OT:RR:CTF:VSP H352504 ACH
Daisy Zhao
Yongtai Co. Ltd.
Dong Van IV Industrial Park
Kim Thanh Ward
Ninh Binh, Vietnam
Re: Country of origin of Paper Grass; Section 301
Dear Ms. Zhao:
This is in response to your letter dated August 14, 2025, requesting a binding ruling on
behalf of your client, Walgreen Co., concerning the country of origin of Paper Grass for marking
and Section 301 duty purposes.
FACTS:
The item under consideration is Paper Grass, commonly known as “Easter Grass” for its
use in Easter baskets. The Paper Grass consists of 2mm-wide strips of uncoated paper that have
been crinkled or crimped in accordion folds. The product is marketed for decorative use only.
The base paper used to make the Paper Grass is manufactured in China and then shipped to
Vietnam. In Vietnam, the paper is cut into 2mm-wide strips, machine crinkled, and packaged.
ISSUES:
(1) What is the country of origin for marking purposes of the Paper Grass?
(2) Whether the Paper Grass is subject to Section 301 measures.
LAW AND ANALYSIS:
(1) Country of origin Marking
The marking statute, Section 304(a), Tariff Act of 1930, as amended (19 U.S.C. §
1304(a)), provides that unless excepted, “every article of foreign origin (or its container …)
imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and
permanently as the nature of the article (or container) will permit in such manner as to indicate to
an ultimate purchaser in the United States the English name of the country of origin of the
article.” Congressional intent in enacting 19 U.S.C. § 1304 was “that the ultimate purchaser
should be able to know by an inspection of the marking on imported goods the country of which
the goods [are] the product. The evident purpose is to mark the goods so that at the time of
purchase the ultimate purchaser may, by knowing where the goods were produced, be able to
buy or refuse to buy them, if such marking should influence his will.” United States v.
Friedlaender & Co., 27 C.C.P.A. 297, 302 (1940). Part 134 of Title 19 of the Code of Federal
Regulations implements the country of origin marking requirements and exceptions of 19 U.S.C.
§ 1304. 19 C.F.R. § 134.1(b) provides as follows:
(b) Country of origin. “Country of origin” means the country of manufacture,
production, or growth of any article of foreign origin entering the United States.
Further work or material added to an article in another country must effect a
substantial transformation in order to render such other country the “country of
origin” within the meaning of [the marking laws and regulations].
The test for determining whether a substantial transformation occurs is whether an article
emerges from a process with a new name, character or use, different from that possessed by the
article prior to processing. Texas Instruments Inc. v. United States, 681 F.2d 778 (CCPA 1982).
This determination is based on the totality of the evidence. National Hand Tool Corp. v. United
States, 16 Ct. Int’l Trade 308, 312 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). The U.S. Court
of International Trade (“CIT”) has stated that “if the manufacturing or combining process is
merely a minor one which leaves the identity of the imported article intact, a substantial
transformation has not occurred.” Uniroyal, Inc. v. United States, 542 F. Supp. 1026, 1029 (Ct.
Int’l Trade 1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983) (per curiam).
The CIT has indicated that “[f]or courts to find a change in character, there often needs to
be a substantial alteration in the characteristics of the article or components.” Energizer Battery,
Inc. v. United States, 190 F. Supp. 3d 1308, 1318 (2016) (citing Ran-Paige Co., Inc. v. United
States, 35 Fed. Cl. 117, 121 (1996) and National Hand Tool Corp. v. United States, 16 Ct. Int’l
Trade 308, 311 (1992)). Courts have also considered “the ‘essence’ of a completed article to
determine whether an imported article has undergone a change in character as a result of post
importation processing.” Id. (citing Uniden America Corp. v. United States, 120 F. Supp. 2d
1091, 1095-1098 (Ct. Int’l Trade 2000) and Uniroyal, Inc., 542 F. Supp. 1030). In Uniroyal,
Inc., the court determined that the shoe upper was “the very essence of the completed shoe” and
that the attachment of the imported shoe uppers to an outer sole in the United States was a
“minor manufacturing or combining process which [left] the identity of the upper intact,”
therefore, the shoe upper was not substantially transformed in the United States. 542 F. Supp. at
1029-1030. The court also noted that the minor assembly operation in the United States
“require[d] only a small fraction of the time and cost involved in producing the uppers.” Id. at
1030.
CBP has previously found that cutting rolls of paper to size is a finishing operation and
does not constitute a substantial transformation. In HQ 557408, dated January 14, 1994, CBP
concluded that U.S. sheets of paper with printed bingo faces dedicated for use as bingo face
sheets that were sent to Mexico for cutting, collating, and gluing did not undergo a substantial
transformation. The use remained unchanged through the completion of the bingo booklets
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because the materials were “essentially the same product at different stages of manufacture.” In
HQ 563306, dated September 20, 2005, CBP held that jumbo rolls of tissue paper that were cut,
folded, and packaged into gift tissue paper were not substantially transformed because the jumbo
rolls did not have a different use or character than the finished packaged tissue paper. The
procedures were considered “mere finishing operations.” In HQ W967997, dated October 5,
2006, master rolls of tissue paper from China were not substantially transformed when printed
with colors and designs and cut to size to form gift tissue sheets. Further, in New York Ruling
Letter (“NY”) N307942, dated December 10, 2019, bulk rolls of tissue paper printed with a
design were not considered to be substantially transformed by being hot-stamped with foil film,
cut to size, and folded. Finally, in HQ H306091, dated February 18, 2020, CBP addressed a
situation in which Sticky Notes were made by cutting rolls of paper and gluing the smaller units
together. CBP determined that the jumbo roll dictated the country of origin because adding the
glue and cutting the roll constituted “mere finishing operations.”
Here, as in 563306, CBP believes the cutting and folding of the paper does not constitute
a substantial transformation. The Paper Grass and the sheets of paper are “essentially the same
product at different stages of manufacture.” The final product is essentially a smaller, bent
version of the same paper. Further, the processes of cutting and folding the paper are simple
operations. In addition, the paper itself would have to be the texture and of such a quality to be
used as Easter grass even before the grass is cut and folded. Therefore, because the country of
origin of the paper sheets is China, the country of origin of the Paper Grass is also China.
(2) Is the Paper Grass subject to Section 301 measures?
The United States Trade Representative has determined that an additional ad valorem
duty will be imposed on certain Chinese imports pursuant to USTR’s authority under Section
301(b) of the Trade Act of 1974 (“Section 301 measures”). See Section XXII, Chapter 99,
Subchapter III, U.S. Note 20, HTSUS. The substantial transformation analysis is applicable
when determining the country of origin for purposes of applying Section 301 measures. See HQ
H301494, dated October 29, 2019, and HQ H301619, dated November 6, 2018.
In this case, the Paper Grass is subject to the additional Section 301 measures because the
country of origin of the Paper Grass is China, where the paper sheets are manufactured.
HOLDING:
The country of origin of the Paper Grass for purposes of marking and for purposes of
additional Section 301 measures is China. Therefore, the Paper Grass is subject to Section 301
measures.
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the
assumption that all of the information furnished in connection with the ruling request and
incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and
complete in every material respect. The application of a ruling letter by a Customs Service field
office to the transaction to which it is purported to relate is subject to the verification of the facts
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incorporated in the ruling letter, a comparison of the transaction described therein to the actual
transaction, and the satisfaction of any conditions on which the ruling was based.”
A copy of this ruling letter should be attached to the entry documents filed at the time this
merchandise is entered. If the documents have been filed without a copy, this ruling should be
brought to the attention of the CBP officer handling the transaction.
Sincerely,
Monika R. Brenner, Chief
Valuation and Special Programs Branch
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