CBP Moving too Slowly on Textile-Bottomed Footwear Guidance, Say Trade Associations

CBP has moved too slowly in providing guidance on changes to textile-bottomed footwear classification in the Harmonized Tariff Schedule (HTS) from last year, a group of footwear trade associations said in a Oct. 26 letter to CBP Deputy Commissioner David Aguilar. The trade associations are American Apparel & Footwear Association, the Footwear Distributors and Retailers of America, Outdoor Industry Association and Rubber & Plastics Footwear Manufacturers Association.

The complaint was over the lack of guidance on Additional U.S. Note 5 to Chapter 64 ,which requires textile materials that don't have the characteristics usually required for normal use of an outer sole, including durability and strength, to be disregarded when determining the constituent material for classification purposes. "We are now at almost 11 months after the inclusion of Additional U.S. Note 5 to Chapter 64 and the industry has still not received any guidance from CBP," the groups said. "In the interim, CBP has refused to rule on countless classification requests regarding Additional U.S. Note 5. The delay is puzzling since we understand that CBP was responsible for the original drafting of Additional U.S. Note 5." CBP didn't immediately respond to a request for comment.

Proclamation Added Note to Chapter 64 on Dec 3

Additional Note 5 was added to Chapter 64 of the HTS by Proclamation 8742, and was effective for goods as of Dec. 3, 2011. The Proclamation also added 21 new tariff numbers in HTS 6402 and HTS 6404 in order to provide the low HTS 6405 duty rates for footwear which are now classified in HTS 6402 and HTS 6404 (instead of HTS 6405) due to Additional Note 5. In January, CBP requested comment on interpretation and the use of laboratory testing to ascertain whether the textile material on the outer sole possesses the characteristics usually required for normal use of the outer sole.

(See ITT's Online Archives 11110303 for summary of Proclamation 8742. See ITT's Online Archives 12012601 for summary of CBP's request for comments on lab testing.)

The agency's inaction has hurt the footwear industry, the associations said. "The net result is an industry in a state of flux regarding what has constituted a significant part of the trade," they said. Because guidance has not yet been issued by CBP, we are concerned that there is little or no consistency in the way that importers are classifying the goods subject to Note 5, or in the way that CBP officials are reviewing and classifying the imported items for tariff purposes. This causes both potential liabilities of unknown amounts to importers, as well as confusion to both importers and domestic producers regarding the appropriate approach."

The groups pushed CBP to announce a final guidance during the CBP East Coast Trade Symposium, which was eventually postponed due to Hurricane Sandy.