CLA-2-48:OT:RR:NC:4:434
Mr. David Murphy
GDLSK, LLP
599 Lexington Ave. FL 36
New York, NY 10022
RE: A country of origin determination of paper file folders
Dear Mr. Murphy:
In your letter, dated April 21, 2023, you requested a country of origin ruling for marking and duty purposes on behalf of your client, Staples, Inc., on two styles of paper file folders. A detailed description of the manufacturing operations, values, and photos of the items were submitted for our review.
The finished goods to be imported are two file folders: Item TR875411, a hanging file folder, and Item ST413781, a pressboard classification file folder.
TR875411 is a hanging file folder measuring approximately 20.75” x 11.62” made of 170 GSM paper stock. It will be imported packaged 25 folders per box and come in assorted colors. PVC tabs and paper inserts for labeling the folders will be included.
ST413781 is a classification folder measuring approximately 11.75” x 10”. The folder features one divider, tabs, metal fasteners, and an expansion binding. They will be packaged five folders per box.
First, we will address tariff classification. The applicable subheading for the folders will be 4820.30.0040, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Binders (other than book covers), folders and file covers: Other.” The rate of duty will be Free.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at https://hts.usitc.gov/current.
You also requested a country of origin determination for the purposes of marking and duty. In your letter, you describe a scenario wherein parent rolls of paper from Vietnam, Japan, or Indonesia are sent to Cambodia where they will be further manufactured into their final form with additional components sourced from Cambodia, with the exception of the binding, which is of Swedish origin. The manufacturing process is described here:
Item TR875411, hanging file folder:
The jumbo rolls of uncoated white paper (170GSM) measure from 128 cm to 200 cm in width and 3,000 meters to 5,000 meters in length.
In Cambodia the rolls are processed through a printing machine where ink of Cambodia origin is applied to uniformly color the paper.
The paper is then die-cut to length and width.
A hook is attached on the top sides of the paper using a gluing and assembling machine.
The edge is perforated with a line of holes suitable to secure the PVC tabs and paper inserts.
It is folded, and the PVC tabs and paper inserts (sourced in Cambodia) are added.
The file folders are packaged.
Item ST413781, classification file folder:
The jumbo rolls of uncoated white paper (520 GSM) measure either 920mm or 770mm in width and 3,000 meters in length.
In Cambodia the rolls are processed through a printing machine where ink of Cambodia origin is applied to uniformly color the paper.
The paper is then die-cut to length and width, laminated into 2-ply colored pressboards with glue on a laminating machine, and shaped to be used for the file folder covers.
Kraft paper (350 GSM) jumbo rolls, which ranges in size from about 50 to 90 cm in width and 3,000 to 5,000 meters in length are sourced from Cambodia and cut into dividers and parts for the folders.
Fasteners are embedded on the file folder covers and divider to secure and organize documents.
The folder components, including covers, dividers, fasteners, and expansion binding are then assembled to form the finished folder.
They are packed in boxes of five and then placed in shipping containers.
Section 304 of the Tariff Act of 1930 (19 U.S.C. 1304), provides that unless excepted, every article of foreign origin imported into the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.
Part 134, U.S. Customs and Border Protection (“CBP”) Regulations (19 C.F.R. Part 134), implements the country of origin marking requirements of 19 U.S.C. § 1304. Title 19, Section 134.1(b) defines “country of origin” as “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 this part; ….” A substantial transformation occurs “when as a result of a process an article emerges, having a distinctive name, character or use” from the original material subjected to the process. If the manufacturing process is a minor one, which leaves the identity of the imported article intact, a substantial transformation has not occurred. See Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026 (1982), aff’d per curiam, 702 F.2d 1022 (Fed. Cir. 1983).
You propose that the country of origin is Cambodia. We agree. The parent rolls of paper from Vietnam, Japan, or Indonesia are substantially transformed when they undergo manufacturing operations in Cambodia. The jumbo rolls of paper are not predetermined for use as folders upon importation into Cambodia, while the finished product leaving Cambodia is predetermined to be used as file folders and have no other practical use. The rolls of paper have been transformed into a new article with a distinctive name, character, or use. We also note that the majority of the folders’ value is imparted from materials and labor sourced in Cambodia. When imported into the United States, the country of origin of these products for marking and duty purposes will be Cambodia.
This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported.
If you have any questions regarding the ruling, contact National Import Specialist Charlene Miller [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division