The country of origin of packing materials

N308301 January 9, 2020 MAR-2-48:OT:RR:NC:1:130 CATEGORY: Country of Origin Mr. Clifford Chi Hampton Products International Corporation 50 Icon Foothill Ranch, CA 92610 RE: The country of origin of packing materials Dear Mr. Chi: In your letter, dated December 12, 2019, you requested a binding country of origin ruling. Product information and photos were submitted for our review. Your request concerns the country of origin of paperboard blister card packaging identified as “Trap Blister Card Set for HPI 162-42051”. You describe a scenario wherein paperboard is manufactured and coated with a heat-sealing adhesive in the United States. The coated sheets or rolls of paperboard are shipped to China, where they are printed and cut to shape. The cutting results in two pieces – a front piece and a back piece - that have the same arched outer profile. The piece forming the back of the blister pack is color printed on the front and printed with product information and instructions on the back. The piece has a die-cut square opening that will be positioned over the contents, and an opening at the top for suspending the final package on a retail hanging rack. The piece forming the package front is color printed with brand and product information, has a die-cut opening specially fitted for the plastic blister, and at the top, has the same opening for suspending on a retail hanging rack. The cut and printed cards will then be shipped back to the United States where they will be combined with plastic blister. In your request, you argue at length that the cutting and printing operations occurring in China are insufficient to constitute a substantial transformation of the paperboard. We disagree. You contend that the cut paperboard packaging is not distinctive in character or use from the paperboard sheets or rolls. Printed and cut-to-shape packaging, however, is significantly different from sheets or rolls of paper. They are, in fact, classifiable in different headings of Chapter 48, Harmonized Tariff Schedule of the United States (HTSUS). The adhesive-coated paperboard is classifiable in heading 4811 as coated paperboard, while the die-cut, printed pieces would be classifiable in heading 4823 as “Paperboard cut to size or shape.” The paperboard sheets or rolls are multiuse material that are not yet dedicated for any specific purpose. The printed, cut-to-shape pieces are clearly dedicated for the packaging of a specific retail item. In your request, you also reference Headquarters (HQ) ruling W967997 as justification for your contention that printing and cutting paper to shape do not constitute a substantial transformation. However, your use of this ruling is not appropriate for consideration of the instant goods. Ruling HQ W967997 states that master rolls of tissue paper are printed and cut to rectangular pieces that are packaged for retail sale. You disregard that, in this ruling, the product begins as tissue paper and is completed as tissue paper. Neither the printing nor the sizing changes the identity of the product from tissue paper to a new and different product. The blister card set, however, is packaging that is printed and cut to a specific shape for a specific use and is no longer merely ordinary paperboard. You also assert that “(t)he application of ink and cutting to a particular shape and size are merely cosmetic and the characteristic of the paperboard card remains the same.” However, Customs has long ruled that the cutting of material to shape constitutes a substantial transformation. For instance, by your assertion, fabric sheet and cut-to-shape fabric pieces would be only cosmetically different, as both are fabric. Yet, Customs’ substantial ruling history on garment origin contradicts this (see HQ rulings 083461 (May15, 1990), 555189 (June 12, 1989), 554027 (January 13, 1987), 554025 (December 16.1986), amongst others). We find that the cutting to shape of paperboard packaging pieces is analogous to the cutting to shape of fabric garment pieces. Therefore, the country in which the cutting to shape takes place is the country of origin. The country of origin of the printed, cut-to-shape, paperboard, blister packaging cards is China. Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under heading 4823, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty.  At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to the correct subheading. The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading.  For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china respectively. 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 Laurel Duvall at laurel.duvall@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division