CLA-2-48:OT:RR: NC:4:434
Elizabeth McGuffin
Dollar General
100 Mission Ridge
Goodlettsville, TN 37072
RE: A classification, country of origin, and marking determination on sketchbooks
Dear Ms. McGuffin:
In your letter, dated December 3, 2021, you requested a tariff classification, country of origin, and marking ruling. A detailed description of the manufacturing operations and photos of the components and finished sketchbook were submitted for our review.
The finished item will be a 9” x 11” sketchbook, spiral bound at the top between paperboard covers, and containing 80 sheets (160 pages) of blank paper. The paper is described as 110gsm, extra white, uncoated, no ash content, with a smooth surface.
First we will address classification. The applicable subheading for the sketchbooks will be 4820.10.4000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Registers, account books, notebooks, order books, receipt books, letter pads, memorandum pads, diaries and similar articles: Other. The rate of duty will be Free.
You further inquire about the country of origin of the sketchbooks. The raw materials and manufacturing process are as follows:
Blank paper, in jumbo rolls, 603mm wide by 6300m in length, made in South Korea
Printed art card in rolls (for eventual use as covers) made in South Korea
Nylon-coated steel wire coils, on spools, made in China
All materials are shipped to Malaysia where the paper will be cut-to-size to fit in the 9” x 11” sketchbook. The paperboard covers will be cut-to-size, printed with graphics, and perforated to allow for insertion of the coil. The pages will be collated with the covers, the wire coil inserted, and the finished sketchbooks packaged for shipping.
You also provided a breakdown of manufacturing costs, including labor: South Korea 55%, Malaysia 36% and China 9%.
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. Belcrest Linens v. United States, 741 F.2d 1368, 1372 (Fed. Cir. 1984). 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).
Cutting to size and simple assembly operations are considered minor manufacturing processes that do not constitute a substantial transformation.
Headquarters ruling H306091, dated February 18, 2020, determined the country of origin for adhesive note pads. This ruling concluded that the jumbo rolls of paper had not undergone a substantial transformation by simply being cut-to-size, coated, and formed into pads. It states, “…the operations in Taiwan constitute mere finishing operations. The adhesive notes are essentially the same product at different stages of manufacture…The final product is essentially a smaller size paper with chemical release coating applied to the front and chemical primer and glue on the back that is not changed into a new separate and distinct article of commerce. While the glue applied to the back allows the paper to be stuck on a surface, the operation of gluing paper together at the top is essentially the same, and the paper still remains paper.”
In light of the conclusions drawn in Headquarters ruling H306091, the country of origin of the finished sketchpads will be South Korea, which is the country of origin of the paper.
The marking statute, section 304, Tariff Act of 1930, as amended (19 U.S.C. §1304), provides that, unless excepted, every article of foreign origin (or its container) 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. As provided in section 134.41(b), Customs Regulations (19 CFR 134.41(b)), the country of origin marking is considered conspicuous if the ultimate purchaser in the U.S. is able to find the marking easily and read it without strain. With regard to the permanency of a marking, section 134.41(a), Customs Regulations (19 CFR 134.41(a)), provides that as a general rule marking requirements are best met by marking worked into the article at the time of manufacture. For example, it is suggested that the country of origin on metal articles be die sunk, molded in, or etched. However, section 134.44, Customs Regulations (19 CFR 134.44), generally provides that any marking that is sufficiently permanent so that it will remain on the article until it reaches the ultimate purchaser unless deliberately removed is acceptable.
The photos of the sketchbook you submitted show marking printed on a sticker adhered to the back of the sketchbook reading, “Made in Malaysia.” This marking is conspicuous, legible, indelible and permanent. However, it does not reflect the actual country of origin. It should should read, “Made in South Korea” or alternatively “Made in the Republic of Korea.”
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