Applicability of US Note 2(b) for footwear using foam produced in the Dominican Republic with U.S. ingredients.

NY E89670 November 26, 1999 CLA-2-64:RR:NC:TP:347 E89670 CATEGORY: Classification TARIFF NO.:9802.00.5010 Ms. Sandra Tovar CST, Inc. 120 B Commerce Circle Fayetteville, GA 30214 RE: Applicability of US Note 2(b) for footwear using foam produced in the Dominican Republic with U.S. ingredients. Dear Ms. Tovar: In your letter dated November 2, 1999, written on behalf of your client, Margarita Trading, you requested a tariff classification ruling. You state that you plan to import slippers with textile or leather uppers and rubber or leather soles. Presently, the foam used in the slippers is either purchased as a completed insert or in roll form and cut in Dominican Republic. Since only U.S. materials may be cut in Dominican Republic in order to qualify for U.S. Note 2(b), you state that if foreign materials are used, they are first cut-to-shape in the U.S. Dominican Shoe Manufacturing presently buys the foam, used in the bottom of the slippers, from a U.S. supplier who produces the insert in the U.S. This ruling request is for future production to determine eligibility before any changes are made. You ask whether foam produced in Dominican Republic with U.S. origin ingredients and used in slipper production, allow the slippers to maintain eligibility of U.S. Note 2(b) heading 9802.00.50.10. The foam production performed in Dominican Republic is summarized below: 1. Polyol polymer, isocyanate, catalyst, silicone and water are mixed. The polyol polymer and isocyanate are produced in the United States by Dow Chemical and BASF. The catalyst and silicone are produced in the United States by Crompton Knowes (Witco) and Air Products. 2. The mixture is poured into a mold where it hardens into a loaf shaped block of foam. 3. The foam is then sliced into thin layers ranging in thickness from 3/8 inch to 1 ½ inch. 4. The thin layers are trimmed to fit the slipper. 5. The foam inserts are then glued (with U.S. origin glue) to Texon or Bontex board (also U.S. origin) to support and maintain the foam. The inserts are then used in the assembly process of the slippers. 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. The footwear which has been produced according to your scenario could be eligible for duty-free treatment under U.S. Note 2(b), Subchapter II of Chapter 98, HTSUS. Since you state that foreign materials, if used, are first cut-to-shape in the U.S.before being produced into footwear in Dominican Republic, and providing that all other components used to make the footwear in Dominican Republic are of U.S. origin and all other requirements for U.S. Note 2(b) are met, footwear in this scenario could be eligible for duty-free treatment. Since both “processing” and “assembly” procedures take place in Dominican Republic to make the footwear, classification at 9802.00.5010, HTS, free of duty, would apply. 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 Richard Foley at 212-637-7089. Sincerely, Robert B. Swierupski Director, National Commodity Specialist Division