The country of origin of paper gift bags

N333537 July 11, 2023 MAR-2-48:OT:RR:NC:N1:130 CATEGORY: Country of Origin Mr. Frank Saviano Agra-Services Brokerage Co. 221-20 147th Ave. Jamaica, NY  11413 RE:      The country of origin of paper gift bags Dear Mr. Saviano: In your letter, dated June 14, 2023, you requested a binding country of origin ruling on behalf of your client, United Paper & Craft LLC.  Product information and samples were submitted for our review.  Your request concerns the country of origin of two decorative paper gift bag items, style numbers UP2060 and UP2023.  Item UP2060 is a gift bag constructed of printed, scored paperboard, making it more rigid than a standard gift bag.  It is packaged flat and partially assembled, and is then folded to final shape by the consumer.  The bag is gusseted like a standard gift bag. Item UP2023 is a package of three printed standard gift bags.  In your letter, you outline the manufacturing of item UP2023.  You describe a scenario wherein portions of manufacturing take place in the United States, China, Korea, Malaysia, and Vietnam.  Graphic design is completed in the U.S.  You indicate that the cardstock for the bag gift tags is made in China, the paper stock for the bag is from Korea, and the stabilizing paperboard for the bottom of the bag is from Malaysia.  The foil, glitter, handle, and glue are all from China.  You state that the raw paper stock is cut, printed, foil stamped, decorated with glitter, and laminated in China.  The gift tags will also be printed in China.  The bag paper will be precision cut to rectangular shape, assembled into gift bags (either folded by hand or by bag-forming machinery), and glued in Vietnam.  In Vietnam, holes will be punched for the handles and the handles will be attached.  The stabilizing bottom board will also be cut to length and width and inserted in Vietnam.  The retail tag will be printed, die-cut, and stapled in Vietnam. You do not outline the manufacturing steps for item UP2060, except to say that it is made in a similar manner as item UP2023.  We recognize that the two products are made differently, as the paperboard for item UP2060 is die-cut to shape and there is no stabilizing board used.  You state that the paperboard is die-cut to shape in Vietnam.  Section 134.1(b) of the Customs and Border Protection 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 and Border Protection 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. For item UP2023, the paper is cut to specific dimensions, folded, glued, punched, and fitted with handles in Vietnam.  The totality of these operations constitutes a substantial transformation.  See HQ 961241 (September 16, 1998).  Therefore, the country of origin of item UP2030 is Vietnam.  For item UP2060, the consideration is different.  U.S. Customs and Border Protection (CBP) 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 paperboard 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.  Therefore, the country of origin of item UP2060 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 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 and Border Protection 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