The country of origin of paper gift bags

N312721 July 15, 2020 MAR-2-48:OT:RR:NC:1:130 CATEGORY: Country of Origin Ms. Rebecca Kirk Ascent Global International, LLC dba Ascent Global Logistics 100 East Royal Lane, Suite 224 Irving, TX 75039 RE: The country of origin of paper gift bags Dear Ms. Kirk: In your letter, dated June 5, 2020, you requested a binding country of origin ruling on behalf of your client, Jeanmarie Creations, LLC. Product information was submitted for our review. No product samples were received. Your request concerns the country of origin of decorative paper gift bags. You describe a scenario wherein portions of manufacturing take place in South Korea, China, and Vietnam. You indicate that white paper (bag bodies) and card stock (gift tags) will be manufactured and cut into rectangular sheets in S. Korea and China. Additionally, reinforced paperboard (bag handle and bottom support) is produced and cut into sheets in S. Korea. The completed bags will incorporate either twisted paper or synthetic fiber macramé handles, manufactured in China and Vietnam, respectively. The glue used for bag assembly and decoration is manufactured in China. Films that will be laminated onto the paper prior to bag manufacturing will also be manufactured in China. In Vietnam, the white and card stock papers are printed, laminated, and/or decorated (glitter, foil, embossing, etc.) before being die-cut into gift tag and unassembled bag shapes. The die-cut paper is then joined with the reinforced paperboard pieces in a machine processing operation wherein the bags are formed, folded, glued, and punched. Next, the twisted paper handles are attached to the bags, or, the macramé handles are hand-threaded through the punched holes. Before attachment, one macramé handle is threaded throught the punched gift tag. The handles are then secured, and the finished bags are packaged. Section 134.1(b) of the Customs Regulations (19 CFR 134.1(b)) provides that the "[c]ountry 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 Part 134, Customs Regulations (19 CFR Part 134). Substantial transformation requires that "[t]here must be a transformation; a new and different article must emerge, ‘having distinctive name, character, or use.’" Anheuser-Busch Brewing Association v. United States, 207 U.S. 556, 28 S. Ct 204 (1908). We must therefore determine if or where a substantial transformation of materials occurs in order to determine country of origin. Customs has long ruled that the cutting of material to shape constitutes a substantial transformation. Fabric yardage, for example, is substantially transformed when cut into garment pieces; the country where the cutting takes place is the country of origin. See HQ rulings 083461 (May15, 1990), 555189 (June 12, 1989), 554027 (January 13, 1987), 554025 (December 16.1986), amongst others. We find that die-cutting the sheet paper into to shapes that are ready to be folded into bags 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 completed gift bags is Vietnam. The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. You should also be aware that the material facts described in the foregoing ruling may be subject to periodic verification by CBP. 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