Timeframe for Proclamation on Certain Rubber-Soled Footwear Uncertain
Government sources state that the timeframe for implementing the Proclamation to create a new HTS Chapter 64 note and at the same time adjust the duty rates for certain affected rubber- or plastic-soled footwear is uncertain. This affected footwear has an added textile layer, and is referred to as “textile bottomed footwear.”
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Proclamation Is “in Process”
Sources state that the Proclamation is “in process,” which includes Justice Department review and then sending it to the White House. Once at the White House, it can be difficult to predict when the President will actually sign it.
After it is signed, statute requires that there be a delayed effective date of at least 30 days after Federal Register publication.1 Government sources also note that for the convenience of U.S. Customs and Border Protection, Harmonized Tariff Schedule (HTS) changes are best implemented on the “first day of the month.”
(For example, if these footwear changes were to take effect on September 1, the Proclamation would have to be published in the Federal Register no fewer than 30 days earlier, by approximately August 2.)
Will Create a New Additional Note 5 to Chapter 64 (Footwear)
The International Trade Commission has previously indicated that the Proclamation will create a new Additional Note 5 to Chapter 64 to state that textile materials (e.g. textile layers) that do not possess the characteristics usually required for normal use of an outer sole (e.g. durability, strength, etc.) should not be taken into account for classification purposes when added to the outer sole.
(According to the ITC, this new note will require textiles in footwear outer soles to be disregarded if not durable, and is necessary due to certain World Customs Organization (WCO) Classification Opinions, and to provide a better basis for applying Note 4(b) to Chapter 64.)
New HTS Nos Needed so Rates Won’t Rise for “Textile Bottomed Footwear”
Additional HTS numbers will also be added to Chapter 64 by the Proclamation, so that the existing duty rates for the affected textile bottomed footwear is preserved once their classification changes from HTS 6405 to HTS 6402 or 6404 under the new Additional Note.
The new tariff numbers will maintain “the current lower duty rate” and will try to ensure that the new Additional Note is revenue neutral (i.e., does not change the duty rate of the affected textile bottomed footwear).2
1P.L. 109-432 amended 19 USC 3006(c) so that modifications to the HTS proclaimed by the President, based on periodic recommendations by the ITC to conform the HTS to WCO recommendations, etc., may not take effect before the 30th day after the date on which the text of the proclamation is published in the Federal Register.
2If these additional tariff numbers are not created, the new Additional Note would move affected textile bottomed footwear to existing HTS 6404 and 6402 tariff numbers that have duty rates ranging from 48% to 90 cents/pair + 37.5%, from their current classification in HTS 6405 (at 7.5% or 12.5% duty rates).
(See ITT’s Online Archives or 03/28/11 news, 11032810, for most recent BP summary, which also lists the proposed new tariff numbers (at that time there were 21 new numbers proposed.)
See ITT’s Online Archives or the 03/25/11 and 03/04/11 news, 11032508 and 11030436 respectively, for other recent BP summaries on the ITC’s reports on these pending changes.)