Reconsideration of New York Ruling Letter N138015, dated January 6, 2011; classification of footwear from China

HQ H174858 November 20, 2012 CLA-2 OT:RR:CTF:TCM H174858 LWF CATEGORY: Classification TARIFF NO.: 6402.99.40 Donald S. Simpson Barthco International, Inc. 5101 South Broad St. Philadelphia, PA 19112 RE: Reconsideration of New York Ruling Letter N138015, dated January 6, 2011; classification of footwear from China Dear Mr. Simpson: This is in response to a request for reconsideration dated June 29, 2011, made on behalf of CVS Pharmacy, Inc. (“CVS”) of New York (“NY”) ruling letter N138015, issued to CVS by U.S. Customs and Border Protection (“CBP”) on January 6, 2011. The issues addressed by this reconsideration ruling originated in a request for a ruling made by CVS on December 7, 2010, pertaining to the tariff classification of footwear from China. The resulting ruling NY N138015 classified the footwear, identified as “a woman’s thong sandal, Item 831456,” under subheading 6402.99.40, of the Harmonized Tariff Schedule of the United States (“HTSUS”), which provides for “Other footwear with outer soles and uppers of rubber or plastics: Other footwear: Other: Other: Other: Footwear with open toes or open heels…” You assert that the classification of the subject footwear was in error and that the correct tariff classification is subheading 6402.99.31, HTSUS, which provides for “Other footwear with outer soles and uppers of rubber or plastics: Other footwear: Other: Other: Having uppers of which over 90 percent of the external surface area (including any accessories or reinforcements such as those mentioned in note 4(a) to this chapter) is rubber or plastics (except footwear having a foxing or a foxing-like band applied or molded at the sole and overlapping the upper and except footwear designed to be worn over, or in lieu of, other footwear as a protection against water, oil, grease or chemicals or cold or inclement weather): Other: Other.” FACTS: The merchandise involved in this request for reconsideration is a woman’s open-toe, open-heel thong sandal, Item# 831456, that features an outer sole and upper composed of rubber and plastics. The “Y”-shaped straps comprising the upper have small metal rings, wooden beads, and wrapped textile cord attached to its surface. Two braided cords are threaded through pre-cut holes in the straps of the upper and secured at their ends with knots. The cords are then threaded through metal rings and wooden beads in a repeating pattern to form a decorative motif. After passing through groups of rings and beads, the cord is also stitched into and wrapped around the strap to secure the ornamentation along the entire strap. The ornamental rings, beads, and braided cord hide, but do not completely obscure, the upper. A sample of the thong sandal was submitted to CBP Laboratories and Scientific Services for laboratory testing to determine the composition of the external surface area of the upper (ESAU), as the sample appeared in its original condition. CBP Lab No. NY20121035, dated May 3, 2012, states that the ESAU of the sample consists of approximately 51% metal, 27% rubber/plastic, 11% wood, and 11% textile material. ISSUE: Whether the footwear is classified in subheading 6402.99.31, HTSUS, as footwear having uppers of which over 90% of the external surface area is rubber or plastics, or in subheading, 6402.99.40, HTSUS, as other footwear with open toes or open heels? LAW AND ANALYSIS: Classification of goods under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined according to the terms of the heading of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the heading and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, and any related subheading notes, and mutatis mutandis to the GRIs 1 through 5. There is no dispute that the subject merchandise is classified in heading 6402, HTSUS, as “[o]ther footwear with outer soles of rubber or plastic,” or specifically, as “other” footwear of subheading 6402.99, HTSUS, at GRI 6. As such, the only issue is the classification of the footwear at the eight-digit level. The HTSUS provisions under consideration in this case are as follows: 6402: Other footwear with outer soles and uppers of rubber or plastics: Other footwear: 6402.99: Other: Other: Having uppers of which over 90 percent of the external surface area (including any accessories or reinforcements such as those mentioned in note 4(a) to this chapter) is rubber or plastics (except footwear having a foxing or a foxing-like band applied or molded at the sole and overlapping the upper and except footwear designed to be worn over, or in lieu of, other footwear as a protection against water, oil, grease or chemicals or cold or inclement weather): Other: 6402.99.31: Other… Other: Other: 6402.99.40: Footwear with open toes or open heels; footwear of the slip-on type, that is held to the foot without the use of laces or buckles or other fasteners, the foregoing except footwear of subheading 6402.99.20 and except footwear having a foxing or a foxing-like band wholly or almost wholly of rubber or plastics applied or molded at the sole and overlapping the upper… * * * * * You contend that the subject footwear should be classified in subheading 6402.99.31, HTSUS, as footwear of which over 90% of the ESAU is rubber or plastics. To that end, you claim that CBP erroneously considered the attached metal ring and bead ornamentation in its classification of the footwear in NY N138015. Note 4(a) to Chapter 64, HTSUS, provides in relevant part: The material of the upper shall be taken to be the constituent material having the greatest external surface area, no account being taken of accessories or reinforcements such as ankle patches, edging, ornamentation, buckles, tabs, eyelet stays or similar attachments[.] Note 4(a), therefore, instructs CBP to exclude accessories or reinforcements attached to the upper when determining the appropriate heading under Chapter 64, HTSUS. See also Treasury Decision (T.D.) 93-88, dated October 25, 1993. In this case, the thong sandal, exclusive of the metal rings, wooden beads, and braided cord attached to the merchandise’s upper, is composed entirely of rubber and plastics. Consequently, classification under heading 6402, HTSUS, as other footwear with outer soles and uppers of rubber or plastics, is appropriate. Upon reaching the subheading level, however, the terms of 6402.99.31, HTSUS, provide for footwear having uppers of which over 90 percent of the external surface area is rubber or plastics, “including any accessories or reinforcement such as those mentioned in note 4(a) to this chapter” (emphasis added). In other words, for the purposes of classification within subheading 6402.99.31, HTSUS, CBP must disregard the instruction in note 4(a) to exclude such accessories and reinforcements from the calculation of the ESAU. In determining the external surface area of the upper for purposes of classification under subheading 6402.99.31, HTSUS, CBP has held that the terms of subheading do not require CBP to include every accessory or reinforcement that was excluded under note 4(a) to Chapter 64. See Headquarters Ruling Letter (HQ) 082661, dated October 17, 1988. Accessories or reinforcements that are attached to the upper by means of minimal stitching, tacking or a single rivet are loosely attached appurtenances and, thus, are not considered for classification purposes. Id. Determining whether or not an accessory or reinforcement is a loosely attached appurtenance is a fact specific inquiry. In the past, CBP has ruled that textile flowers, fabric bows, and pom-poms that are secured by minimal stitching (one or two) or a single rivet are examples of loosely attached appurtenances. See HQ H092482, dated April 12, 2011; NY N048159, dated January 6, 2009. By contrast, sequins, beads, buckles, studs, decorative rivets, embroidered flowers or bow, imitation jewels, shells, and wooden decorations are accessories or reinforcements that should be included when calculating external surface area under the terms of subheading 6402.99.31, HTSUS. Id. Consideration is also given to whether the removal of the accessories or reinforcements would result in excessive holes that render the upper unserviceable. See HQ H084599, dated February 1, 2010. In contrast to the examples of textile flowers, bows, or other articles attached by minimal stitching or a single rivet, the instant ornamentation is attached to the upper by a braided cord that is alternatingly sewn through or tightly wrapped around the upper at multiple reinforcement positions. Inasmuch as the braided cord is wrapped around the strap of the upper, the cord itself also functions as a decorative accessory. Although removal of the ornamentation would not render the upper unserviceable, the absence of ornamentation from the upper would reveal no fewer than 40 holes along the center of the sandal strap, through which rings, beads, and cord had been attached. Therefore, we find that the metal rings, wooden beads, and braided cord cannot be described as loosely attached appurtenances and must be considered when determining the ESAU for purposes of subheading 6402.99.31. Laboratory analysis by CBP indicates that the ornamentation obscures much of the upper, and that the total ESAU is less than 90 percent rubber or plastic, inclusive of the decorative attachments. The instant sandal is thus precluded from classification in subheading 6402.99.31, HTSUS. Consequently, the appropriate classification within heading 6402, HTSUS, is subheading 6402.99.40, which provides for "Footwear with open toes or open heels; footwear of the slip-on type, that is held to the foot without the use of laces or buckles or other fasteners," and which only requires that the greater part of the ESAU be composed of rubber or plastics, without taking into account accessories and reinforcements. HOLDING: By application of GRIs 1 and 6, the woman’s open-toe, open-heel thong sandal is classifiable under heading 6402, HTSUS. Specifically, it is classifiable under subheading 6402.99.40, HTSUS, which provides for “Other footwear with outer soles and uppers of rubber or plastics: Other footwear: Other: Other: Other: Footwear with open toes or open heels.” The column one, general rate of duty is 37.5 percent ad valorem. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS, with accompanying duty rates, is provided on the World Wide Web at http://www.ustic.gov. EFFECT ON OTHER RULINGS: NY N138015, dated January 6, 2011, is hereby AFFIRMED. Sincerely, Myles B. Harmon, Director Commercial Trade Facilitation Division