Dutiability of Assists; Resin

H342634 April 24, 2025 OT:RR:CTF:VS H342634 JH CATEGORY: Valuation Richard Writsman Continental Agency Inc. 1768 W. Second St. Pomona, CA 91766 RE: Dutiability of Assists; Resin Dear Mr. Writsman: This is in response to your letter, dated August 28, 2024 in which you request a ruling on behalf of Duralok, Inc., concerning the dutiability of low density polyethylene (“LDPE”) resin (“resin”) sold by United States (U.S.) vendors to Yantai Bagmart Packaging Co., LTD (“Chinese manufacturer”) in China. The resin is used in the production of the imported merchandise. FACTS: The importer of the merchandise, various styles of zipper type LDPE plastic bags, does not produce or provide the resin to the Chinese manufacturer. Instead, the Chinese manufacturer purchases the resin from unrelated U.S. vendors at market rate. After purchase, the resin is sent to the Chinese manufacturer with “FOB China” Incoterms. In China, the resin is mixed and made into a film that is then used to make the plastic bags. Once production is complete, Duralok imports the bags into the U.S. The country of origin of the bags is China and they are classifiable under subheading 3923.21, Harmonized Tariff Schedule of the United States (“HTSUS”). The term of sale for the bags being sent back to the U.S. is “FOB China”. ISSUE: Whether the cost of the resin is part of the "price actually paid or payable" in determining the transaction value of the final imported product. 1 LAW AND ANALYSIS: Merchandise imported into the United States is appraised in accordance with section 402 of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979 (TAA; 19 U.S.C. §1401a). The preferred method of appraisement is transaction value, which is defined as “the price actually paid or payable for the merchandise when sold for exportation to the United States,” plus five enumerated additions. 19 U.S.C. §1401a(b)(1). The price actually paid or payable shall be increased by the amounts attributable to the five statutory additions enumerated in 19 U.S.C. §1401a(b)(1)(A) through (E) only to the extent that each such amount is not otherwise included within the price actually paid or payable. 19 U.S.C. §1401a(b)(1). One of the enumerated statutory additions to the price actually paid or payable is an “assist.” An “assist” is defined in 19 U.S.C. §1401a(h)(1) as follows: (1)(A) The term “assist” means any of the following if supplied directly or indirectly, and free of charge or at reduced cost, by the buyer of imported merchandise for use in connection with the production or the sale for export to the United States of the merchandise: (i) Materials, components, parts, and similar items incorporated in the imported merchandise; (ii) Tools, dies, molds, and similar items used in the production of the imported merchandise; (iii) Merchandise consumed in the production of the imported merchandise; (iv) Engineering, development, artwork, design work, and plans and sketches that are undertaken elsewhere than in the United States and are necessary for the production of the imported merchandise. In this case, the resin is to be used as a material to be incorporated into the imported merchandise. However, as stated previously, the importer does not provide the resin material that is used in the production of the bags. Further, the resin is sold directly to the Chinese manufacturer at “full price” by an unrelated U.S. vendor. Therefore, we find that the resin would not be considered an assist in accordance with 19 U.S.C. §1401a(h)(1)(A)(i). HOLDING: 2 Based on the information presented, the resin does not constitute an assist pursuant to 19 U.S.C. §1401a(h)(1)(A)(i), and does not need to be added to the price actually paid or payable of the finished LDPE bags. This ruling does not address the applicability of trade remedies or other additional duties beyond those discussed above. For information on such additional measures, you may consult https://www.cbp.gov/trade. Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.” A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction. Sincerely, Monika R. Brenner, Chief Valuation & Special Programs Branch 3