CLA-2-48:OT:RR:NC:4:434
Elizabeth Merritt
A.N. Deringer
173 W. Service Rd.
Champlain, NY 12919
RE: A country of origin and marking determination of various paper products
Dear Ms. Merritt:
In your letter, dated May 22, 2023, you requested a country of origin and marking ruling on behalf of your client, Offshore International Paper, on various paper products. A detailed description of the manufacturing operations and photos of the items were submitted for our review.
The products to be imported are:
1) Single and Large Format Rolled Toilet Tissue – basis weight 12.5gsm – 15gsm / FSC Certified Virgin Raw and Recycled Materials
2) Folded Hand Towels of Several Folded Forms – basis weight 32gsm – 34gsm / FSC Certified Virgin Raw and Recycled Materials
3) Rolled Paper Towels for Dispensing Equipment – basis weight 32gsm – 38gsm / FSC Certified Virgin Raw and Recycled Materials, width: 8 inches, length: 800 or 1000 feet.
You state that the above products are large-format and commercial-grade, of a type used in hospitals, universities, and other similar facilities.
First, we will address tariff classification.
The applicable subheading for the toilet paper will be 4818.10.0000, HTSUS, which provides for “Toilet paper.” The rate of duty will be Free.
The applicable subheading for the folded paper towels and rolled paper towels will be 4818.20.0020, HTSUS, which provides for “Handkerchiefs, cleansing or facial tissues and towels: Towels” (of paper). 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. In your letter, you describe a scenario wherein parent rolls of paper made in Indonesia are sent to China, where they will be further manufactured into their final form as described here:
1) In Indonesia, pulp obtained from trees or from recycling operations is milled into paper that is wound onto rolls 101 inches in height (jumbo rolls). Each jumbo roll of paper will be 101 inches in height, wound on a 3-inch core, and approximately 55 inches in width.
2) Parent jumbo rolls will be purchased from Indonesian mills and shipped to a paper converting facility in China. The basis weight of the paper that will be purchased in Indonesia will vary depending on the nature of the finished product to be produced in China.
3) The jumbo rolls will be loaded onto a specific unit of a converting machine dependent upon the finished product to be produced.
4) The converting machine will unspool the jumbo rolls and either re-roll (onto smaller rolls) or fold the paper in a fully-automated manner.
5) The converting machine will then cut the re-rolled or folded paper in an automated manner.
6) The cut finished products will be individually wrapped in external packaging, either by hand or by machine.
7) The finished packaged goods will be packed into China-manufactured cardboard shipping boxes and loaded into a shipping container.
8) Upon import into the U.S., the cardboard shipping boxes containing the finished goods will be delivered directly to the U.S. purchaser.
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. 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).
It can also be informative to research existing Headquarters rulings. HQ W967997 (10/5/06) determined that tissue paper that was printed, cut to size, and folded had not undergone a substantial transformation. H306091 (2/2/20) ruled that a parent roll of paper that was transformed into sticky notes by cutting to size and applying adhesive had not undergone a substantial transformation.
You propose that the country of origin is Indonesia. We agree. The parent rolls of paper from Indonesia are not substantially transformed when cut to size, re-rolled or folded to form the finished paper products in China. When imported into the United States, the country of origin of these products for marking purposes will be Indonesia.
You further inquire about country of origin marking for your paper products. As stated in your submission, Offshore’s finished commercial paper products will be imported into the U.S. and delivered to the ultimate U.S. purchaser in disposable cardboard shipping boxes that will be manufactured in China. Offshore plans to print “Made in Indonesia” or “Product of Indonesia”, in ink, on the exterior of these boxes. You sell to domestic manufacturers of similar paper products in the United States that use your foreign made products to supplement their own lines when there are lapses in production capacity. You state that the Indonesia made products will be repackaged to reflect the domestic manufacturer’s brand. Any such repackaging must not falsely indicate or imply a U.S. country of origin, but must be marked to indicate the country of origin as Indonesia. 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.
Pursuant to Section 134.26, Customs Regulations (19 CFR 134.26), if an article subject to these requirements is intended to be repacked in retail containers (e.g., blister packs) after its release from Customs custody, the importer shall certify to the Center director that: (1) If the importer does the repacking, he shall not obscure or conceal the country of origin marking appearing on the article, or else the new container shall be marked to indicate the country of origin of the article in accordance with the requirements of this part; or (2) if the article is intended to be sold or transferred to a subsequent purchaser or repacker, the importer shall notify such purchaser or transferee, in writing, at the time of sale or transfer, that any repacking of the article must conform to these requirements. The regulation provides the specific statement of certification that will be signed by the importer when the imported merchandise is to be repacked after importation. (See 19 CFR 134.26(a))
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