The country of origin and applicability of the United States- Korea Free Trade Agreement (UKFTA) of a plastic shipping box

N346907
April 4, 2025
OT:RR:NC:N5:137
CATEGORY: Origin, Trade Agreement Hyomi Kwon Job 121 Customs Brokerage Inc 185 Great Neck RD, STE 468 Great Neck, NY 11021 RE: The country of origin and applicability of the United States- Korea Free Trade Agreement (UKFTA) of a plastic shipping box Dear Ms. Kwon: In your letter dated March 18, 2025, you requested a country of origin and applicability of the UKFTA determination ruling on behalf of your client, AJ Logisvalue USA, Inc. The product under consideration is referred to as RC4 Ass’y. It consists of a guide top, sleeve, and guide bottom, which together form a box that includes a tray insert for holding battery cells. The Chinese origin guide top, sleeve and guide bottom are shipped together from China to Korea. The tray insert is manufactured in Korea. The guide top, sleeve and guide bottom constitute an unassembled box. In Korea, the guide top, sleeve and guide bottom are combined via a simple assembly process. The tray is also incorporated into the finished box via simple assembly. When determining the country of origin for purposes of applying current trade remedies under Section 301, the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling Letter H301619, dated November 6, 2018. The test for determining whether a substantial transformation will occur 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. See Texas Instruments Inc. v. United States, 681 F.2d 778 (C.C.P.A. 1982). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). The components undergo a simple assembly process in Korea. It is the opinion of this office that this assembly does not constitute a substantial transformation. Therefore, the country of origin of the box will be China. You also requested a determination regarding the applicability of the United States- Korea Free Trade Agreement (UKFTA).

General Note 33, Harmonized Tariff Schedule of the United States (HTSUS), sets forth the criteria for determining whether a good is originating under the UKFTA. General Note 33(b), HTSUS, states, in pertinent part, as follows: For the purposes of this note, subject to the provisions of subdivisions (c), (d), (n) and (o) thereof, a good imported into the customs territory of the United States is eligible for treatment as an originating good of a UKFTA country under the terms of this note if– (i) the good is wholly obtained or produced entirely in the territory of Korea or of the United States, or both; (ii) the good is produced entirely in the territory of Korea or of the United States, or both, and-- (A) each of the non-originating materials used in the production of the good undergoes an applicable change in tariff classification specified in subdivision (o) of this note; or (B) the good otherwise satisfies any applicable regional value-content or other requirements set forth in such subdivision (o); and satisfies all other applicable requirements of this note and of applicable regulations; or (iii) the good is produced entirely in the territory of Korea or of the United States, or both, exclusively from materials described in subdivisions (i) or (ii), above. For the purposes of this note, the term “UKFTA country” refers only to Korea or to the United States. GN 33 (o)/ Chapter 39 states: 2. A change to headings 3916 through 3926 from any other heading. The applicable subheading for the plastic shipping box as imported to the United States will be 3923.10.9000, HTSUS, which provides for articles for the conveyance of packing of goods, of plastics: boxes, cases, crates and similar articles: other. The Chinese origin guide top, sleeve and guide bottom shipped to Korea together form an unfinished box, classified in subheading 3923.10, HTS. If shipped separately from China to Korea, the Chinese origin guide top would be classified in subheading 3923.50, HTS, the sleeve in subheading 3923.90, HTS, and the guide bottom in subheading 3923.90, HTS. The non-originating goods do not undergo an applicable change in tariff classification per GN 33 (b) (ii) (A); therefore, the merchandise does not qualify for preferential treatment under the United States-Korea Free Trade Agreement. Effective March 4, 2025, pursuant to U.S. Note 2(u) to Subchapter III, Chapter 99, all products of China and Hong Kong as provided by heading 9903.01.24, HTSUS, other than products classifiable under headings 9903.01.21, 9903.01.22, and 9903.01.23, HTSUS, will be subject to an additional 20 percent ad valorem rate of duty. At the time of entry, you must report the applicable Chapter 99 heading, i.e. 9903.01.24, in addition to subheading 3923.10.9000, HTSUS, listed above.

Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 3923.10.9000, 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 subheading 3923.10.9000, HTSUS, listed above. 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, including information on exclusions and their effective dates, 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/programs-administration/trade-remedies, respectively. 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. Additionally, we note 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, please contact National Import Specialist Christina Allen at [email protected].
Sincerely,
Steven A. Mack Director National Commodity Specialist Division