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ITC Begins Review of HTS Breakouts for Footwear with Textile Materials Added to Outer Soles of Rubber or Plastic
(Prepared by John Pellegrini, McGuireWoods LLP)
The International Trade Commission ("ITC") has announced that it will conduct an investigation under 19 U.S.C. § 3005 concerning the administration of Note 4(b), Chapter 64, Harmonized Tariff Schedule of the United States ("HTS"). The investigation was requested by the Treasury Department which requested that the ITC recommend to the President the addition of a new US Note covering footwear with outer soles of rubber and/or plastic which a layer of textile material has been added. 19 U.S.C. § 3006 allows the President to proclaim changes in the HTS in limited circumstances. Legislation is not required.
The proposed note would provide: "For purposes of determining the constituent material of the outer sole pursuant to Note 4(b) to 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." If adopted, this note would eliminate the use of the fabric outsoles for purposes of qualifying for classification in heading 6405. However, Treasury also requests that there be a number of new provisions in heading 6402 and 6404 that would generally provide for the current heading 6405 duty rates (12.5% and 7.5%) for footwear that includes a layer described by the proposed. The following provisions would be subdivided to include a provision with this requirement and which would carry the lower duty rate. These are 6402.99.60, 6402.99.70, 6404.11.40, 6404.11.50, 6401.11.60, 6401.11.70, 6401.11.80, 6404.19.35, 6404.19.40, 6404.19.50, 6404.19.60, 6404.19.70 and 6404.19.80. With one exception, this schedule of subheading seems to include all those of interest. We would add subheading 6402.99.40.
There are no provisions for protective footwear and higher-priced athletic footwear. It is unlikely that a change covering these provisions could be adopted because of opposition by the domestic industry.
Comments on the proposal must be submitted by May 14, 2010. The ITC will post a proposed recommendation on May 28, 2010 and will accept comments on until June 25, 2010. The ITC expects to submit a recommendation to the President by July 12, 2010.