Revocation of One Ruling Letter and Revocation of Treatment Relating to the Tariff Classification of Men’s Outerwear Jackets from China

In New York Ruling Letter (“NY”) K82923, CBP classified the jackets in subheading 6201.93, HTSUS, which provides for “[m]en’s or boys’ overcoats, carcoats, capes, cloaks, anoraks (including skijackets), windbreakers and similar articles (including padded, sleeveless jackets), other than those of heading 6203: Anoraks (including ski-jackets), windbreakers and similar articles (including padded, sleeveless jackets): Of man-made fibers.” CBP has reviewed NY K82923 and has determined the ruling letter to be in error. It is now CBP’s position that style #1222, Men’s Manticore Jacket, and style #1228, Men’s Sphinx Jacket are properly classified, in subheading 6210.20.50, HTSUS, which provides for “[g]arments, made up of fabrics of heading 5602, 5603, 5903, 5906 or 5907: Other garments, of the type described in heading 6201: Of man-made fibers: Other.”

More information at VOL. 59, NO. 49, begiing at pwge 60.

2022 Harmonized Schedule 5 Year Update Delayed

U.S. Customs and Border Protection (CBP) understands that the five-year World Customs Organization harmonized tariff schedule update will not take effect January 1, 2022. CBP is awaiting formal direction for this update, which will be implemented by Presidential Proclamation and published in the Federal Register. In the interim, CBP will continue to use the current harmonized tariff schedule and encourages the trade community to do the same until further guidance is provided.

The U.S. International Trade Commission (USITC) has recommended that the President make certain modifications to the Harmonized Tariff Schedule of the United States

The U.S. International Trade Commission (USITC) has recommended that the President make certain modifications to the Harmonized Tariff Schedule of the United States (HTS) to conform it with World Customs Organization (WCO) amendments to the global Harmonized System.

The recommended modifications would modify the U.S. tariff schedule to conform with amendments made to the Harmonized System nomenclature by the World Customs Organization on June 28, 2019, with expected implementation date of January 1, 2022. The WCO Recommendation contains about 350 amendments to the Harmonized System nomenclature relating to a wide range of products and product groups, including, for example:

• flat panel display modules;
• 3D printers;
• electronic textiles;
• unmanned aerial vehicles (i.e., drones);
• smartphones;
• electric vehicles;
• novel tobacco products intended for inhalation without combustion;
• edible insect products;
• edible microbial fats and oils;
• virgin and extra virgin olive oil;
• cell therapy products;
• rapid diagnostic test kits for detecting the Zika virus and other mosquito-borne diseases;
• placebos and double-blinded clinical trial kits;
• parts for improvised explosive devices;
• electronic waste (e-waste) and other hazardous waste;
• amusement park equipment;
• cultural articles (i.e., antiquities);
• hazardous chemicals controlled by the Rotterdam Convention;
• ozone-depleting substances controlled by the Montreal Protocol;
• products controlled by the Organization for the Prohibition of Chemical Weapons; and
• fentanyl-opioid substances and derivatives controlled by the International Narcotics Control Board.

Of interest to followers of Agathon Associates --

• 5501.10, Synthetic filament two of nylon or other polyamides, is being broken out as
  • 5501.11, Synthetic filament two of nylon or other polyamides: of aramids and
  • 5501.19, Synthetic filament two of nylon or other polyamides: other
• Changes to floor coverings classified in Chapter 57
• Changes to terry towel fabric classified in Chapter 58
• Certain textile products and articles, for technical uses classified in Chapter 59
• Knit apparel of Chapter 61
• Non-knit apparel of Chapter 62

The changes appear not to affect tariff rates or country of origin determinations. However, imports will need to take care when the changes take effect to use the new classifications. Changed classifications will, also, make it more difficult to track import data over time.

The Commission’s report, Recommended Modifications in the Harmonized Tariff Schedule, 2021, Inv. No. 1205-13, USITC Publication 5171, March 2021, is available on the USITC web site at: https://www.usitc.gov/publications/other/pub5171.pdf.

Upcoming Changes to Tariff Classification will Affect Glass Fiber, Several Other Commodities

The Harmonized Commodity Description and Coding System generally referred to as "Harmonized System" or simply "HS" is a multipurpose international product nomenclature developed by the World Customs Organization ("WCO").

It comprises about 5,000 commodity groups; each identified by a six digit code (subheadings), arranged under four digit in a legal and logical structure and is supported by well-defined rules to achieve uniform classification. The system is used by more than 200 countries and economies as a basis for their Customs tariffs and for the collection of international trade statistics. Over 98% of the merchandise in international trade is classified in terms of the HS. The HS is modified every five years.

HS 2022, which is the seventh edition of the Harmonized System (HS) nomenclature used for the uniform classification of goods traded internationally all over the world, has been accepted by the all Contracting Parties to the Harmonized System Convention. It shall come into force on 1 January 2022.

The HS serves as the basis for Customs tariffs and for the compilation of international trade statistics in 211 economies (of which 158 are Contracting Parties to the HS Convention). The new HS2022 edition makes some major changes to the Harmonized System with a total of 351 sets of amendments covering a wide range of goods moving across borders. Here are some of the highlights:

Adaption to current trade through the recognition of new product streams and addressing environmental and social issues of global concern are the major features of the HS 2022 amendments.

Visibility will be introduced to a number of high profile product streams in the 2022 Edition to recognise the changing trade patterns. Electrical and electronic waste, commonly referred to as e-waste, is one example of a product class which presents significant policy concerns as well as a high value of trade, hence HS 2022 includes specific provisions for its classification to assist countries in their work under the Basel Convention. New provisions for novel tobacco and nicotine based products resulted from the difficulties of the classification of these products, lack of visibility in trade statistics and the very high monetary value of this trade. Unmanned aerial vehicles (UAVs), commonly referred to as drones, also gain their own specific provisions to simplify the classification of these aircraft. Smartphones will gain their own subheading and Note, which will also clarify and confirm the current heading classification of these multifunctional devices.

Major reconfigurations have been undertaken for the subheadings of heading 70.19 for glass fibres and articles thereof and for heading 84.62 for metal forming machinery. These changes recognize that the current subheadings do not adequately represent the technological advances in these sectors, leaving a lack of trade statistics important to the industries and potential classification difficulties.

One area which is a focus for the future is the classification of multi-purpose intermediate assemblies. However, one very important example of such a product has already been addressed in HS 2022. Flat panel display modules will be classified as a product in their own right which will simplify classification of these modules by removing the need to identify final use. Health and safety has also featured in the changes. The recognition of the dangers of delays in the deployment of tools for the rapid diagnosis of infectious diseases in outbreaks has led to changes to the provisions for such diagnostic kits to simplify classification. New provisions for placebos and clinical trial kits for medical research to enable classification without information on the ingredients in a placebos will assist in facilitating cross-border medical research. Cell cultures and cell therapy are among the product classes that have gained new and specific provisions. On a human security level, a number of new provisions specifically provide for various dual use items. These range from toxins to laboratory equipment.

Protection of society and the fight against terrorism are increasingly important roles for Customs. Many new subheadings have been created for dual use goods that could be diverted for unauthorized use, such as radioactive materials and biological safety cabinets, as well as for items required for the construction of improvised explosive devices, such as detonators.

Goods specifically controlled under various Conventions have also been updated. The HS 2022 Edition introduces new subheadings for specific chemicals controlled under the Chemical Weapons Convention (CWC), for certain hazardous chemicals controlled under the Rotterdam Convention and for certain persistent organic pollutants (POPs) controlled under the Stockholm Convention. Furthermore, at the request of the International Narcotics Control Board (INCB), new subheadings have been introduced for the monitoring and control of fentanyls and their derivatives as well as two fentanyl precursors. Major changes, including new heading Note 4 to Section VI and new heading 38.27, have been introduced for gases controlled under the Kigali Amendment of the Montreal Protocol.

The changes are not confined to creating new specific provisions for various goods. The amendments also include clarification of texts to ensure uniform application of the nomenclature. For example, there are changes for the clarification and alignment between French and English of the appropriate way to measure wood in the rough for the purposes of subheadings under heading 44.03.

CBP Considers Complex Apparel Classification Questions

Customs Bulletin And Decisions, Vol. 53, No. 40, November 6, 2019, contains two items of interest--

Proposed Modification Of Twelve Ruling Letters And Proposed Revocation Of Two Ruling Letters And Proposed Revocation Of Treatment Relating To The Tariff Classification Of Garments With Overlays. In this very complex case garments were constructed of both knitted and woven fabric in the same garment making it difficult to determine which fabric imparts the essential character. Further there was the question of whether the overlay fabric "constitutes more than mere trimming."

Proposed Modification Of Three Ruling Letters And Proposed Revocation Of Treatment Relating To The Tariff Classification Of Women’s Shirts With Partial Openings And No Means Of Closure. In this case the garments might be classified as shirts, sweaters, or in a basket classification of "other" garments. Specifically, at issues was "Is a means of closure necessary for garments of heading 6106, HTSUS?"

In such complex cases CBP often consults the Harmonized Commodity Description and Coding System Explanatory Notes ("ENs") which constitute the "official interpretation of the Harmonized System" at the international level. (See 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).) While neither legally binding nor dispositive, the ENs "provide a commentary on the scope of each heading" of the HTSUS and are "generally indicative of [the] proper interpretation" of these headings. However, the Harmonized System ("HS") itself, and the U.S. tariff schedule that is based on the HS, the ENs are available only for purchase, and they are quite expensive, 749 Euro. And, as they are periodically updated, that is a recurring cost.

Of Sausage and Trade Law

The Harmonized Tariff Schedule Chapter 50 provisions relating to impregnated, coated, covered, or laminating textiles are a frequent source of confusion.

On May 2, 2019, in KALLE USA, INC., Plaintiff-Appellant v. UNITED STATES, Defendant Appellee the U.S. Court of Appeals for the Federal Circuit, in a tariff classification case involving imported sausage casings, where Kalle USA, Inc. appealed the Court of International Trade's summary judgment decision classifying the casings as made-up textiles under subheading 6307.90.98 of the Harmonized Tariff Schedule of the United States, arguing that the Trade Court erroneously interpreted the phrase "completely embedded in plastics" as it is used in HTSUS Chapter 59 Note 2(a)(3), and that the casings should be classified as plastics under HTSUS Chapter 39, affirmed the lower court ruling.

U.S. Court of International Trade Rules Pet Carriers Are Textile Articles

In QUAKER PET GROUP, LLC, Plaintiff, v. UNITED STATES, Defendant, before: Gary S. Katzmann (Slip Op. 19–40) --

The court returns to the question of the tariff classification under the Harmonized Tariff Schedule of the United States (2012) ("HTSUS") of Plaintiff Quaker Pet Group, LLC’s ("Quaker Pet") pet carrier products. Previously, the court held that, as a matter of law, Quaker Pet’s carriers could not be classified under HTSUS heading 4202, which comprises containers that organize, store, protect, and carry various items, because pets are living beings and not items. Quaker Pet Group, LLC v. United States, 42 CIT__, 287 F. Supp. 3d 1348 (2018). However, the undisputed facts available to the court at that time were insufficient to determine whether the pet carriers could be covered by HTSUS 6307 — a provision containing made up articles of textile that are not included under another tariff category — or some other HTSUS heading. Id. at 1359–60. The parties have undertaken discovery and provided the court with additional, undisputed facts, which now permit the court to conclude that Quaker Pet’s carriers should be classified under HTSUS 6307.

Announcement of Program for the Private Sector To Participate in Trade-Related Training of U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement Personnel

On February 16, 2018, U.S. Customs and Border Protection published in the Federal Register (83 FR 7064) the process to solicit, evaluate, and select interested parties in the private sector to fulfill agency needs for instruction and related instructional materials for trade-related training, pursuant to section 104 of the Trade Facilitation and Trade Enforcement Act of 2015 (TFTEA).

Background

On February 24, 2016, former President Barack Obama signed into law the Trade Facilitation and Trade Enforcement Act (TFTEA), (Pub. L. 114-125, 130 Stat. 122, Feb. 24, 2016) (19 U.S.C. 4301 note). Section 104 of the TFTEA directs the Commissioner of U.S. Customs and Border Protection (CBP) and the Director of U.S. Immigration and Customs Enforcement (ICE) to establish and carry out, on a fiscal year basis, trade-related educational seminars to: (1) Improve the ability of personnel of CBP to classify and appraise imported merchandise; (2) improve the trade enforcement efforts of CBP and ICE personnel; and (3) otherwise improve the ability and effectiveness of CBP and ICE personnel to facilitate legitimate international trade. Interested parties in the private sector that meet the guidelines and criteria set forth in this notice and are selected by CBP or ICE may provide instruction and related instructional materials at these seminars pursuant to section 104.

Topics upon which training may be conducted include tariff classification, customs valuation, country of origin (including procedures for identifying merchandise bearing mislabeled country of origin markings), proper assessment of AD/CVD, evasion of duties on imports of textiles, border enforcement of IPR, enforcement of child labor laws, and other topics as appropriate and useful as concerns the trade-related duties and missions of CBP and ICE.

Trade-Related Training by Private Sector Parties

Interested parties desiring to conduct training under this program will be selected based on: (1) The availability of CBP and ICE personnel for such training; (2) the relevance of the training to the topics specified in section 104; (3) the usefulness of the proposed training as concerns the trade-related duties and missions of CBP and ICE; (4) any existing or future need to train CBP and ICE personnel on identifying and detecting incorrect or false country of origin with respect to imported merchandise; and (5) the expertise and experience of the proposed private sector instructors in the subject matter of the proposed training.

Importer Uses Little-Understood Provision to Reduce Duty on Women's Coat from 27.7% to 7.1%.

According to U.S. Customs and Border Protection: "Two of the most frequently misunderstood areas in the classification of wearing apparel under the Harmonized Tariff Schedule of the United States (HTSUS) are the coated and the water resistant provisions."

Harmonized System Heading 6210 provides for "Garments made up of fabrics of heading 5602, 5603, 5903, 5906 or 5907." In the Harmonized Tariff Schedule of the United States ("HTSUS") garments classified under 6210 are generally assessed a lower rate of duty than would be the case were the garment not made of one of those fabrics.

On October 19, 2015, CBP ruled (NY N269125) that in the case of a woman's mid-thigh length coat constructed of 68% polyester, 19% rayon, 7% cotton, 5% nylon and 1% wool woven fabric with a visible coating on the inner surface the applicable subheading for will be 6210.30.5000 HTSUS which provides for "Garments, made up of fabrics of heading 5602, 5603, 5903, 5906 or 5907: Other garments, of the type described in subheadings 6202.11 to 6202.19: Of man-made fibers: Other." The rate of duty will be 7.1 percent ad valorem. Had the fabric not been coated the classification would likely have been 6202.13.40 HTSUS, "Women's or girls' overcoats, carcoats, capes, cloaks, and similar coats; Of man-made fiber; Other; Other. The rate of duty for 602.13.40 is 27.7%

In this case the ruling was requested by the law firm Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP. They did not disclose the name of the client who will be the importer.

Agathon Associates has been called on frequently to assist clients with the proper tariff classification of coated fabrics and articles made of coated fabrics and has prepared with summary of the Harmonized Tariff Schedule of the United States provisions relating to coated textiles. This information is available to clients of Agathon Associates, subscribers to Agathon Associates' Trade Advisor Service, and students in David Trumbull's TMD 433 course at the University of Rhode Island. You will need to enter your username and password. If you do not know your username and password email David Trumbull at david@agathonassociates.com.

Now You Can Remember Fido by Wearing Him

A Quebec company, Yarns of Memories, will take your pet dog's hair and spin it into yarn. Depending on the quantity of hair supplied, you can choose to transform the yarn into several articles such as a shawl, scarf, and mittens, or keep the yarn to knit an article yourself to memorialize the animal. They call the yarn "chiengora" from "chien," the French word for dog, and angora, a breed of rabbit known for its soft fur.

Agathon Associates became aware of chiengora when recently (July 22, 2015) U.S. Customs and Border Protection issued Yarns of Memories a Binding Ruling (N265990) establishing that the that the applicable subheading for the "chiengora" yarn will be 5110.00.0000, Harmonized Tariff Schedule of the Unites States ("HTSUS") which provides for yarn of coarse animal hair or horsehair (including gimped horsehair yarn) whether or not put up for retail sale. The duty rate will be free.

Yarns of Memories also stated that the "chiengora" might be mixed with alpaca or wool, which would change the classification.

23 Years Later, Customs Reverses Itself, Zeros Out Duty on "Abrasive-Coated" "Non-Scratch" Non-Woven

In my latest column in the BeaverLake6 Report I report on a proposal by U.S. Customs to revoke a Binding Ruling Letter from two decades ago with a resulting change of tariff classification of a non-woven that lowers the rate of duty from 16% to zero.

Customs Reclassifies Boot, Tariff Increases from 4.6% to 37.5%

At issue was whether the boots are classified in subheading 6401.92.60, Harmonized Tariff Schedule of the United States ("HTSUS"), as waterproof footwear having soles and uppers with an external surface area of over 90% polyvinyl chloride, with rate of duty of 4.6%, or, as other waterproof footwear of subheading 6401.92.90, HTSUS, with rate of duty of 37.5%.

Read the decision at Customs Bulletin Vol. 48 No. 38 (beginning on page 24)

Customs Rules on Classification of Flocked Open-Work Warp Knit Fabric

In a letter dated September 4, 2014, U.S. Customs and Border Protection ruled (NY N245406) that a flocked polyester/nylon open-work warp knit fabric, from Mexico, characterized by a pattern of dots, ranging in size from approximately ¼ to ¾ inches, printed onto the knit fabric using flock fibers, is classified at 6005.34.0010, HTSUS, with a rate of duty of 10%. For more on tariff classification of flocked and flocked articles, see the Agathon Associates report at http://www.agathonassociates.com/textile-pri/flock/classification.htm.

Customs Ruling Shows Complexity of Tariff Classification for Upholstery

On June 27, 2014, U.S. Customs and Border Protection ("CBP") ruled that an upholstery fabric, imported from Italy by Rogers & Goffigon LLC, described as twill weave combed 100% alpaca wool fabric, weighing 431.5 g/m2, had not been demonstrated to meet the CBP criteria for uphostery and was, therefore, properly classified at 5112.19.9530 Harmonized Tariff Schedule of the United States ("HTSUS"), with a rate of duty of 25 percent. Had it been classified, per the importer's desire, as upholstery at 5112.19.2000 HTSUS the rate of duty would have been 7 percent.

Clients of Agathon Associates and subscribers to Agathon Associates' Trade Advisor Service can learn more about CBP's 8-point criteria for upholstery classification at www.agathonassociates.com/textile-pri/upholstery/cbp.htm. You will need to enter your username and password. If you do not know your username and password email David Trumbull at david@agathonassociates.com.

Importer Sues Customs, Claims Rate of Duty Is Too Low!

"The court remains unaware of any other suit brought against the government on the claim that the plaintiff or its property should be assessed a higher rate of tax or duty," wrote R. Kenton Musgrave, Senior Judge, U.S. Court of International Trade in the an opinion (Slip Op. 14-22 Best Key Textiles Co., Ltd., Plaintiff, v. Unites States, Defendant), dated February 25, 2014.

Plaintiff Best Key Textiles argued that U.S. Customs and Border Protection acted in an arbitrary and capricious manner when it revoked a Binding Ruling Letter relating to a certain yarn which had been requested by Best Key Textiles. The original New York Ruling Letter (NY N1876001) dated October 25, 2011, stated that a yarn, produced from polyester chips melted into a slurry to which aluminum or zinc powder and titanium dioxide is added, and subsequently "fired" through a spinneret to create yarn, is properly classified under heading 5605 as "metalized" yarn dutiable at 13.2%. The Headquarters Ruling Letter (HQ H202560) dated September 17, 2013, revoked the 2011 letter and stated that the yarn is properly classified as a polyester yarn dutiable at 8%. The court denied plaintiff's motion (CLICK HERE FOR RULING.

So, why would Best Key Textiles go to court (in fact, this is not their first attempt at overturning the Customs revocation in court) to obtain a classification that results in a higher rate of duty? The answer lies in the complexity of the tens of thousand of tariff classification and how the classification of a component of an article can affect the classification of the article itself. In this case, Best Key Textiles' interest appears to lie not in the classification of the yarn, but, rather, in the classification of imported garments made from the yarn. HQ H202560 stands and the yarn is classified as polyester, making imported garments made of that yarn dutiable at rates as high as 32%. Had Best Key Textiles succeeded in overturning that revocation, thus restoring the earlier ruling that the yarn is classified as "metalized" yarn, imported garments made of that yarn would be dutiable at rates around 6%.

Deadline for Petitions Requesting HTS Statistical Category Changes is April 1, 2014

April 1, 2014, is the deadline for submitting petitions to create or modify the statistical categories of the Harmonized Tariff Schedule of the United States (HTS) or Schedule B for exports.

The United States International Trade Commission's ("USITC") Director of Tariff Affairs and Trade Agreements chairs the Committee for Statistical Annotation of the Tariff Schedules (known informally as the "484(f) Committee"), which also includes representatives of U.S. Customs and Border Protection and the Census Bureau. The committee analyzes and evaluates petitions requesting changes in the non-legal statistical reporting categories of the HTS (for imports) and Schedule B (for exports). Such changes are made to improve data collection information.

The process for submitting petitions for these changes is outlined in the Preface of the HTS (posted on the USITC web site at http://www.usitc.gov/publications/docs/tata/hts/bychapter/1400_Preface.pdf).

Interested parties or their representatives may request changes to the statistical annotations of the HTS or Schedule B for exports. Such requests may be made under Section 484(f) of the Tariff Act of 1930 as amended and directed to the Committee for Statistical Annotation of the Tariff Schedules. Such requests should indicate precisely the nature of each desired change. They should provide the exact proposed language to be inserted or deleted (including any relevant units of quantity) and give detailed reasons for the requests. Confidential business information should not be submitted to the Committee. For requests relating to the HTS, the requester should provide the names of importers and foreign manufacturers (when known) that are associated with the articles in question and should indicate the countries from which the articles are being imported. A proposed statistical category under which three or fewer importers or exporters would likely report shipments generally will not be approved, in order to avoid the disclosure of confidential business information.

The Amusing Diversion of Overturning a Custom's Classification

Recently at the United States International Court of Trade, Judge Richard W. Goldberg, ruled in favor of Springs Creative Products Group ("SCPG") and against the United States, in the question of the correct tariff classification of a Make-It-Yourself Fleece Throw Kit. Plaintiff SCPG challenged the United States Bureau of Customs and Border Protection's ("Customs" or "CBP") classification of its Make-it-Yourself Fleece Throw Kits under Subheading 6001.22.00 of the Harmonized Tariff Schedule of the United States ("HTSUS"), 19 U.S.C. § 1202 (2006). The evidence at trial supported a conclusion that the subject merchandise is properly classified under HTSUS 9503.00.00. Based upon the Findings of Fact and Conclusions of Law, the court entered final judgment in favor of SCPG.

At issue was whether the throw was a durable and useful article of textile (properly classified under Subheading 6001.22.00, with rate of duty of 17.2%) or a toy intended for pleasurable diversion (properly classified under Subheading 9503.00.00, with rate of duty of zero). The judge wrote that: "Although the completed throw is durable and of high quality, the court finds that the principal reason that the ultimate purchaser would purchase and use the throw kit is for the amusement and diversion of assembling the throw."

Judge Goldberg's opinion may be read on the CPB website by clicking here, starting at page 131.

If the Shoe Fits, It's a Shoe

Recently, in the United States Court of International Trade, Plaintiff Alpinestars S.p.A. ("Alpinestars") challenged the decision of Defendant U.S. Customs and Border Protection ("Customs") denying Alpinestars' Protest of Customs' classification of the imported Tech 8 motocross boot within the Harmonized Tariff Schedule of the United States ("HTSUS"). Customs classified the merchandise as

"Other footwear with outer soles and uppers of rubber or plastics: Other footwear: Covering the ankle: Other: Other: Other: Valued over $12/pair" under subheading 6402.91.90, HTSUS, which carries a 20% duty rate.

Plaintiff claimed that the merchandise is properly classified as

"Articles and equipment for general physical exercise, gymnastics, athletics, other sports (including table-tennis) or outdoor games, not specified or included elsewhere in this chapter; swimming pools and wading pools; parts and accessories thereof: Other: Other: Other" under subheading 9506.99.60 of the HTSUS, which carries a 4% duty rate.

Alternatively, Plaintiff argued that the subject merchandise is classifiable as

"Footwear with outer soles of rubber, plastics, leather or composition leather and uppers of leather: Other footwear: Covering the ankle: For men, youths and boys” under HTSUS subheading 6403.91.60 with a 8.5% duty rate, or as "Other footwear with outer soles and suppers of rubber or plastics: Sports footwear: Other: Other: Valued over $12/pair," under subheading 6402.19.90, HTSUS, dutiable at 9%.

The Court, following earlier court decisions that established that "sports equipment is defined as non-apparel-like merchandise that is necessary, useful, or appropriate for a sport, and if the merchandise is worn by a user, those articles are almost exclusively protective in nature and would complement, or be worn in addition to, apparel worn for a particular sport," found that--

"the Tech 8 boot is not worn to complement or be worn in addition to other apparel" and that "Clothing and footwear are the two essential items that people wear, regardless of whether one is dressing for a sport. The Tech 8 boot is exactly that, a boot. It is simply footwear and not an item used to enhance, i.e., "complement or be in addition" to apparel. Therefore, it is not sports equipment under Heading 9506.

Having determined that the Tech 8 is not classifiable under Heading 9506, the court turned to whether it is properly classifiable under footwear headings, 6403 or 6402. For that discussion and finding, read Judge Leo M. Gordon's opinion on the U.S. Customs and Border Protection website by clicking here beginning on page 71.

Two Recent Customs Rulings Relating to Textile Flock and Dust

In a letter to Hanesbrands of Winston-Salem, N.C., dated June 28, 2013, U.S. Customs and Border Protection ("CBP") ruled (Binding Ruling N243396) that a flock heat transfer is classifiable at 5601.30.0000, Harmonized Tariff Schedule of the United States ("HTSUS"), which provides for textile flock. In this case the the heat transfers consist of rayon flocking on carrier paper, with an adhesive in the design of a logo. The logo design will be heat-transferred to finished garments. The heat transfers measure 26mm x 26mm. The logo is produced by creating the image on a film or screen, then printing the image onto flocked sheeting. Then the adhesive is applied on the back of the sheet. In the heat transferring, both the paper and the adhesive are consumed, leaving only the textile flocked logo.

In another letter, to Carlisle Food Service Products of Oklahoma City, Oklahoma, dated June 26, 2013, CBP ruled (Binding Ruling N242799) that a finely ground textile dust used as absorbent for industrial spills is classifiable at 5601.30.0000, HTSUS. The submitted sample is a product called SpillEater™ in its retail packaging, which is similar to a half-gallon milk container and contains two pounds (.91 kg) of the finely ground powder. It is described as a natural spill absorbent for industrial spills such as oils, turpentine, certain acids, and the like. The material safety data sheet states that it is “96% USDA Certified Bio Based Agricultural Plant Fiber and 4% Natural Crop Field Earth Ground to Specified Mesh.” In a telephone conversation Carlisle Food Service Products confirmed to CBP that the plant fiber is cotton fibers, not stem or stalk.

In both cases the textile product is question will be duty-free.

Customs Reverses Ruling, Agrees that Coating on Fabric is Visible to the Naked Eye

Tariff classification under Harmonized Tariff Schedule of the United States ("HTSUS") Heading 5903, "Textile fabrics impregnated, coated, covered or laminated with plastics," has been one of the most vexing issues for many in the textile industry. Legal Notes 2(a)(1) and 5(a) in HTSUS Chapter 59 state that for fabrics to be considered visibly coated, the coating must be visible to the naked eye other than by change of color. U.S. Customs and Border Protection ("CBP") has ruled that the criterion for visibility is satisfied by any one of the following:

• A change in the surface character of the fabric (HQ 082219, November 11, 1988)

• The coating fills the interstices where the yarns intersect (HQ 961172, August 6, 1998)

• The coating blurs or obscures the weave (HQ 089772, September 11, 1991)

No account should be taken of any resulting change in only shine, reflectivity, dullness or other property which causes the viewer to see the effect rather than presence of plastic material. See HQ 967884, dated October 26, 2005.

The question of whether a fabric is properly classified in Chapter 59 or elsewhere in the tariff schedule is particularly significant in the case of apparel or textile products imported from a free trade partner as, in many cases, the rule of origin for the finished product is "cut-and-sew" in the case of apparel or textile products made of coated fabric and yarn-forward for good made of most other fabrics.

In a recent CBP Bulletin (Vol. 47, June 26, 2013, No.27) CBP announced the modification of a ruling letter relating to a particular type of garment made in Canada.

In Binding Ruling NY N068477, dated August 6, 2009, CBP determined that, with regard to a certain Tactical Operations Dry Suit, the plastic coating of the outer shell fabric of the garment is not visible to the naked eye in cross section. CBP further determined that this product was classified in heading 6211, HTSUS, specifically 6211.43.0010, HTSUS, which provides for: "Track suits, ski-suits and swimwear; other garments: Other garments, women's or girls': Of man-made fibers". Finally, CBP determined that this product did not satisfy the requirements of General Note (GN) 12, HTSUS, and was therefore ineligible for treatment under the North American Free Trade Agreement (NAFTA).

It is now CBP's position that this product is properly classified in heading 6210, HTSUS, specifically 6210.50.50, HTSUS, which provides for "Garments, made up of fabrics of heading 5602, 5603, 5903, 5906 or 5907: Other women's or girls' garments: Of man-made fibers: Other". Furthermore, it is now CBP’s position that the product does satisfy the requirements of GN 12, HTSUS, and is therefore eligible for treatment under NAFTA.

The outer shell of the garment is composed of a laminated fabric consisting of a top layer of nylon woven fabric, a middle layer of ePTFE, and a bottom layer of polyester knit fabric. The importer asserted that, because this outer shell fabric is properly classified under heading 5903, HTSUS, as a coated fabric that the instant product is properly classified under heading 6210, HTSUS, which provides, in pertinent part for "Garments, made up of fabrics of heading … 5903 …". However, in NY N068477, CBP stated that this outer shell fabric was excluded from heading 5903, HTSUS, by Note 2(a)(1) to Chapter 59, HTSUS, because the plastic could not be seen with the naked eye. CBP also found that the outer shell fabric was properly classified under heading 5407, HTSUS, which provides for "Woven fabrics of synthetic filament yarn …". When reviewing fabrics assembled in layers under Note 2(a)(1) to Chapter 59, HTSUS, CBP examines the fabrics to ascertain whether the plastics layer is visible in the cross-section to the naked eye. See HQ H005538, dated November 30, 2007; HQ W968304, dated December 1, 2006; NY M82475, dated August 29, 2006; NY L80809, dated December 28, 2004. Additionally, CBP examines whether the plastics layer is visible through one of the assembled layers of fabric. In situations where one of the fabrics is of a loosely knitted or woven construction that allows the coating to be seen through that layer of fabric, CBP has considered such coating to be "visible to the naked eye." See HQ H005538; NY L89462, dated January 13, 2006; NY K87940, dated July 23, 2004 (both in which CBP found plastic film to be visible through a knit layer). Upon further review of the samples submitted on February 8, 2011, CBP has determined that the ePTFE plastic layer is visible to the naked eye through the knit polyester layer. Therefore, because the outer shell fabric is a plastic laminated textile fabric, in which the plastic layer is visible to the naked eye, it is properly classified under heading 5903, HTSUS. See also EN to heading 59.03; HQ H005538. Furthermore, in accordance with T.D. 91–97 and GRI 3(b), the garment is properly classified under heading 6210, HTSUS, which provides for "Garments, made up of fabrics of heading … 5903 …", because its outer shell is classifiable under heading 5903, HTSUS. See also HQ H042543; HQ 080817.

The relevant NAFTA rule states that a good shall be originating if there is "A change to headings 6208 through 6210 from any other chapter, except from headings 5106 through 5113, 5204 through 5212, 5307 through 5308 or 5310 through 5311, chapter 54, or headings 5508 through 5516, 5801 through 5802 or 6001 through 6006, provided that the good is both cut and sewn or otherwise assembled in the territory of one or more of the NAFTA parties.

As discussed above, this product is properly classified in heading 6210, HTSUS, and its outer shell fabric is properly classified under heading 5903. Therefore, the requirements of GN 12(t)/62.32C, HTSUS, are satisfied, because the component which determines the tariff classification of the good (the outer shell fabric) shifts from heading 5903, HTSUS, to heading 6210, HTSUS. See also GN 12(t)/62, Chapter Rule 3, HTSUS. The Style MSD577vSR product satisfies the requirements of GN 12(t), HTSUS. As such, it also satisfies the requirements of GN 12(b)(ii)(A), HTSUS, and is deemed to be NAFTA originating.

To see the complete text of CBP's modification of the ruling click here, the modification begins on page 50 and continues to the end of the document on page 62.