H352504

H352504 ACH CATEGORY: Origin 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 2 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 subj

(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),