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CLASSIFICATION OF THE MONTH: CLOG
The Court of International Trade addressed the classification of a child's clog in LF USA, Inc. v United States, Slip Op. 17-172 (December 22, 2017) The importer argued for classification in HTS subheading 6401.99.80 (Free). Customs and Border Protection ("CBP") had classified the clog in subheading 6402.99.31 (6%). 
            
The CIT decided in favor of CBP. The court held that in order to be classified in the heading 6401 a shoe must be waterproof. The importer had argued that the "waterproof" requirement actually referred to the method of construction. This was based in part on the fact that heading 6401 includes provisions for footwear that does not provide protection against water. The somewhat broad brush of the decision may jeopardize the classification of open-heeled garden clogs in subheading 6401.99.80.
 
Further, the decision states incorrectly that footwear falling in heading 6401 "is composed of single piece construction". This statement, if adopted by CBP, would exclude vulcanized and cemented footwear from the heading.
 
The clog has a heel strap attached by two plastic rivets. The court does not directly address the question of whether the use of the rivets to attach the heel strap disqualifies the clog from classification in heading 6401, which does not include footwear where the upper is assembled by stitching, riveting, screwing, plugging or similar processes. The importer had argued that the strap was not an essential part of the upper and that therefore the rivets did not serve to assemble the upper
 
´╗┐McGuireWoods LLC represents the importer in this litigation. The real party in interest is a charity that provides footwear, clothing and other vital goods to families in need.
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CLASSIFICATION DECISIONS
The following is a brief summary of recent classification rulings. NY N291666 (November 22, 2017) rules on the classification of a men's closed toe/closed heal, above-the-ankle pull-up footwear. The shoe has an outer sole of R/P and a majority textile upper. The shoe, which is described as sock-style, has a pull-tab at the back.
 
Classification is said to fall in subheading 6404.19.30. This appears to be a typographical error. That provision is limited to footwear that is less than 10 percent by weight of R/P and the ruling specifically states that R/P makes up more than 10 percent of the weight of the shoe. The correct classification appears to be subheading 6404.19.39. Both provisions carry a duty of 12.5%.
 
The subject of NY N291389 (November 15, 2017) is the "DresSports 2 Fast", described as a men's closed toe/closed heal, below-the-ankle casual shoe. The shoe has a textile upper, a R/P treaded outer sole, a heel counter, a foxing-like band, and a first cost in excess of $12. The ruling finds classification in subheading 6404.19.90 (9%). There was no discussion of why the shoe was deemed non-athletic despite the presence of such athletic features as a treaded sole, heel counter and a foxing-like band.

The shoe whose classification is covered in NY N292027 (December 5, 2017) is described as a slip-on "sneaker" for women. The shoe has a textile upper and R/P out sole. The shoe has laces in the front and a nylon pull-tab at the back. It is said to have the appearance of a sock with laces. CBP classified the shoe in subheading 6404.19.39 (37.5%).
 
The importer argued that the footwear had functional laces. CBP disagreed indicating that although the laces may be tightened to improve fit, the shoe need only be slipped on or off. If CBP had agreed that the shoe was not a slip on, classification would have fallen to 6404.99.90 (9%), as the first cost exceeded $12.
SAMPLES
The methods of disposing articles entered duty free at samples under subheading 9811.00.60 are restricted. They may be exported or destroyed but not sold in this country. In addition, samples may be donated to a charity. The charity is allowed to sell the samples to raise money or to donate them to the needy.
 
This is set out in HQ 563524 (September 13, 2006) , which provides a comprehensive review of rulings on the treatment of samples.

GSP
The Generalized System Preferences ("GSP") expired as of midnight, December 31, 2017. Goods entered, or withdrawn from warehouse, for consumption after that date are not eligible for GSP.
 
While we have no specific information, the likelihood is it that it will be extended retroactively sometime during the year. In the meantime, CBP recommends that importers continue to flag GSP-eligible products with the "A" indicator but paying duties. In the event that GSP is renewed retroactively, CBP is developing a program to provide for batch processing of refunds on all importations with the "A" indicator.
DRAWBACK
Effective February 24, 2018, CBP will transition to a new drawback regime.
 
The drawback laws allow substitution of domestic for imported merchandise or imports from one entry for merchandise from another entry. One of the major changes is that substitution, whether for manufacturing or unused merchandise drawback, will become somewhat easier. Substitution will be based on an eight-digit subheading rather than the subjective principle of "commercial interchangeability". Footwear classified in the same eight-digit subheading may be substituted regardless of size, gender, color, etc. There are limitations where the eight-digit subheading begins with "other". In some cases, the claimant will be able to use the Schedule B subheading, even if it covers more than one HTS eight-digit subheading, as the basis for substitution.
 
Another change was to extend the drawback period. Drawback may be claimed on merchandise exported within five years of importation, rather than three.
 
The legislation that enacted these changes called for a delay of two years to allow CBP to create the ability to file claims within ACE. As of the effective date, claimants will be able to take advantage of the expanded timeframe (five instead of three years). This appears to mean that claims covering merchandise imported as long ago as February 24, 2013 maybe the subject of drawback claims.
 
Note that CBP has not issued very much in the way of explanation in this area and some of the above may have to be revised.
CPSC DEVELOPMENTS

There was one recall of a footwear product in December. A work boot advertised as puncture-resistant, but not manufactured with a puncture-resistant plate, was recalled as it posed an injury hazard to users. More information on the boots and the recall can be found here .
The Customs Report is a newsletter of customs legal, administrative and other developments affecting importers of footwear prepared by McGuireWoods, LLP, 1345 Avenue of the Americas, New York, New York 10105, (212) 548-7020, as a service for FDRA members and other interested parties. Matters reported on or summarized herein may not be construed as legal advice on specific situations .

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