The country of origin marking of unformed footwear uppers

N309030 February 14, 2020 OT:RR:NC:N:2:247 CATEGORY: Marking Mr. Mark Rave Ariat Int’l Inc. 3242 Whipple Road Union City, CA 94587 RE: The country of origin marking of unformed footwear uppers Dear Mr. Rave: In your letter dated January 16, 2020, you requested a country of origin marking ruling determination on unformed footwear uppers coming from Vietnam and/or China. The merchandise under consideration is leather, unformed, boot uppers that will be manufactured in China and/or Vietnam. The unformed uppers, no style or item numbers were provided, will be shipped to the United States where they will be further processed into completed boots. The marking statute, section 304 Tariff Act of 1930, as amended (19 U.S.C. §1304), provides that, unless excepted, every article of foreign origin (or its container) imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article.  If the unformed uppers are imported into the U.S. for processing into the finished footwear, Section 134.1(b), CBP Regulations (19 CFR §134.1(b)), applies for the purpose of assessing the country of origin of the finished footwear. 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 this part;…. A substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. A substantial transformation will not result from a minor manufacturing or combining process that leaves the identity of the article intact. Under this principle, the manufacturer or processor in the United States who converts or combines the imported article into the different article will be considered the "ultimate purchaser" of the imported article within the contemplation of section 304(a), Tariff Act of 1930, as amended (19 U.S.C. 1304(a)), and the article shall be excepted from marking. The outermost containers of the imported articles shall be marked in accord with this part. Unformed uppers are considered to have undergone a substantial transformation when they have been shaped by lasting, molding or otherwise, and having closed bottoms. We assume all of these necessary processes will occur after importation into the United States. The open, unlasted uppers imported into the U.S. do not have the “very essence” of completed footwear, unlike the formed upper subject to Uniroyal Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026 (1982), aff'd, 702 F.2d 1022 (Fed Cir. 1983). The unformed uppers at issue are assembled in the U.S. with all of the necessary parts and processes to make completed footwear. The assembled components all lose their individual identities and merge into a new and different article of commerce, with a new name, character and use. As a result of the substantial transformation of the imported upper, the subject footwear is excepted from the marking requirements of 19 U.S.C. §1304, per 19 CFR §134.35(a), supra. You claim the factory in the United States does not have the capability of marking the finished goods and you ask if a label with the proposed marking can be incorporated in Vietnam or China. If the imported unformed shoe uppers are produced in China and/or Vietnam and further processed/manufactured in the United States into a finished shoe, they are substantially transformed in the United States pursuant to 19 CFR §134.1(b). As such, per 19 CFR §134.35(a), the U.S. processor is considered the ultimate purchaser of the imported components. Inasmuch as marking requirements of 19 U.S.C. §1304 are applicable only to articles of “foreign origin,” the finished footwear will be excepted from the marking requirements of 19 U.S.C. §1304. However, regarding your proposal to mark the uppers "Assembled in USA from Imported Parts," or "Assembled in USA"is an issue under the authority of the Federal Trade Commission (FTC). We suggest that you contact the FTC, Division of Enforcement, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580 as to whether the proposed markings satisfy their requirements. Information can also be found at the FTC website www.ftc.gov. 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 Stacey Kalkines at stacey.kalkines@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division