H309485

HQ H309485 August 12, 2020 OT:RR:CTF:VS H309485 JW CATEGORY: Origin Mr. Richard A. Mojica Miller & Chevalier Chartered 900 16th Street NW Washington, DC 20006 RE: Reconsideration of NY N306055; Country of Origin of Battery Rack System; Section 301 Trade Remedy Dear Mr. Mojica: This is in response to your request for reconsideration of New York Ruling Letter (“NY”) N306055 issued on September 27, 2019. Your request for reconsideration, dated February 27, 2020, is filed on behalf of your client LG Chem, Ltd. (“LG Chem”). In addition, on May 19, 2020, we had an oral discussion with you, and following the oral discussion, on June 5, 2020, you submitted a supplement to your request. NY N306055 found that the manufacturing process in Korea did not result in a substantial transformation of the battery cells from China and that the country of origin of the Battery Rack System was China. You argue that the country of origin of the Battery Rack System is the Republic of Korea. We reviewed your request for reconsideration and have determined that NY N306055 is correct for the reasons set forth herein. The merchandise at issue is a certain Battery Rack System, Model No. ERT54B22CN21, which is a lithium-ion, cabinetized battery system. You state that the Battery Rack System is designed for incorporation into a “grid-scale” Energy Storage System (“ESS”). Each Battery Rack System is custom-made for a purchaser, and final assembly typically occurs at the purchaser’s site. Purchasers of the Battery Rack System are typically operators of renewable power plants or power grids. The Battery Rack System incorporates hundreds of components and consists of at least four main subassemblies: the Battery Modules, the Battery Racks, the Battery Protection Units, and the Battery Management System (which consists of the Master Battery Management System, the Rack Battery Management System, and the Module Battery Management System). The two main subsystems of the Battery Rack System consist of the following: One or more cabinets containing battery modules (i.e., ‘Battery Racks’), which are connected in parallel. The Battery Racks charge, discharge, and store power under the control of the Battery Management System. Each Battery Rack contains twenty-two Battery Modules connected in series. Each Battery Module contains fifty-six lithium-ion Battery Cells. Each Battery Rack contains 1,232 lithium-ion Battery Cells (LG Chem’s JH4 battery cell model). The Battery Racks also have several other subassemblies and components, including: Battery Protection Units (“BPUs”), which are protection circuits embedded in each Battery Rack that control charge and discharge to prevent electric shock. BPUs are assembled from terminal blocks, fans, fuses, and other components. Charging and Discharging System, which includes cables, positive and negative terminals, and other connectors that transmit power and data from each BPU to the Battery Modules within a single Battery Rack, as well as busbars that transmit charge and discharge between the Battery Cells within each Battery Module. Battery Rack Frame and Housing, which are racks, panels, and protective housing for the Battery Racks and Battery Modules including the fans that provide cooling to each Battery Module. Built-in hardware, firmware, and software (i.e., a ‘Battery Management System’). The Battery Management System includes proprietary hardware and software that collects data from each Battery Rack. It calculates the charge/discharge power limit value and controls the charge/discharge for the entire system. The Battery Management System performs functions such as renewable integration, peak shifting, and frequency regulation. The Battery Management System performs these functions through PCBAs with proprietary firmware and software, which are embedded in the Battery Modules and Battery Racks. The Battery Management System includes a number of parts: The Master Battery Management System (“Master BMS”) that (a) receives data on diagnostic information; processes the data to manage charge and discharge and prevent overheating; and (b) sends control signals to the other components of the Battery Management System. The Master BMS is configured for the Battery Racks but not physically incorporated into the Battery Racks. Depending on the number of Battery Racks managed by the Master BMS, a Battery System Controller (“BSC”) and/or a Bank Battery Management System (“Bank BMS”) may be used as the Master BMS. The Rack Battery Management System (“Rack BMS”) and a Module Battery Management System (“Module BMS”). The Module BMS (a) collects diagnostic information directly from the battery cells; (b) transmits the data back to the Master BMS; and (c) executes control signals received from the Master BMS. The Bank BMS and Rack BMS communicate and process data and control signals to and from the Master BMS. The Rack BMS and the Module BMS are physically incorporated into the Battery Racks. You state that all of components of the Battery Management System originate in Korea, except for the Battery Cells, which originate in China. All assembly of components into subassemblies occurs in Korea. The assembly process for the Battery Cells, the Battery Modules, the Battery Racks, the BPUs, the Battery Management System, and the final Battery Rack System is discussed below. The Battery Cells are produced at LG Chem’s facilities in China. The Battery Cells used in the Battery Rack System are LG Chem’s JH4 Lithium-ion Battery Cells. In summary, the production process for the Battery Cells is as follows: Cathodes and anodes are rolled; Cathodes and anodes are laminated; Laminated cathodes and anodes are stacked; An electrolyte is inserted to connect the cathodes and anodes; Positive and negative terminals are inserted into aluminum pouch; Laminated cathodes and anodes are vacuum packed into an aluminum pouch, creating first recognizable “Battery Cell”; Battery Cell is activated or “aged”; Battery Cell is degassed; Battery Cell is tested; Battery Cell is packed for storage and/or shipment. After the Battery Cells are produced in China, they are shipped to LG Chem’s manufacturing facilities in Korea, and all subsequent processing happens in Korea. A summary of the production process of the Battery Module is provided below: Battery Cells are unpacked from storage/shipment, visually inspected, and cleaned; Each Battery Cell is placed inside a plastic cartridge; [XXX] plastic cartridges (each with [XX] Battery Cell) are stacked [XXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] as a “Cell Module Assembly” (“CMA”); The CMA is inspected; Busbar assemblies are fastened to CMA, [XXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXX]; Battery Cell positive and negative terminals [XXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXX] connect [XXXX] to attached busbar assemblies; [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXX]; [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]; [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]; [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]; Sensing cables are attached to busbars [XXXXXXXXXXXXXXXXX]; [XXXXXXXXXXXXXXXXXXXXXXXXXXXXX]; [XXXXXXXXXXXXXXXXXXXXXXXXX]; Thermistors are inserted [XXXXXXX]; The front cover assembly, which includes a front plate assembly, power terminal assembly, cooling fan assembly, and Module BMS, is attached to the front of the Battery Module The top plate, side covers, and rear covers are attached to the Battery Module; The Battery Module is tested by machine, and packed for storage/shipment with four Battery Modules per box. In parallel to the production of the Battery Modules, the BPUs are also produced in Korea. The production process for the BPU is summarized below: Battery terminal blocks and a fan are affixed to the front plate of BPU; Emergency stop mechanism is affixed to the front plate of BPU; Front plate is affixed to bottom plate; Power cables are connected to terminal blocks; [XXXXXXXXXXXXXXXXXXXXX

is applicable. 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). LG Chem asserts that the country of origin of the Battery Rack System for purposes of Section 301 trade remedies is the Republic of Korea, and not the People’s Republic of China. For the reasons provided below, we disagree.First, LG Chem argues that the Battery Cells lose their individual names and are not called cells when combined with other components to make the battery modules and later become indistinguishable in name from the final product. LG Chem cites HQ H303529 for support that a change in name has occurred; however, while HQ H303529 found that substantial transformation of the print axis occurred in China, there was no separate analysis regarding a change in name. Rather, we note Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308, 1322 (2016) where the plaintiff argued “that none of Energizer’s articles are called ‘flashlight’ at the time of importation” and hence a change in name had occurred. Id. The Court disagreed and stated “[t]he issue is not whether Plaintiff imported approximately fifty ‘flashlights,’ but rather whether the Plaintiff’s imported components retained their names after they were assembled into the Generation II flashlight. Thus, the proper query would be whether the . . . components would still be called by their pre-importation name after assembly into the finished flashlight, or whether they would be indistinguishable in name from the finished product.” Id. The Court found th