March 4 CBP Bulletin Proposes to Modify Rulings on Section 301 Origin, Footwear Classification
In the March 4 Customs Bulletin (Vol. 54, No. 8), CBP published notices that propose to modify rulings and similar treatment for country of origin under Section 301 tariffs and for footwear.
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Comments on Proposals Due April 3
CBP said consideration will be given to any written comments received by April 3 before taking this action. In addition, any party that has received a ruling or decision on the merchandise that is subject to the proposed revocations or modifications, or any party involved with a substantially identical transaction, should advise CBP by the date that written comments on the proposed ruling are due. (An importer's failure to advise CBP of such rulings, decisions or substantially identical transactions may raise issues of reasonable care on the part of the importer or its agents for importations subsequent to the effective date of the final decision in this notice.)
Proposals
CBP is proposing to revoke or modify the rulings below, and any rulings on these products that may exist but have not been specifically identified. CBP is also proposing to revoke any treatment it has previously accorded to substantially identical transactions.
Section 301 Rules of Origin
| Item: Computer server cabinets. Six vertical posts, a base subassembly and a top subassembly of Chinese origin are welded together in Mexico to form the main computer server frame. In Mexico, the frame and welds are further polished, cleaned, painted, inspected and additional assembly of Chinese component parts (side panels, castors, patch panels, clips, a busbar, and brackets) is performed by skilled technicians. The cabinet will then be imported into the United States. |
| Current: The goods are products of Mexico under a tariff shift rule in the NAFTA rules of origin, eligible for NAFTA preferential treatment and not subject to the Section 301 tariffs. |
| Proposed: The processing in Mexico isn't a substantial transformation and the cabinets are of Chinese origin. As a result, the goods are subject to Section 301 tariffs. |
| Reason: Goods potentially subject to trade remedies must undergo a substantial transformation analysis. The assembly process in this scenario is "simple assembly and is not enough to effect a substantial transformation," CBP said. "All the parts that are imported into Mexico are in a prefabricated form with a predetermined use." |
| Proposed for modification: NY N303338 (2019) |
| Proposed new ruling: HQ H305371 |
Footwear
| Item: Closed toe, closed heel, slip-on shoes that do cover the ankle. The one-piece molded shoe has an upper and outer sole made from 100% thermoplastic and includes small vent holes. |
| Current:6401.99.8000, Free, “Waterproof footwear with outer soles and uppers of rubber or plastics, the uppers of which are neither fixed to the sole nor assembled by stitching, riveting, nailing, screwing, plugging or similar processes; which does not cover the ankle or knee; which is not designed to be worn over, or in lieu of, other footwear as a protection against water, oil, grease or chemicals, or cold or inclement weather; in which the upper’s external surface area is over 90% rubber or plastics (including any accessories or reinforcements); and which does not have a foxing-like band applied or molded at the sole and overlapping the upper.” 6402.99.3171, 6%, "Footwear with outer soles and uppers of rubber or plastics: other footwear: other: other: having uppers of which over 90% of the external surface area (including accessories or reinforcements) is rubber or plastics; not having a foxing or a foxing-like band and not protective against water, oil, grease or chemicals or cold or inclement weather; other: other: other: other." |
| Proposed: 6402.99.27, 3%, “Other footwear with outer soles and uppers of rubber or plastics: Other footwear: Other: Other: Having uppers of which over 90 percent of the external surface area (including any accessories or reinforcements such as those mentioned in note 4(a) to this chapter) is rubber or plastics (except footwear having a foxing or a foxing-like band applied or molded at the sole and overlapping the upper and except footwear designed to be worn over, or in lieu of, other footwear as a protection against water, oil, grease or chemicals or cold or inclement weather): Other: Sandals and similar footwear of plastics, produced in one piece by molding.” |
| Reason: The footwear items are made of "100 percent plastics, do not cover the ankle, and are produced in one piece by molding," CBP said. "Although these footwear styles are not sandals because they do not have an open-toe, an open-heel, or an outer sole held to the foot with straps, upon review we find that these footwear styles constitute similar footwear of plastics. Moreover, because they are also made of plastics and produced in one piece by molding, we find that they are specifically covered by 6402.99.27." |
| Proposed for revocation: NY N267221 (2015) |
| Proposed for modification: NY N266867 (2015) |
| Proposed new ruling: HQ H298312 |