CLA-2-48:OT:RR:NC:N4:434
Alice Lu
Printx GP Factory Co. Ltd.
National Rd. #51, Trapeang Phlong Village
Damnak Reang Commune, Oudong District
Kampong Speu Province
CAMBODIA
RE: The country of origin marking of padfolios
Dear Ms. Lu:
In your letter dated September 30, 2021, you requested a ruling for country of origin for the purposes of marking on behalf of your client, Lowe’s Companies. Samples and a detailed description of the manufacturing operation was provided for our review.
The article under consideration is the “Kobalt Work Pad Folio,” item number 1059308. The padfolio, when zipped closed, measures approximately 13” (L) x 10” (W) by 1.5” (D) and is constructed of what appears to be plastic sheeting, foam, and cardboard covered with textile. The interior includes a slot into which an 8.5” x 11” lined writing pad has been inserted. The opposing interior cover incorporates an elastic pen loop, a small calculator, three small pockets for holding business cards or the like, and two vertical pockets for holding slim items, such as papers.
In ruling N321390, dated 9/28/21, the padfolios were classified in subheading 4820.10.2020, Harmonized Tariff Schedule of the United States (HTSUS), which provides for: “Memorandum pads, letter pads and similar articles.”
In your submission, you list the following countries of origin for the raw materials and components:
China:
Body fabric
Binding
“Accessories” (calculator, paper pad, polyethylene board, zipper tape)
Metal components (zipper slider and pull)
Cambodia:
Stuffing foam
Thread
You state that “cutting is done in Cambodia” and “Each and all assembly steps are performed in Cambodia.” You support that contention with multiple photos of your factory in Cambodia where employees are seen cutting, stitching, and assembling the padfolio covers. Specifically, per your submission, “the manufacturing process in Cambodia includes, (but is not limited to) 1/ Incoming inspection of the raw materials to ensure conformity, 2/ Cutting the raw materials using dies and molds based on patterns, 3/ Embroidering customer logos onto the cut material panels, 4/ Sewing the material panels, linings and interlining foams to assemble into tool bags or tool pouches, 5/ Assembly with additional hardware such as zippers, studs, plaques, etc. to complete the bag assembly, 6/ Perform in-line and final quality control to ensure the finished goods comply with customer’s standards, 7/ Packing the finished bag using QP display box and corrugated cardboard packaging materials, 8/ Load the cartons into containers for export.”
You also provide photos of the raw materials shipped from China, which include rolls of material, zippers, clear PVC, retail labels, calculators, and paper pads.
Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. §1304), provides that unless excepted, every article of foreign origin imported into the United States 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 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 the imported goods the country of which the goods is 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. Friedlander & Co., 27 C.C.P.A. 297 at 302; C.A.D. 104 (1940). Part 134, Customs Regulations (19 C.F.R. 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b), Customs Regulations (19 C.F.R. 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 an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. A substantial transformation will not result from a minor manufacturing or combining process that leaves the identity of the article intact. See United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (1940); and National Juice Products Association v. United States, 628 F. Supp. 978 (Ct. Int’l Trade 1986).
For country of origin marking purposes, we note that the textile padfolio has undergone a substantial transformation in Cambodia, as that is the country in which the raw materials are manufactured into the finished cover. However, the China-made pad of paper and calculator are not substantially transformed in Cambodia; they are merely added to the padfolio by means of a minor combining process. Therefore, the country of origin marking must reflect both Cambodia and China. The hangtag or other retail packaging must be marked clearly, conspicuously, legibly, and permanently with both countries of origin, in English. For example, “Padfolio made in Cambodia. Paper pad and calculator made in China.” The current tag reading simply “Made in Cambodia” does not meet marking requirements.
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 at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division