CBP Still Mulling Interpretation of New Additional Note for Footwear with Textile Outsoles
2012-3-1

  
  

As previously reported, President Obama issued a proclamation 3 November 2011 that implemented the USITC recommendations regarding the addition of an additional U.S. note and the amendment of certain classification provisions in Harmonised System Chapter 64 relating to certain footwear featuring outer soles of rubber or plastic to which a layer of textile material has been added. These changes reflect decisions of the World Customs Organisation’s Harmonised System Committee on the classification of that footwear.
U.S. Customs and Border Protection has held in a series of rulings issued over the past decade that footwear with textile materials that cover over 50 percent of the external surface area of the outer sole are classified as other footwear under heading 6405 and therefore face significantly lower duties than footwear with rubber soles. Effective 3 December 2011, this footwear is to be classified under one of several newly-created 8-digit breakouts within headings 6402 and 6404, which are the headings where the subject footwear would normally be classified if it did not have a textile outsole. This change is intended to be tariff neutral because footwear with textile outsoles will theoretically continue to face duty rates of 7.5 percent or 12.5 percent under the new 8-digit breakouts. Another positive aspect of this change, according to the American Apparel and Footwear Association, is that it will allow the use of all types of textile outsoles no matter how they are adhered to the outer sole of the shoe (including embedded, slapped on, and glued on outsoles).
However, the proclamation also creates an additional U.S. note (Additional U.S. Note 5) that states that:
“For the purposes of determining the constituent material of the outer sole pursuant to Note 4(b) of this Chapter, no account shall be taken of textile materials which do not possess the characteristics usually required for normal use of an outer sole, including durability and strength.”
CBP is currently in the process of determining the scope of this additional U.S. note and recently sought comments from interested parties on the interpretation of the phrase “characteristics usually required for normal use of an outer sole, including durability and strength.” Among other things, comments may address how CBP should determine whether such characteristics are possessed by imported footwear.
CBP believes that the new note “stands for the proposition that textile material that does not hold up to the wear of a shoe should be disregarded for the purposes of ascertaining the constituent material of the outer sole.” To apply this general standard to imported footwear, CBP is considering whether to subject relevant footwear to laboratory testing to ascertain whether the textile material on the outer sole possesses the characteristics usually required for normal use of the outer sole. Accordingly, CBP is requesting comments on whether laboratory testing would be useful or necessary to administer Additional U.S. Note 5. If lab testing is utilised, CBP requests comments on the appropriate test and how to apply it to imported footwear. In the absence of lab testing, CBP requests comments on the scope of the note.