALYSIS:

It is to be noted that if each of these three components

were imported separately, they would be classified differently.

The shaft under subheading 6406.10.60, Harmonized Tariff Schedule

of the United States Annotated (HTSUSA), as parts of footwear,

uppers and parts thereof, other, of rubber or plastics; the liner

under subheading 6406.10.8040 HTSUSA, as parts of footwear,

uppers and parts thereof, other, other, of textile materials

other than cotton, of man made fibers; and the shoelace under

subheading 6307.9050, HTSUSA, as footwear lacings.

In applying the HTSUSA, the Customs Service must follow the

terms of the statute. Classification of goods under the HTSUSA

is governed by the General Rules of Interpretation (GRI's). GRI

1 provides that "classification shall be determined according to

the terms of the headings and any relative section or chapter

notes, and, provided such headings or notes do not otherwise

require, according to [the remaining GRI's taken in order]." In

other words, classification is governed first by the terms of the

headings of the tariff and any relative section or chapter notes.

GRI 2(b), HTSUSA, provides in part that "[t]he

classification of goods consisting of more than one material or

substance shall be according to the principles of Rule 3."

GRI 3, HTSUSA, is relevant here in determining whether the

components can be considered a set or composite goods. It reads

in pertinent part as follows:

3. When by application of Rule 2(b) or for any other

reason, goods are prima facie classifiable under two

or more headings, classification shall be effected as

follows:

(a) The heading which provides the most specific

description shall be preferred to headings

providing a more general description. However,

when two or more headings each refer to part

only of the materials or substances contained

in mixed or composite goods. . . those headings

are to be regarded as equally specific in

relation to those goods, even if one of them

gives a more complete or precise description of

the goods.

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(b) Mixtures, composite goods consisting of

different materials or made up of different

components, and goods put up in sets for retail

sale which cannot be classified by reference to

3(a), shall be classified as if they consisted

of the material or component which gives them

their essential character, insofar as this

criterion is applicable.

GRI 3(b), HTSUSA is relevant here because GRI 3(a), HTSUSA,

cannot be used in determining classification. The Explanatory

Notes for GRI 3, HTSUSA, state that the term "goods put up in

sets for retail sale" means goods that:

(a) consist of at least two different articles prima

facie classifiable in different headings (or, by GRI

6, subheadings);

(b) consist of products or articles put together to meet

a particular need or carry out a specific activity;

and

(c) are put up in a manner suitable for sale directly to

users without repacking (e.g., in boxes or cases or

on boards).

The components do not qualify as "goods put up in sets for

retail sale" because they are not put up in a manner suitable for

sale directly to users without repacking. Specifically, in their

condition as imported the components must be sold to a footwear

maker because they are useless to the wearer until a rubber foot

portion is added.

Explanatory Note IX to GRI 3(b), HTSUSA, reads in pertinent

part as follows:

(IX For the purposes of this Rule, composite goods made

up of different components shall be taken to mean not

only those in which the components are attached to

each other to form a practically inseparable whole

but also those with separable components, provided

these components are adapted one to the other and are

mutually complementary and that together they form a

whole which would not normally be offered for sale in

separate parts.

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It is our view that the components do not qualify as

"composite goods" because it is doubtful that the shaft,

shoelace, and liner "form a whole which would not normally be

offered for sale in separate parts."

Liners for "moon boots" are often imported separately and

many similar boot liners are sold separately to consumers as

replacements for liners that have worn out and it is very easy to

place a liner inside a shaft of the appropriate size. For these

reasons the liner should be classified separately.

With respect to the shoelace, it is true that many

shoelaces are bought in the United States or imported separately

by shoe manufacturers and many others are bought by consumers as

replacements. However, it is our observation that this is true

generally only to laces used in oxfords and other shoes and boots

which have the shoelaces crisscrossing through flat eyelet stays.

Those laces are usually flatter than the ones here, and it is

certainly far easier for the consumer to replace a broken lace or

a maker to insert a lace in those shoes than it would be in this

item. It would take at least several minutes of patient toil to

worm a lace through the twelve inch long passage around the

topline of the boot because there is no way to maintain a grip on

the lace to pull it through. Therefore, although we consider

shoelaces crisscrossed laced into oxford uppers to be separately

classifiable, it is our position that the PU shaft and the fabric

lace constitute a "composite good." It is evident that the

essential character of this "composite good" is derived from the

far larger, more prominent, and necessary shaft, not from the

textile lace.

It should be noted that Legal Note 2 to Chapter 64, HTSUSA,

provides that "[t]he expression 'parts' does not include . . .

laces . . . ." However, we interpret this exclusion as clearly

limited to laces (and the other items listed, e.g., eyelets) when

imported separately.

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 United States. 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 marking laws and regulations. The case of U.S v.

Gibson-Thompsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940), stands

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for the principle that an article used in manufacture which

results in an article having a name, character or use differing

from that of the constituent article will be substantially

transformed.

The components are not marked to indicate the country of

origin. However, it is our opinion that they will be

substantially transformed so that marking of the cartons will

be sufficient assuming the importer or record establishes to the

port of entry that the "manufacturer or producer" will receive

them in those cartons.

HOLDING:

The liner is separately classifiable under subheading

6406.10.8040, HTSUSA, with duty at the rate of 9 percent ad

valorem. The applicable textile category is 669.

The shaft including the lace is classifiable under

subheading 6406.10.6000, HTSUSA, with duty at the rate of 5.3

percent ad valorem.

Due to the changeable nature of the statistical annotation

(the ninth and tenth digits of the classification) and the

restraint (quota/visa) categories, you should contact your local

Customs office prior to importation of this merchandise to

determine the current status of any import restraints or

requirements.

The designated textile and apparel category may be

subdivided into parts. If so, visa and quota requirements

applicable to the subject merchandise may be affected. Since

part categories are the result of international bilateral

agreements which are subject to frequent renegotiations and

changes, to obtain the most current information available, we

suggest that you check, close to the time of shipment, the

Status Report On Current Import Quotas (Restraint Levels), an

issuance of the U.S. Customs Service, which is updated weekly and

is available at your local Customs office.

Sincerely,

John Durant, Director

Commercial Rulings Division

6cc NY Seaport

1cc James Sheridan

D. Cahill library/peh

085178 DFC