H308831

HQ H308831 February 25, 2020 OT:RR:CTF:VS H308831 JW CATEGORY: Origin Ms. Laura S. Rabinowitz Greenberg Traurig, LLP 200 Park Avenue New York, NY 10166 RE: Country of Origin of Certain Battery Packs Dear Ms. Rabinowitz: This is in response to your letter dated September 13, 2019, on behalf of your clients Positec USA, Inc. (“Positec”) and RW Direct, Inc. (“RW”), in which you requested a ruling from U.S. Customs and Border Protection (“CBP”), pursuant to 19 C.F.R. part 177, regarding the country of origin of certain battery packs. In addition, in response to a letter from CBP for additional information, on November 12, 2019, you submitted a revised ruling request. FACTS: The articles in question are Worx 20V battery packs; specifically with the following model numbers: Worx 20V 1.5Ah battery – WA3520; Worx 20V 2.0Ah battery – WA3525; Worx 20V 2.0Ah battery – WA3575; Worx 20V 2.5Ah battery – WA3577; Worx 20V 4.0Ah battery – WA3578; Worx 20V 5.0Ah battery – WA3579; and Worx 20V 6.0Ah battery – WA3671. Worx 20V battery packs are designed to provide power to Worx 20V Powershare power tools (e.g., cordless drills and cordless saws) with DC power, and other outdoor power equipment (e.g., cordless leaf blowers and cordless grass trimmers). These packs can be recharged using Worx branded chargers. With the exception of the battery cells of the Model, Worx 20V 6.0Ah battery (WA3671), which are from Singapore; the battery cells of the rest of the Worx 20V batteries are from Malaysia. The remaining components that make up the Worx 20V battery packs are all from China. Among these components is a circuit board that “provides battery pack information to the tool and charger including: maximum discharge current, maximum charging current, operating temperature range and protection, under-voltage reporting and protection, overvoltage reporting and protection, displays the remaining capacity of the battery pack when indicator button is pressed.” Revised Ruling Request at 3. Final assembly of the Worx 20V battery packs also occurs in China. The assembly process is generally described as follows: The battery cells are connected by metal connecting pieces such as alloy copper tape or nickel tape. The metal connecting pieces are attached to the outer ends of the battery cells using a mash welding process. The circuit board is plate welded to the joined battery cells. Other battery pack components (e.g., positive and negative connection plates) are assembled onto the joint battery cells. Insulating electronic sealant is applied to the circuit board and wire connections. The joined battery cells are installed into the outer shell. The outer shell includes the upper and lower housing, gasket, spring, button, screws and labels. ISSUE: What is the proper country of origin marking for the battery packs according to 19 C.F.R. Part 134? LAW AND ANALYSIS: Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that, unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article. The country of origin marking requirements are set forth in Part 134, Customs Regulations (19 C.F.R. Part 134). 19 C.F.R. § 134.1(b) defines “country of origin” as 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 the marking laws and regulations. The test for determining whether a substantial transformation has occurred 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, 69 C.C.P.A. 151 (1982); see also Belcrest Linens v. United States, 741 F.2d 1368, 1372 (Fed. Cir. 1984). 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). Positec and RW assert “the battery cells do not undergo a transformation in China.” Revised Ruling Request at 4. Positec and RW conclude that the country of origin of the battery packs should be the country of origin of the battery cells. Ruling Request at 2. For the reasons below, we agree. First, we find that the components, including the battery cells from either Malaysia or Singapore, do not undergo a change in name when they are assembled into a battery pack in China. The name of each article, as imported, remains the same as that article in the completed battery pack. See e.g., National Hand Tool, 16 C.I.T. at 311. As the constitutive components do not lose their individual names as a result of the post importation assembly in China, no name change has occurred. Turning to character, we find that there is no change in character as a result of the assembly process in China. For courts to find a change in character, there often needs to be a substantial alteration in the characteristics of the articles or components. See e.g., National Hand Tool, 16 C.I.T. at 311. Courts have not found a change in character when the “form of the components remained the same.” Id. In other cases, courts have looked to the “essence” of a completed article to determine whether an imported article has undergone a change in character as a result of post importation processing. Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308, 1318 (2016) (citing Uniden America Corp. v. United States, 120 F. Supp. 2d 1091, 1095-1098 (2000) and Uniroyal, Inc. v. United States, 3 C.I.T. 220 aff’d, 702 F.2d 1022 (Fed. Cir. 1983)). “The term ‘character’ is defined as ‘one of the essentials of structure, form, materials, or function that together make up and usually distinguish the individual.’” Uniden Am. Corp., 120 F. Supp. 2d at 1096 (citation omitted). Here, we find that the battery cells from either Malaysia or Singapore impart the “essence” of the finished battery packs. See also e.g., HQ H563045, HQ H561806, and HQ H704711 (finding that the battery cells provide the “essence” of the finished article). While the circuit board provides battery pack information to the tool and charger, the battery packs are used to provide power to tools and outdoor equipment. This “power” is stored in the battery cells. Indeed, as noted, “[w]hen imported to China, each discrete battery cell is complete and operational. Each cell [ ] can store and provide power in its imported condition.” Revised Ruling Request at 3. The assembly process in China does not change the shape or material composition of the battery cells. The battery cells are simply held together as an aggregate product after the assembly process in China; hence we find that there is no change in character as a result of the assembly process in China. In addition, we find that the battery cells from Malaysia or Singapore do not undergo a change in use as a result of the assembly process in China. In looking at whether there is a change in use, courts have found that a change in use has occurred when the end use of the imported product was no longer interchangeable with the end use of the product after post importation processing; in contrast, when the end use was predetermined at the time of importation, courts have generally not found a change in use. Energizer Battery, 190 F. Supp. 3d at 1319 (citing Ferrostaal Metals Corp. v. United States, 664 F. Supp. 535, 540-41 (1987); National Hand Tool, 16 C.I.T. at 311-12; Ran-Paige Co., Inc. v. United States, 35 Fed. Cl. 117, 121-22 (1996); Uniroyal, 3 C.I.T. at 226). “When articles are imported in prefabricated 

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that, unless excepted, every article of foreign origin imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to the ultimate purchaser in the United States the English name of the country of origin of the article. The country of origin marking requirements are set forth in Part 134, Customs Regulations (19 C.F.R. Part 134). 19 C.F.R. § 134.1(b) defines “country of origin” as 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 the marking laws and regulations.The test for determining whether a substantial transformation has occurred 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, 69 C.C.P.A. 151 (1982); see also Belcrest Linens v. United States, 741 F.2d 1368, 1372 (Fed. Cir. 1984). 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). Positec and RW assert “the battery cells do not undergo a transformation in China.” Revised Ruling Request at 4. Positec and RW conclude that the country of origin of the battery packs should be the country of origin of the battery cells. Ruling Request at 2. For the reasons below, we agree.First, we find that the components, including the battery cells from either Malaysia or Singapore, do not undergo a change in name when they are assembled into a battery pack in China. The name of each article, as imported, remains t