RE: Request for Reconsideration of NY N310029; Country of Origin; Leather Hides

HQ H355209 August 5, 2026 OT:RR:CTF:VS H355209 EE CATEGORY: Origin Ms. Angie Courteau LZB Manufacturing, Inc. One La-Z-Boy Drive Monroe, MI 48162 RE: Request for Reconsideration of NY N310029; Country of Origin; Leather Hides Dear Ms. Courteau: This is to inform you that U.S. Customs and Border Protection (“CBP”) has reconsidered New York Ruling Letter (“NY”) N310029, dated March 24, 2020, concerning the country of origin of certain finished leather hides. We have reviewed NY N310029 and determined it to be in error for the reasons set forth herein. Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. § 1625(c)(1)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. No. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed action was published on June 17, 2026, in Volume 60, Number 15, of the Customs Bulletin. No comments were received in response to this notice. FACTS: In NY N310029, the leather hides at-issue were described as follows: The bovine leather, identified as “Leather Hides, Item number LB1728” will be imported as whole hides that are approximately 45 to 55 square feet each. The leather is mainly sourced from the United States, Germany, Sweden, Australia, Great Britain, and Brazil. The leather hides sourced from Brazil are processed from raw hide to wet-blue state (classifiable in heading 4104 when imported in the wet state) and shipped and exported to Vietnam to undergo further processing
as listed below. The finished article will be used as upholstery leather in the manufacture of furniture (classifiable in heading 4107). 1) Process done in Brazil, from raw hide to wet-blue state: a) Curing - Raw hides and skins must be preserved to stop them from deteriorating before the leather-making process can begin. Methods of preservation include salting, chilling, freezing and the use of biocides. b) Soaking - Cured hides or skins are soaked in water for several hours to several days. This allows them to reabsorb any water they may have lost in the curing process or during transportation. It also helps to clean them of salt and dirt. c) Liming - Liming removes the epidermis and hair. This also results in alkaline swelling of the pelt to cause a controlled breaking of some of the chemical crosslinks of the collagen. d) Fleshing - After liming, the pelt is passed through a machine to remove fleshy tissue from the flesh side. Hides may be split into layers at this stage or after tanning. e) Deliming - The principal action of deliming is to gradually neutralize the alkali in the pelt, avoiding rapid changes in pH which could lead to distortion or disruption of the tissues. f) Bating - A long delime can significantly improve the removal of any remaining lime, scud (miscellaneous debris) and residual components broken down during liming. Bating - based on the use of enzymes - completes this process so that the pelt is flat, relaxed, clean and ready for pickling and tanning. g) Pickling - Weak acid and salt solutions are used to bring the pelt to the weakly acid state required for most tanning processes. Stronger pickling solutions are used to preserve pelts so that they can be stored or transported in a stable form over periods of several months. h) Degreasing - Solvents or water-based systems can be used to remove excess grease before tanning. i) Tanning - Tanning converts the protein of the raw hide or skin into a stable material, which will not putrefy and is suitable for a wide variety of purposes. Tanning materials form crosslinks in the collagen structure and stabilize it against the effects of acids, alkalis, heat, water and the action of micro-organisms. The main types of tanning materials are mineral tannages. Most leather is tanned using salts of chromium. 2) Process done in Vietnam, from wet-blue state to finished upholstery leather: a) Splitting - A splitting machine slices thicker leather into two layers. The layer without a grain surface can be turned into suede or have an artificial grain surface applied. b) Shaving - A uniform thickness is achieved by shaving the leather on the non- grain side using a machine with helical blades mounted on a rotating cylinder. 2
c) Neutralization - Neutralizing removes residual chemicals and prepares the leather for further processing and finishing. Additional tanning material may be applied to give particular properties which are required in the finished leather. d) Dyeing - The dyeing of leather into a wide variety of colors plays an important part in meeting fashion requirements. Some leathers are only surface dyed, while others need completely penetrated dyeing, as is the case with suede leathers. e) Fatliquoring - Fatliquoring introduces oils to lubricate the fibers and keep the leather flexible and soft. Without these oils, the leather will become hard and inflexible as it dries out. f) Sammying - This process reduces water content to about 55% and can be achieved by a number of machines, the most common being like a large mangle with felt covered rollers. g) Setting out - The leather is stretched out and the grain side is smoothed. This process also reduces the water content to about 40%. h) Final drying - Leather is normally dried to 10-20% water content. This can be achieved in a number of ways and each method has a different effect on the finished leather. i) Staking and dry drumming - A staking machine makes the leather softer and more flexible by massaging it to separate the fibers. To finish off, the leather may be softened by the tumbling action inside a rotating drum. j) Buffing and Brushing - The flesh surface is removed by mechanical abrasion to produce a suede effect or to reduce the thickness. In some cases, the grain surface is buffed to produce a very fine nap, e.g. nubuck leathers. After buffing, the leather is brushed to remove excess dust. k) Finishing - The aims of finishing are to level the color, cover grain defects, control the gloss and provide a protective surface with good resistance to water, chemical attack and abrasion. l) Final grading - Leather will be graded before dispatch to the customer. This grading may consider the color intensity and uniformity, the feel of the leather, softness, visual appearance, thickness, design effects and natural defects such as scratches. m) Measurement – The area of each piece of leather is measured by machine. Nearly all leather is sold by area, so accurate measurement is important. In NY N310029, CBP found that the finished leather hides were substantially transformed in Vietnam such that the country of origin for duty purposes was Vietnam. ISSUE: What is the country of origin of the finished leather hides for duty purposes? LAW AND ANALYSIS: When determining the country of origin for purposes of applying current trade remedies, the substantial transformation analysis is applicable. The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new 3
name, character, or use different from that possessed by the article prior to processing. See Texas Instruments, Inc. v. United States, 69 CCPA 151 (1982). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). In NY N310029, CBP found that the country of origin of the finished leather hides was Vietnam. Specifically, CBP found that splitting, shaving, neutralization, dyeing, sammying, fatliquoring, conditioning and staking, buffing and brushing, and finishing process performed in Vietnam substantially transformed the wet blue hides into a new and different article, having a new name, character, and use. Upon further review, we find that the processing in Vietnam is similar to processing performed on wet blue hides in prior CBP rulings where CBP found that the processing did not constitute a substantial transformation. In Headquarters Ruling Letter (“HQ”) W559969, dated February 3, 1997, CBP revoked an earlier ruling, HQ 557714, dated September 9, 1994, where CBP held that the processes performed in Mexico on wet blue split sides which consisted of shaving, re-tanning, coloring, fatliquoring, and conditioning known as “staking” resulted in a substantial transformation. In HQ W559969, CBP found that the processes performed in Mexico did not result in a substantial transformation, as the exported article, wet blue, was actually leather, and the additional operations performed to make conditioned crust leather were only finishing operations similar to those involved in HQ 556242, dated October 2, 1991. See also HQ 560381, dated June 13, 1997 (CBP found that virtually identical operations occurred in this case as in HQ W559969, except that the hides were also split in Mexico). In HQ 556242, CBP considered, the duty applicability for purposes of Note 2(b), subchapter II, Chapter 98, HTSUS, to non-perishable crust leather imported into the United States from several South American countries. The operations performed in the United States included among the following operations: 1. Re-tanning the crust for more consistent texture; 2. Coloring the crust based on the desired finished color; 3. Fatliquoring or oiling to change the texture of the leather; 4. Drying; 5. Dampening if vacuum drying was used; 6. Dry milling by tumble drying for a softer feel; 7. Toggling to stretch the hides back to yield size after shrinkage; 8. Mechanical softening to further soften the leather; 9. Embossing the leather with the desired print pattern; 10. Painting to desired color; and 11. Sealing and trimming. CBP held that the material imported into the United States did not undergo a substantial transformation by the operations performed in the United States as the operations were cosmetic in nature and the crust leather and the finished leather were the same product at different stages of production. Consistent with CBP’s previous rulings, we find that the operations performed in Vietnam do not substantially transform the wet blue hides from Brazil. The processing in 4
Vietnam is cosmetic in nature and akin to finishing operations. Accordingly, we find that the country of origin of the finished leather processed in Vietnam is Brazil. HOLDING: The country of origin of the finished leather is Brazil. EFFECT ON OTHER RULINGS: NY N310029, dated March 24, 2020, is hereby REVOKED. In accordance with 19 U.S.C. § 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin. Sincerely, Yuliya A. Gulis, Director Commercial and Trade Facilitation Division 5