WEBVTT

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>> 00:00:00.000 --> 00:00:10.830

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>> OK Hello everybody,
it's 130 good afternoon.

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I'm Stacy Calkins,
the NIS 247 for the footwear shoe lady.

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>> 00:00:12.040 --> 00:00:20.640

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>> I could be reached
via email at Stacy Dot,

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Calkins at CBP dot DHS dot Gov.

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>> 00:00:21.420 --> 00:00:25.910

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>> I'll probably tell you
that email address later on

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in the presentation also.

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>> 00:00:27.140 -->
00:00:28.210 >> OK.

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>> 00:00:32.480 --> 00:00:37.980

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>> Today I'll talk to you about
some current footwear issues.

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We're seeing lately.

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>> 00:00:38.930 --> 00:00:42.300

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>> Uh some of them are ongoing
some of them are brand new.

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>> 00:00:47.190 --> 00:00:50.660

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>> At first I have to show you
a couple of required slides.

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>> 00:01:05.810 --> 00:01:10.740

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>> And that cute little footwear is
shoes, I hope you guys understood that.

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>> 00:01:12.230 -->
00:01:13.050 >> Alright.

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>> 00:01:36.790 --> 00:01:39.550

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>> The first topic will
be the footwear coverings.

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>> 00:01:41.900 --> 00:01:51.070

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>> And he how we have some
examples of them, they cover.

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Part of the leg and part of the shoes
or boots usually part of a costume.

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>> 00:01:53.930 --> 00:02:01.750

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>> And there have been many
rulings issued about costumes

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whether it be festive
costumes, or other costumes.

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>> 00:02:02.590 --> 00:02:17.160

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>> But most recently headquarters
ruling and 014873 from August

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that was changed as well as a
few others that were affected

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by the latest headquarters ruling.

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>> 00:02:18.150 --> 00:02:19.530

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>> I in >> 00:02:20.260
--> 00:02:23.360

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>> that ruling a well
made Santa Claus costume.

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>> 00:02:24.090 --> 00:02:35.500

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>> Consisted of age top a shirt pants
a hat beard wig and leather coverings

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and in that ruling.

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They referred to the leg
coverings as boot covers.

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>> 00:02:36.120 -->
00:02:37.500 >> Belt and gloves.

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>> 00:02:38.280 --> 00:02:45.410

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>> And CBP reviewed that
and found it to be an error

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regarding the tariff classification
of the leg coverings.

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>> 00:02:46.650 --> 00:02:54.740

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>> So that and 11 other rulings

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with substantially similar plastic
leg coverings was modified.

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>> 00:02:57.490 --> 00:03:06.250

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>> And H 249097 the decision
concerned only the leg coverings,

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not the other pieces of the costumes.

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>> 00:03:07.340 --> 00:03:10.550

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>> In the original ruling
on some of the ones that.

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>> 00:03:11.730 -->
00:03:12.310 >> Of this.

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>> 00:03:13.140 --> 00:03:30.210

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>> Excuse me let me start
over in the original ruling,

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the cellular plastic leg coverings
were classified in subheading 95 O 596,

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6000, which provided
for a festive carnival,

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or other entertainment articles.

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>> 00:03:31.270 --> 00:03:39.770

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>> The issue at this was whether
the leg coverings are classified

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as Gators leggings and
similar articles under.

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>> 00:03:40.390 --> 00:03:47.180

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>> Heading 6406 or as festive
articles under heading 9505.

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>> 00:03:51.010 --> 00:04:01.720

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>> Now to competing headings.

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We're looking at our 6406, which covers
parts of footwear, including uppers,

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whether or not attached to
soles other than outer soles.

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>> 00:04:02.620 --> 00:04:11.940

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>> A heel cushions removable insoles,
but it also includes Gators leggings

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and similar articles
and parts thereof.

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>> 00:04:13.170 --> 00:04:19.620

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>> The competing heading was
9505 for festive carnival,

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or other entertainment articles.

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>> 00:04:22.680 --> 00:04:29.950

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>> And the explanatory notes to
6406 provide for Gators leggings

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and similar articles
and parts thereof.

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>> 00:04:30.650 --> 00:04:36.940

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>> And these articles are designed
to cover the whole or part

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of the leg and in some
cases part of the foot.

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>> 00:04:37.790 --> 00:04:39.930

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>> Specifically, the ankle and instep.

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>> 00:04:40.580 --> 00:04:46.010

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>> They differ from socks and
stockings in that they do not cover

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the entire foot.

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>> 00:04:47.030 --> 00:04:55.010

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>> And they may be of any
material leather canvas

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felt knitted crocheted fabrics,
Etcetera, but not asbestos.

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>> 00:04:56.430 --> 00:05:05.970 >>

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They also include Gators,
legging spats putties mountain stockings

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without feet leg warmers,
and similar articles.

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>> 00:05:08.260 --> 00:05:14.210

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>> They can incorporate a strap or
Lastic Band, which fits under the arch

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of the foot.

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>> 00:05:15.240 --> 00:05:19.980

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>> And this heading also
covers identifiable parts

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of the above articles.

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>> 00:05:21.780 --> 00:05:29.510

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>> The explanatory notes for Chapter
95 provide for festive carnival,

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or other entertainment articles.

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>> 00:05:30.180 --> 00:05:35.030

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>> Which in view of their
intended use are generally made

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of non durable material?

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>> 00:05:35.960 --> 00:05:51.870

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>> They include articles of
Flint fancy dress masks full.

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Sears noses wigs false beards
and mustaches not being articles

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of pastiche heading
676404 and proper hats.

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>> 00:05:53.020 --> 00:05:56.170

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>> But it excludes fancy
dress of textile materials.

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>> 00:05:59.300 --> 00:06:03.280

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>> Now heading 6406 providing
for Gators and leggings.

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>> 00:06:03.920 --> 00:06:07.850

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>> The terms Gators and leggings
are not defined in the tariff.

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>> 00:06:08.700 --> 00:06:24.230

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>> But headquarters 088454 from
October of 91 defines the Gator

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as a leather or heavy cloth covering
for the legs, extending from the insect

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to the ankle or knee.

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>> 00:06:25.410 --> 00:06:35.000

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>> And from the dictionary,
we have a definition ankle high shoe

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with elastic sides,
and an overshoe with a cloth top.

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>> 00:17:34.220 --> 00:17:48.470

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>> So headquarters believes that both
of the above styles were suitable

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for athletic activity
they met the definition

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of tennis shoes basketball basketball
shoes gym shoes training shoes

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and the like.

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>> 00:17:49.570 --> 00:17:56.590

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>> And they provide that athletic
footwear does not have to be used

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for athletic games or purposes.

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>> 00:17:58.790 --> 00:18:02.740

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>> And the embroidery on the footwear
at issue in the above rulings.

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>> 00:18:04.200 --> 00:18:08.960

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>> Clearly, not be used at
all in a sporting activity.

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>> 00:18:10.530 --> 00:18:14.220

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>> And it features that would
preclude their use as athletic.

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>> 00:18:16.900 --> 00:18:27.220

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>> Headquarters also concluded the
Treasury decision definition requires

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the footwear to be such that it
could clearly not be used at all

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in sporting activity.

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>> 00:18:27.910 --> 00:18:33.550

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>> And that embroidery alone does not
preclude footwear from being classified.

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>> 00:18:34.210 --> 00:18:36.290
>> As Athletic footwear.

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>> 00:18:39.710 --> 00:18:47.140

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>> And it concluded that the footwear at
issue was classified under 64 O 41190.

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>> 00:18:47.940 --> 00:18:49.520
>> As Athletic footwear.

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>> 00:18:53.140 --> 00:18:59.970

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>> And here we have
another example these

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so these would no longer be precluded
just for the.

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>> 00:19:00.660 -->
00:19:02.650 >> Uh embroidery.

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>> 00:19:03.510 --> 00:19:10.400

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>> If it has all the features
of athletic footwear,

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it could now be classified
as athletic footwear.

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>> 00:19:12.780 --> 00:19:15.400

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>> You have any questions
on that section.

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>> 00:19:18.040 --> 00:19:22.460

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>> Now wait a few seconds see if
I see anything in the chat box.

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>> 00:19:40.880 --> 00:19:45.030

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>> Our next topic is
leather flocking issues.

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>> 00:19:46.270 --> 00:19:48.250

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>> Leather flocking hmm.

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>> 00:19:50.930 --> 00:20:04.830

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>> Why are there leather?

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Why is there leather flocking?

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Why is some footwear imported with
leather materials incorporated

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into the external surface area of
the outer soles that are in contact

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with the ground.

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>> 00:20:06.610 --> 00:20:17.320

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>> Well, because while ago
there was an additional US.

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Note 5 to Chapter 64
and several subheadings

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that were added to the tariff.

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>> 00:20:18.100 --> 00:20:45.650

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>> Addressing the addition of
textile fibers added to the bottoms

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of the outer soles of some
footwear and that was done

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to provide a more advantage duty
rate to some of the footwear.

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If it had regular rubber
or plastic outer soles

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the duty rate was quite high so.

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>> 00:20:46.520 --> 00:20:51.540

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>> To combat that,
the additional US note 5 was added and.

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>> 00:20:52.830 --> 00:20:57.630

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>> Additional subheadings about
18 or 20 of them, however.

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>> 00:21:02.540 --> 00:21:07.550

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>> Some types of footwear were not
included in this special advantage.

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>> 00:21:09.810 --> 00:21:21.840

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>> And basically waterproof
footwear was not included

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or did not have the
option to be classified

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in subheadings that used note 5.

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>> 00:21:24.320 --> 00:21:41.790

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>> The footwear with
rubber and plastic uppers

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and leather outsoles are classified
in 6405 at lower duty rates.

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So to qualify for
these lower duty rates.

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Many sought to turn their
rubber and plastic outer soles

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into leather outer soles.

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>> 00:21:42.880 --> 00:21:51.310

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>> But how would one modify a
rubber and plastic outer sole

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to become classifiable
as a leather outer sole.

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>> 00:21:53.520 --> 00:21:59.960

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>> There are several ways,

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the applications usually
took the form of just.

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>> 00:22:00.950 --> 00:22:07.180

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>> Sheets of leather attached
to the bottoms or the majority

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of the external surface
area of the outer soles.

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>> 00:22:07.960 --> 00:22:17.880

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>> Uh they took the
form of composition,

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leather or bonded leather
specifically designed

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to imitate real natural leather.

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>> 00:22:18.900 --> 00:22:26.150

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>> Leather fiber and leather dust were
added to the bottoms of the outer soles.

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>> 00:22:27.700 --> 00:22:57.590

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>> Now we have to understand what the
difference is between these substances

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to get some idea of
their character now.

00:23:05.620 --> 00:23:12.310
What is leather chapter 64 Note 3 B
says leather refers to goods described

00:23:12.310 --> 00:23:12.870
in tariff.

00:23:12.871 --> 00:23:20.266
Headings 41 O 741124114
and these provisions apply

00:23:20.266 --> 00:23:24.067
to tanned hides of animals
with the hair or fur removed.

00:23:24.067 --> 00:23:24.460
>> 00:22:58.180 --> 00:23:05.110

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>> Whether or not split usually from
bovine goat sheep lambs swine, reptiles.

00:23:31.695 --> 00:23:32.066
>> 00:23:06.300 --> 00:23:08.650

00:23:32.067 --> 00:23:35.168
>> These are this is
considered leather.

00:23:35.169 --> 00:23:36.919
>> 00:23:10.520 --> 00:23:20.280

00:23:36.920 --> 00:23:41.970
>> What is not considered leather
material would be tanned animal skins

00:23:41.970 --> 00:23:47.300
with the fur hair wool feathers
or down still attached?

00:23:47.300 --> 00:23:48.133
>> 00:23:21.520 --> 00:23:31.010

00:23:48.133 --> 00:23:51.780
>> Any leather coated
with laminated coated

00:23:51.781 --> 00:23:53.740
or laminated with a very thick layer

00:23:53.740 --> 00:23:57.667
of plastic, giving it the
essential character of plastic.

00:23:57.667 --> 00:23:58.667
>> 00:23:32.060 --> 00:23:41.660

00:23:58.667 --> 00:24:03.080
>> Composition leather uh which
has been found to be not plausible.

00:24:03.080 --> 00:24:05.340
Upper material because years back.

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It wasn't considered as
strong as regular leather.

00:24:08.304 --> 00:24:09.067
>> 00:23:42.610 --> 00:23:49.940

00:24:09.067 --> 00:24:13.930
>> I which is usually made from
small pieces of fibers agglomerated

00:24:13.930 --> 00:24:16.490
with a binder or by compression.

00:24:16.490 --> 00:24:18.949
>> 00:24:08.390 --> 00:24:12.040

00:24:34.905 --> 00:24:38.733
>> And the composition leather
mimics the real leather.

00:24:38.733 --> 00:24:39.355
>> 00:24:12.820 --> 00:24:19.300

00:24:39.355 --> 00:24:46.133
>> And the pieces of waste and dust
are held together with adhesives.

00:24:46.133 --> 00:24:47.333
>> 00:24:20.050 -->
00:24:20.790 >> And.

00:24:47.333 --> 00:24:48.066
>> 00:24:21.560 --> 00:24:26.230

00:24:48.067 --> 00:24:51.241
>> The composition whether has the
basis of leather in other words,

00:24:51.242 --> 00:24:52.737
it has to be mostly leather.

00:24:52.738 --> 00:24:55.622
>> 00:24:29.030 --> 00:24:48.270

00:24:55.623 --> 00:25:00.080
>> What is leather flock leather
flock consists of tiny particles

00:25:00.080 --> 00:25:06.350
of leather applied to the outer surface
for creating a texture or pattern.

00:25:06.350 --> 00:25:10.270
That's what it's usually used
for flocking is the process

00:25:10.270 --> 00:25:14.730
of adding small particles to a
surface for the sake of texture.

00:25:14.730 --> 00:25:15.800
>> 00:24:49.160 --> 00:24:52.460

00:25:15.800 --> 00:25:19.033
>> Or,
a material textured in this way.

00:25:19.033 --> 00:25:22.700
>> 00:24:56.340 --> 00:25:08.860

00:25:22.700 --> 00:25:27.967
>> The dust that is product of
a variety of tanning operations

00:25:27.967 --> 00:25:31.846
and some mechanical
operations is collected

00:25:31.846 --> 00:25:35.533
and buffing is also a major source
of dust.

00:25:35.533 --> 00:25:36.333
>> 00:25:09.600 --> 00:25:18.860

00:25:36.333 --> 00:25:40.700
>> This leather dust can
contain both fibers and grains

00:25:40.700 --> 00:25:45.467
and they can vary from 30
to 1200 microns in length.

00:25:45.467 --> 00:25:46.133
>> 00:25:19.510 --> 00:25:23.550

00:25:46.133 --> 00:25:50.068
>> And from 30 to 10 to
30 microns in diameter.

00:25:50.068 --> 00:25:50.969
>> 00:25:24.230 --> 00:25:28.280

00:25:50.970 --> 00:25:54.900
>> And the greens are usually
less than 10 microns in diameter.

00:25:54.900 --> 00:25:57.000
>> 00:25:30.470 --> 00:25:36.650

00:25:57.000 --> 00:26:03.200
>> And here we have an example
of a boot that is flocked with.

00:26:03.200 --> 00:26:03.667
>> 00:25:37.920 --> 00:25:41.880

00:26:03.667 --> 00:26:08.370
>> Leather looks like
fibers or grains or dust.

00:26:08.370 --> 00:26:09.800
>> 00:25:42.840 -->
00:25:43.270 >> Umm.

00:26:09.800 --> 00:26:11.933
>> 00:25:45.370 --> 00:25:55.410

00:26:11.933 --> 00:26:18.790
>> Now, if the sample or a lab
report confirms that the majority

00:26:18.790 --> 00:26:22.333
of the surface area coming
in contact with the ground.

00:26:22.333 --> 00:26:22.990
>> 00:25:56.080 --> 00:26:03.100

00:26:22.990 --> 00:26:28.540
>> Is substantially covered with leather
material and the footwear has a rubber

00:26:28.540 --> 00:26:29.760
and plastic upper?

00:26:29.760 --> 00:26:30.180
>> 00:26:03.950 --> 00:26:07.480

00:26:30.180 --> 00:26:34.000
>> It's classified in heading 6405.

00:26:34.000 --> 00:26:34.570
>> 00:26:08.290 --> 00:26:11.260

00:26:34.570 --> 00:26:38.200
>> In other words,
If it has a really thick.

00:26:38.200 --> 00:26:38.388
>> 00:26:12.660 --> 00:26:15.890

00:26:38.388 --> 00:26:42.336
>> Layer and it really
looks like leather.

00:26:42.336 --> 00:26:43.200
>> 00:26:23.320 --> 00:26:51.850

00:26:49.845 --> 00:26:53.949
>> And if upon review of the sample.

00:26:53.950 --> 00:26:59.490
It is determined that the outer sole
is covered with an uneven application

00:26:59.491 --> 00:27:03.891
or if microns,
thin layer of flocking or dust.

00:27:04.920 --> 00:27:10.600
It should be disregarded for tariff
classification purposes pursuant

00:27:10.600 --> 00:27:18.067
to note 4 B to Chapter 64, which
talks about ignoring the application.

00:27:18.067 --> 00:27:18.285
>> 00:26:51.950 --> 00:26:55.690

00:27:18.285 --> 00:27:21.940
>> And it being thought of as
an accessory or reinforcement.

00:27:21.940 --> 00:27:23.600
>> 00:26:56.540 -->
00:26:57.160 >> Umm.

00:27:23.600 --> 00:27:27.397
>> 00:27:00.910 --> 00:27:14.740

00:27:27.397 --> 00:27:33.350
>> So the bottom line is if
you have a very thick layer

00:27:33.350 --> 00:27:38.910
or a substantial enough layer of
leather flocking whether it be a slab

00:27:38.910 --> 00:27:41.369
or a fibers.

00:27:41.369 --> 00:27:41.582
>> 00:27:15.340 --> 00:27:20.650

00:27:41.582 --> 00:27:47.067
>> Umm it would be
classified and 6405.

00:27:47.067 --> 00:27:51.267
>> 00:27:22.630 --> 00:27:24.680
>> If it is Micron thin.

00:27:51.267 --> 00:27:53.709
>> 00:27:27.680 --> 00:27:39.280

00:27:53.709 --> 00:27:59.200
>> It should be treated as a similar
attachment and it should be disregarded

00:27:59.200 --> 00:28:03.684
and it would be classified as
whatever the material underneath

00:28:03.685 --> 00:28:05.890
is usually rubber and plastic.

00:28:05.890 --> 00:28:06.933
>> 00:27:40.440 --> 00:28:00.100

00:28:06.933 --> 00:28:11.490
>> So the classification of footwear
with the outer soles manufactured

00:28:11.490 --> 00:28:16.430
with leather flocking or dust should
be made on a case by case basis.

00:28:16.430 --> 00:28:19.430
So you have to see whether
it's evenly applied.

00:28:19.430 --> 00:28:21.120
If they have missing areas.

00:28:21.120 --> 00:28:27.030
Can you see through to the bottom of
the rubber room plastic out of sole?

00:28:27.030 --> 00:28:30.570
>> 00:28:00.800 --> 00:28:04.110 >> Iron
areas or is it sufficiently covered.

00:28:30.570 --> 00:28:34.633
>> 00:28:06.290 --> 00:28:08.120
>> Any questions on this section.

00:28:38.451 --> 00:28:39.091
>> 00:28:12.540 --> 00:28:16.830

00:28:39.091 --> 00:28:43.549
>> OK, it looks like we're going
to be answering a lot via email.

00:28:43.549 --> 00:28:46.067
>> 00:28:19.690 --> 00:28:43.430

00:28:46.067 --> 00:28:50.170
>> Now finally you have a
question in the toolbox ohh OK.

00:28:50.170 --> 00:28:53.320
What should the thickness be hmm.

00:28:53.320 --> 00:28:57.910
Well, yes, it is subjective,
but under magnification.

00:28:57.911 --> 00:29:02.031
Well, first of all if it's visible
and tactile on the outer surface.

00:29:03.210 --> 00:29:04.950
That's one hurdle.

00:29:04.950 --> 00:29:10.000
The second thing is under magnification
do you see it evenly applied?

00:29:10.000 --> 00:29:10.500
>> 00:28:44.200 --> 00:28:50.560

00:29:10.500 --> 00:29:14.980
>> Is it sufficiently thick
enough that it has the character

00:29:14.980 --> 00:29:17.267
of a leather outer sole?

00:29:17.267 --> 00:29:18.000
>> 00:28:51.760 --> 00:29:00.090

00:29:18.000 --> 00:29:21.020
>> Those are all the things
we take under consideration,

00:29:21.020 --> 00:29:24.100
but the thicker the
better the more likely.

00:29:24.100 --> 00:29:26.789
It is to be have the
character of leather.

00:29:26.789 --> 00:29:30.367
>> 00:29:00.780 --> 00:29:03.670 >>
And considered a leather outer sole.

00:29:30.367 --> 00:29:36.569
>> 00:29:05.900 --> 00:29:09.960
>> So our next last uh.

00:29:36.570 --> 00:29:37.665
>> 00:29:11.390 --> 00:29:15.320

00:29:37.665 --> 00:29:41.933
>> Final shoot issue
is wearable technology.

00:29:41.933 --> 00:29:43.333
>> 00:29:16.910 --> 00:29:40.060

00:29:43.333 --> 00:29:48.780
>> Now, when technology is
incorporated into clothing or footwear.

00:29:48.780 --> 00:29:54.110
It's considered wearable and it
can be used to track data collect

00:29:54.110 --> 00:29:59.190
and interpret it in meaningful ways
to improve athletic performance

00:29:59.190 --> 00:30:04.450
improve the quality of life
of physically impaired users

00:30:04.450 --> 00:30:06.090
and has many other uses.

00:30:06.090 --> 00:30:09.670
>> 00:29:42.630 -->
00:29:43.480 >> Now.

00:30:09.670 --> 00:30:10.000
>> 00:29:45.170 --> 00:29:50.980

00:30:10.000 --> 00:30:17.732
>> In April of 2021 headquarters
looked at and ruled on.

00:30:17.732 --> 00:30:20.333
>> 00:29:51.170 -->
00:29:53.770 >> A uh Nike.

00:30:20.333 --> 00:30:21.067
>> 00:29:54.570 --> 00:30:13.440

00:30:21.067 --> 00:30:28.500
>> Product called the Nike Adapt BB
and it consisted of 5 main components.

00:30:28.500 --> 00:30:31.740
It had a Bluetooth system on chip.

00:30:31.740 --> 00:30:36.130
It had a sensor pack consisting
of a Gyrich Gyroscope

00:30:36.130 --> 00:30:39.850
and accelerometer a capacitive sensor.

00:30:39.850 --> 00:30:40.667
>> 00:30:14.240 --> 00:30:23.170

00:30:40.667 --> 00:30:46.070
>> A system and subsystem components,
including 3 microcontroller

00:30:46.070 --> 00:30:49.738
unit processors flash memory.

00:30:49.738 --> 00:30:50.333
>> 00:30:23.880 --> 00:30:30.490

00:30:50.333 --> 00:30:55.640
>> And wireless power receiver
and auto lacing platform

00:30:55.640 --> 00:30:56.977
with the DC motor.

00:30:56.977 --> 00:31:02.267
>> 00:30:31.270 --> 00:30:35.240 >> And
a performance basketball shoe housing.

00:31:02.267 --> 00:31:05.033
>> 00:30:36.350 --> 00:30:38.160 >>
Did everything except make toast?

00:31:05.033 --> 00:31:05.166
>> 00:30:50.950 --> 00:30:58.460

00:31:17.488 --> 00:31:23.132
>> It also came with a wireless
charging pad a USB cable

00:31:23.133 --> 00:31:25.133
with the wall charger combo.

00:31:25.133 --> 00:31:25.770
>> 00:30:59.170 --> 00:31:04.140

00:31:25.770 --> 00:31:30.933
>> And an operating manual and it was
all packaged together for retail sale.

00:31:30.933 --> 00:31:33.067
>> 00:31:06.930 --> 00:31:10.460

00:31:33.067 --> 00:31:36.820
>> Now what is the
classification of this item?

00:31:36.820 --> 00:31:39.533
>> 00:31:13.140 --> 00:31:29.090

00:31:39.533 --> 00:31:44.800
>> Well, we have to go
through the GI 's and GRID.

00:31:44.800 --> 00:31:48.220
One provides that it
should be determined.

00:31:48.220 --> 00:31:52.490
According to the terms of the
headings of the tariff schedule

00:31:52.490 --> 00:31:55.960
and any relative section
or chapter notes.

00:31:55.960 --> 00:31:57.133
>> 00:31:30.750 --> 00:31:44.100

00:31:57.133 --> 00:32:00.730
>> And in the event that the
goods cannot be classified solely

00:32:00.730 --> 00:32:07.690
on the basis of these you do not
otherwise require the remaining GRID

00:32:07.690 --> 00:32:10.667
may be applied in appropriate order.

00:32:10.667 --> 00:32:12.067
>> 00:31:45.620 --> 00:31:56.940

00:32:12.067 --> 00:32:16.760
>> So then Nike adapt with
their multiple components

00:32:16.760 --> 00:32:22.760
and functions is really not described
under any one chapter provided

00:32:22.760 --> 00:32:23.600
in the tariff.

00:32:23.600 --> 00:32:28.000
>> 00:31:58.340 --> 00:32:03.560
>> And so to split them out.

00:32:28.000 --> 00:32:30.200
Uh we're looking at
different headings.

00:32:30.200 --> 00:32:30.670
>> 00:32:04.360 --> 00:32:14.460

00:32:30.670 --> 00:32:35.150
>> The footwear would have
been classified in 6404,

00:32:35.150 --> 00:32:41.000
the Bluetooth classified
heading in 8517.

00:32:41.000 --> 00:32:42.933
>> 00:32:15.140 -->
00:32:15.860 >> The system.

00:32:42.933 --> 00:32:43.250
>> 00:32:16.240 --> 00:32:22.710

00:32:43.250 --> 00:32:47.077
>> Technologies specifically
the data processing part

00:32:47.077 --> 00:32:49.567
of it would be under 8542.

00:32:49.567 --> 00:32:50.800
>> 00:32:24.150 --> 00:32:31.240

00:32:50.800 --> 00:32:57.867
>> The autofit technology would be
8501 the wireless charging pad 8504.

00:32:57.867 --> 00:32:58.533
>> 00:32:31.900 --> 00:32:51.800

00:32:58.533 --> 00:33:07.533
>> The memory 8523, the sensors, hitting
9031, you get the idea everywhere

00:33:08.167 --> 00:33:09.030
through the tariff.

00:33:09.030 --> 00:33:11.850
So the GRID 's.

00:33:11.850 --> 00:33:16.920
If say that if a good is consisting
of different materials and made up

00:33:16.920 --> 00:33:18.200
of different components.

00:33:18.200 --> 00:33:19.133
>> 00:32:52.620 --> 00:33:04.480

00:33:19.133 --> 00:33:23.540
>> And it cannot be classified
under any single provision.

00:33:23.540 --> 00:33:28.550
We turned to DRI 2 and that one states
that the classification consists

00:33:28.550 --> 00:33:30.834
of more than one
material or substance.

00:33:30.834 --> 00:33:32.000
>> 00:33:05.420 --> 00:33:10.210

00:33:32.000 --> 00:33:36.867
>> It should be classified
according to principles of GRI 3.

00:33:36.867 --> 00:33:38.020
>> 00:33:11.630 --> 00:33:15.690

00:33:38.020 --> 00:33:42.460
>> So for instance,
when the application of Rule 2 B.

00:33:42.460 --> 00:33:44.200
>> 00:33:17.810 --> 00:33:28.860

00:33:44.200 --> 00:33:50.130
>> The goods can't be classified under
that it should be affected using Rule 3

00:33:50.130 --> 00:33:55.667
and Rule 3, says the heading which
provides the most specific description.

00:33:55.667 --> 00:33:56.200
>> 00:33:29.670 --> 00:33:34.010

00:33:56.200 --> 00:34:00.370
>> Shall be preferred to Headings,
providing more general description.

00:34:00.370 --> 00:34:02.800
>> 00:33:35.350 -->
00:33:36.250 >> So.

00:34:02.800 --> 00:34:03.533
>> 00:33:37.010 --> 00:33:44.070

00:34:03.533 --> 00:34:08.800
>> And also when the 2 or more headings
refer to part only of the materials

00:34:08.800 --> 00:34:10.320
or substances contained.

00:34:10.320 --> 00:34:14.000
>> 00:33:44.600 --> 00:33:47.500 >> Uh
like for instance, a composite good.

00:34:14.000 --> 00:34:15.133
>> 00:33:48.550 --> 00:34:04.760

00:34:15.133 --> 00:34:21.120
>> Or to part only of the items
of a set put up for retail sale.

00:34:21.120 --> 00:34:25.550
Those headings are to be regarded
as equally specific in relation

00:34:25.550 --> 00:34:31.940
to those goods even if one of them gives
a more complete or precise description.

00:34:31.940 --> 00:34:35.547
>> 00:34:06.690 --> 00:34:08.970 >>
So when we have a composite good.

00:34:35.547 --> 00:34:38.100
>> 00:34:09.720 --> 00:34:11.730
>> Uh different materials.

00:34:38.100 --> 00:34:39.400
>> 00:34:12.950 --> 00:34:18.330

00:34:39.400 --> 00:34:44.400
>> And put up for retail sale, which
cannot be classified by reference to 3.

00:34:44.400 --> 00:34:44.933
A.

00:34:44.933 --> 00:34:45.800
>> 00:34:19.270 --> 00:34:27.290

00:34:45.800 --> 00:34:51.240
>> It should be classified as if they
consisted of the material or component,

00:34:51.240 --> 00:34:53.880
which gives them their
essential character.

00:34:53.880 --> 00:34:54.933
>> 00:34:28.500 --> 00:34:33.430

00:34:54.933 --> 00:34:59.974
>> And when it can't be
classified by 3 or 3 B.

00:34:59.974 --> 00:35:01.000
>> 00:34:34.550 --> 00:34:40.090

00:35:01.000 --> 00:35:05.320
>> They can be classified under
the heading which occurs last

00:35:05.320 --> 00:35:06.620
in numerical order.

00:35:06.620 --> 00:35:10.733
>> 00:34:42.760 -->
00:34:44.600 >> So here we have.

00:35:10.733 --> 00:35:12.067
>> 00:34:45.600 --> 00:34:58.630

00:35:12.067 --> 00:35:19.130
>> Whenever possible we follow the GRID
and 3 B states that in all these cases.

00:35:19.130 --> 00:35:23.080
The goods are to be classified if they
consisted of the material or component,

00:35:23.080 --> 00:35:25.380
which gives them their
essential character.

00:35:25.380 --> 00:35:26.000
>> 00:34:59.540 --> 00:35:07.140

00:35:26.000 --> 00:35:31.210
>> And the essential character will
vary it may be determined by the nature

00:35:31.210 --> 00:35:33.933
of the material or component.

00:35:33.933 --> 00:35:36.690
>> 00:35:07.840 --> 00:35:17.660
>> It's bulk it's quantity.

00:35:36.690 --> 00:35:37.750
It's weight.

00:35:37.750 --> 00:35:41.411
It's value or by the role
of the constituent material

00:35:41.412 --> 00:35:44.334
in relation to the use
of the goods.

00:35:44.335 --> 00:35:45.298
>> 00:35:18.770 --> 00:35:41.640

00:35:45.298 --> 00:35:48.933
>> And for the purposes of this
rule, the composite goods made up

00:35:48.933 --> 00:35:53.100
of different components shall
be taken to mean not only those

00:35:53.100 --> 00:35:56.430
in which the components
are attached to each other

00:35:56.430 --> 00:36:00.920
to form a practically
inseparable whole but also those

00:36:00.920 --> 00:36:05.410
with separable components provided
these components are adapted one

00:36:05.410 --> 00:36:08.110
to the other and are
mutually exclusive.

00:36:08.110 --> 00:36:12.067
>> 00:35:45.650 --> 00:35:59.820

00:36:12.067 --> 00:36:16.610
>> So Nike maintained that the
item could not be classified solely

00:36:16.610 --> 00:36:23.280
by the application of GRID one and they
contended that the essential character

00:36:23.280 --> 00:36:26.400
of the adapts footwear.

00:36:26.400 --> 00:36:26.950
>> 00:36:00.890 --> 00:36:11.740

00:36:26.950 --> 00:36:32.830
>> Was imparted by the
Bluetooth transceiving subsystem

00:36:32.830 --> 00:36:38.200
and argued that it was designed for
use as a wearable electronic device?

00:36:38.200 --> 00:36:39.000
>> 00:36:12.570 --> 00:36:21.340

00:36:39.000 --> 00:36:47.800
>> And recommended a classification
under subheading 85176200.

00:36:47.800 --> 00:36:49.466
>> 00:36:22.970 --> 00:36:52.620

00:36:49.467 --> 00:36:56.490
>> Well, we disagreed because CBP
has historically classified footwear

00:36:56.490 --> 00:37:02.000
with electronic modules
components batteries.

00:37:02.000 --> 00:37:05.380
Messaging messaging mechanisms.

00:37:05.380 --> 00:37:11.440
Light lights heating and sound
emitting capabilities as footwear.

00:37:11.440 --> 00:37:18.800
In Chapter 64 and some examples of
how we've classified footwear with.

00:37:18.800 --> 00:37:19.999
>> 00:36:53.500 --> 00:36:59.510

00:37:19.999 --> 00:37:25.867
>> Or composite footwear with all of
these wonderful things inside them are.

00:37:25.867 --> 00:37:27.200
>> 00:37:00.590 --> 00:37:08.500

00:37:27.200 --> 00:37:33.333
>> From 2006 we saw our ruling that
concerns slippers incorporating lights

00:37:33.333 --> 00:37:35.200
and weight sensors in them.

00:37:35.200 --> 00:37:36.866
>> 00:37:09.490 -->
00:37:10.330 >> And.

00:37:36.867 --> 00:37:37.932
>> 00:37:11.390 --> 00:37:20.520

00:37:37.933 --> 00:37:42.170
>> It even had bulbs in each
slipper that when angled upwards

00:37:42.171 --> 00:37:47.041
and it illuminated an area of 20
to 25 feet in front of the wear.

00:37:47.041 --> 00:37:48.417
>> 00:37:21.940 --> 00:37:28.470

00:37:48.417 --> 00:37:52.980
>> But each Slipper was powered by
2 lithium batteries and contained

00:37:52.980 --> 00:37:55.200
in a compartment on the medial side.

00:37:55.200 --> 00:37:58.730
>> 00:37:29.150 --> 00:37:32.040 >> Yet
that was still classified as footwear.

00:37:58.730 --> 00:38:00.733
>> 00:37:32.770 -->
00:37:34.440 >> In Chapter 64.

00:38:00.733 --> 00:38:03.867
>> 00:37:37.540 --> 00:37:49.710

00:38:03.867 --> 00:38:13.250
>> In 2013, 2010, we saw examples
classified in Chapter 64 as footwear,

00:38:13.250 --> 00:38:16.267
even though they contain
batteries and bulbs.

00:38:16.267 --> 00:38:17.333
>> 00:37:50.900 --> 00:38:02.790

00:38:17.333 --> 00:38:20.913
>> And in 2017, we had an one

00:38:20.914 --> 00:38:25.330
that contained electronics
batteries novelty shoes

00:38:25.330 --> 00:38:29.333
and contained a speaker and a
circuit board that emitted sounds.

00:38:29.333 --> 00:38:30.600
>> 00:38:04.250 --> 00:38:09.930

00:38:30.600 --> 00:38:36.667
>> In 2007, we had slippers that
contained electrical heating units.

00:38:36.667 --> 00:38:37.600
>> 00:38:11.110 --> 00:38:15.450

00:38:37.600 --> 00:38:42.067
>> And it could even be
charged plugged in to recharge.

00:38:42.067 --> 00:38:46.230
>> 00:38:16.430 --> 00:38:19.420
>> In 2011, we saw a hiking boot.

00:38:46.230 --> 00:38:49.540
>> 00:38:20.540 --> 00:38:23.050 >>
That was still classified as footwear.

00:38:49.541 --> 00:38:51.241
>> 00:38:24.860 --> 00:38:36.060

00:38:51.241 --> 00:38:57.467
>> Now, under GRI 3 B the composite
good must be classified according

00:38:57.467 --> 00:39:01.000
to the material component
that imparts the article

00:39:01.000 --> 00:39:02.600
with its essential character.

00:39:02.600 --> 00:39:03.000
>> 00:38:36.930 --> 00:38:44.480

00:39:03.000 --> 00:39:08.210
>> That, which is indispensable
to the structure core or condition

00:39:08.210 --> 00:39:11.088
of the article in other
words, what it is.

00:39:11.088 --> 00:39:11.867
>> 00:38:45.390 --> 00:39:00.790

00:39:11.867 --> 00:39:17.010
>> Although the adapt may
enable the wearer to enhance his

00:39:17.010 --> 00:39:22.333
or her experience via
smartphone or other device,

00:39:22.333 --> 00:39:27.467
the user must actually wear
them and use them as footwear.

00:39:27.467 --> 00:39:28.532
>> 00:39:01.930 --> 00:39:24.490

00:39:28.533 --> 00:39:31.830
>> If the wearer chooses
to enable some or many

00:39:31.830 --> 00:39:36.520
of the additional features like
gathering the data or tracking

00:39:36.520 --> 00:39:42.400
how far you've walked or or run and
subsequently transmitting that data

00:39:42.400 --> 00:39:43.400
to your phone.

00:39:44.390 --> 00:39:50.970
That's his or her option and however
you must use the adapt as footwear.

00:39:50.970 --> 00:39:54.400
>> 00:39:27.840 --> 00:39:40.440

00:39:54.400 --> 00:39:59.250
>> So while it was clear that the
basketball shoe is indispensable

00:39:59.250 --> 00:40:05.350
for the engagement of all the
experience options offered

00:40:05.350 --> 00:40:06.867
by the additional components.

00:40:06.867 --> 00:40:07.733
>> 00:39:41.220 --> 00:39:56.290

00:40:07.733 --> 00:40:11.900
>> Umm the footwear
predominated in size and weight

00:40:11.900 --> 00:40:16.620
and function and deliver the
experience of walking running

00:40:16.620 --> 00:40:20.387
and training as compared
with the ancillary uses

00:40:20.388 --> 00:40:22.770
of the technological features.

00:40:22.770 --> 00:40:24.733
>> 00:39:58.230 --> 00:40:07.590

00:40:24.733 --> 00:40:30.840
>> Now, unlike the wrist wrist
wearing smart devices whose value

00:40:30.840 --> 00:40:34.061
to the user comes from the
information they convey.

00:40:34.061 --> 00:40:34.867
>> 00:40:08.340 --> 00:40:18.390

00:40:34.867 --> 00:40:39.920
>> The adapt serves a utilitarian
function that provides the value

00:40:39.920 --> 00:40:44.810
to the user while the information
conveyed supplements that usefulness.

00:40:44.810 --> 00:40:46.180
>> 00:40:19.290 --> 00:40:26.150

00:40:46.180 --> 00:40:52.521
>> As such, the adapt is an article
of footwear classifiable under 6404.

00:40:52.521 --> 00:40:54.867
>> 00:40:28.400 --> 00:40:43.390

00:40:54.867 --> 00:40:59.401
>> So bottom line is
the essential character

00:40:59.402 --> 00:41:01.850
of the Nike Adapt BB was imparted

00:41:01.850 --> 00:41:07.070
by the footwear,
rather than the expensive components

00:41:07.070 --> 00:41:09.950
of the Bluetooth Transceiver.

00:41:09.950 --> 00:41:13.667
>> 00:40:46.990 --> 00:40:53.430

00:41:13.667 --> 00:41:19.946
>> So that was the whole thing
by GRI 3 B it's classified.

00:41:19.946 --> 00:41:24.133
>> 00:40:54.030 --> 00:40:57.410
>> Umm under subheading 640411.

00:41:24.133 --> 00:41:24.933
>> 00:40:58.380 --> 00:41:10.440

00:41:24.933 --> 00:41:28.580
>> As footwear without our souls
of rubber and plastics leather

00:41:28.580 --> 00:41:32.540
or composition leather and
upwards of textile materials.

00:41:32.540 --> 00:41:36.867
Tennis shoes basketball shoes gym
shoes training shoes and the like.

00:41:36.867 --> 00:41:41.800
>> 00:41:13.410 --> 00:41:15.380
>> So the bottom line is.

00:41:41.800 --> 00:41:43.132
>> 00:41:16.830 --> 00:41:22.300

00:41:43.132 --> 00:41:49.067
>> Wearable Smart Technology is a
growing sector of the marketplace and.

00:41:49.067 --> 00:41:49.478
>> 00:41:23.000 --> 00:41:34.180

00:41:49.479 --> 00:41:53.529
>> These types of merchandise
will require individual or case

00:41:53.530 --> 00:41:58.720
by case analysis in order to
determine their essential character

00:41:58.720 --> 00:42:00.600
and ultimate classification.

00:42:00.600 --> 00:42:03.674
>> 00:41:37.220 --> 00:41:40.010

00:42:03.674 --> 00:42:06.533
>> So do we have any
questions on this section?

00:42:06.533 --> 00:42:08.492
>> 00:41:42.050 --> 00:41:53.190

00:42:08.492 --> 00:42:14.617
>> I'll wait a few seconds if not,
I'll tell you my email address again.

00:42:14.617 --> 00:42:19.867
Stacey dot KALKINES.

00:42:19.867 --> 00:42:20.869
>> 00:41:54.240 --> 00:42:04.620

00:42:20.870 --> 00:42:29.570
>> At CBP Dot DHS Dot Govi welcome your
questions and hope to get back to you

00:42:29.570 --> 00:42:31.120
in a reasonable amount of time.

00:42:31.120 --> 00:42:35.204
>> 00:42:08.880 --> 00:42:13.570

00:42:35.204 --> 00:42:39.900
>> You know just wait a few seconds
more to see if we have any questions.

00:42:39.900 --> 00:42:41.686
>> 00:42:15.230 --> 00:42:18.100

00:42:41.686 --> 00:42:44.767
>> I guess everybody's
saving up for their emails.

00:42:44.767 --> 00:42:46.166
>> 00:42:22.490 --> 00:42:27.890

00:42:48.900 --> 00:42:54.667
>> And just to reiterate Sandra said
that the recording will be provided.

00:42:54.667 --> 00:43:00.933
>> 00:42:34.560 --> 00:42:39.910

00:43:00.933 --> 00:43:06.567
>> OK, yes, we have so many people
that the questions are just flying by.

00:43:06.567 --> 00:43:08.833
>> 00:42:42.330 --> 00:42:51.530

00:43:08.833 --> 00:43:18.162
>> So, please put them in an email
question to me, Stacey dot KALKINES.

00:43:18.162 --> 00:43:22.234
>> 00:42:53.720 --> 00:42:55.990
>> At a question to you.

00:43:22.234 --> 00:43:22.413
>> 00:42:57.590 --> 00:43:07.420

00:43:22.413 --> 00:43:28.594
>> There was one that was asking
about whether uppers of PU leather

00:43:28.594 --> 00:43:34.233
or polyurethane leather vegan leather
fall into Chapter 6403 or 6405.

00:43:34.233 --> 00:43:35.163
>> 00:43:08.690 --> 00:43:13.180

00:43:35.163 --> 00:43:40.133
>> OK so vegan leather
would not be from a cow.

00:43:40.133 --> 00:43:40.733
>> 00:47:45.750 --> 00:47:58.150

00:48:12.206 --> 00:48:16.008
>> OK So what question
what slide did you want me

00:48:16.008 --> 00:48:20.433
to do that there's also a
question to see 41 and 47?

00:48:20.433 --> 00:48:24.967
Maybe before we go all the
way up to the 70s so slide 41.

00:48:24.967 --> 00:48:27.533
>> 00:47:59.140 --> 00:48:00.750 >>
It just wanted to view that again.

00:48:27.533 --> 00:48:30.533
>> 00:48:04.000 --> 00:48:11.340

00:48:30.533 --> 00:48:35.367
>> Slide 41 OK this is
example of athletic footwear

00:48:35.367 --> 00:48:38.100
with heavy heavy embroidery.

00:48:38.100 --> 00:48:39.512
>> 00:48:13.100 --> 00:48:19.800

00:48:39.512 --> 00:48:45.225
>> So heavy embroidery being unlike
the sequins probably won't come off

00:48:45.225 --> 00:48:46.500
when you're using them.

00:48:46.500 --> 00:48:47.453
>> 00:48:20.940 --> 00:48:26.550

00:48:47.453 --> 00:48:53.367
>> So they could still be considered
athletic and what other number like 47.

00:48:53.367 --> 00:48:54.400
>> 00:48:27.490 -->
00:48:28.760 >> 47.

00:48:54.400 --> 00:49:03.033
>> 00:48:33.700 --> 00:48:36.390 >>
OK, yes, this is the example that.

00:49:03.033 --> 00:49:03.467
>> 00:48:36.840 --> 00:48:41.950

00:49:03.467 --> 00:49:08.767
>> Umm waterproof footwear
that was not included.

00:49:08.767 --> 00:49:09.289
>> 00:48:43.170 --> 00:48:48.800

00:49:09.289 --> 00:49:16.033
>> In the new sub headings that
addressed additional US note 5.

00:49:16.033 --> 00:49:16.206
>> 00:48:49.560 --> 00:49:13.990

00:49:16.206 --> 00:49:22.367
>> Umm so these would not get a
chance to get a reduced duty rate.

00:49:22.367 --> 00:49:26.700
If textile was applied to the bottoms.

00:49:26.700 --> 00:49:33.367
So that's why people started considering
applying leather fibers and trying

00:49:33.367 --> 00:49:39.500
to get them in as full blown
leather outer soles, but again,

00:49:39.500 --> 00:49:40.884
it has to be thick enough.

00:49:40.884 --> 00:49:43.532
>> 00:49:14.870 --> 00:49:16.840
>> To qualify as leather?

00:49:43.532 --> 00:49:46.400
>> 00:49:18.710 --> 00:49:19.810
>> What's the next number?

00:49:46.400 --> 00:49:49.533
>> 00:49:21.420 --> 00:49:27.430
>> Is arzal which slide?

00:49:49.533 --> 00:49:50.700
Was it that you wanted?

00:49:50.700 --> 00:49:52.865
Was it 76 or 783070?

00:49:52.865 --> 00:49:55.467
>> 00:49:28.550 -->
00:49:28.940 >> Sorry.

00:49:55.467 --> 00:49:58.217
>> 00:49:29.570 -->
00:49:35.730 >> 7979.

00:49:58.217 --> 00:50:02.567
Thank you OK here,
I go travelling up to 79.

00:50:02.567 --> 00:50:07.900
>> 00:49:39.560 --> 00:49:41.100
>> Going to stop way before.

00:50:07.900 --> 00:50:18.900
>> 00:49:50.620 --> 00:49:52.040
>> That's a good one bottom line.

00:50:18.900 --> 00:50:19.938
>> 00:49:53.450 --> 00:49:55.620

00:50:19.938 --> 00:50:22.467
>> It'll probably not
the one that you wanted.

00:50:22.467 --> 00:50:32.333
>> 00:50:04.120 --> 00:50:07.480
Then I guess I didn't miss it.

00:50:32.333 --> 00:50:34.300
Thank you OK.