H316389

 HQ H316389 April 1, 2021 OT:RR:CTF:FTM H316389 TJS CATEGORY: Origin Ms. Beth Hansen Sunrise Global Marketing, LLC 500 S. Main St., Suite 450 Mooresville, NC 28115 RE: Country of Origin of Battery Packs Dear Ms. Hansen: This is in response to your correspondence, dated January 28, 2021, filed on behalf of Sunrise Global Marketing, LLC (“Greenworks Tools”), requesting a binding ruling on the country of origin of certain battery packs imported from China. Our ruling is set forth below. FACTS: The products at issue are battery packs to be used in power tools such as lawnmowers, string trimmers, and chainsaws. Every battery pack includes plastic housing, lithium-ion cells, cell brackets, nickel or copper sheets that connect the cells, electric wires, insulation and protection material, and terminals. Each pack also contains a battery management system, composed of a printed circuit board assembly (“PCBA”) and electronic components, which runs software and coordinates and monitors the electric flow between the lithium-ion cells and compatible tools also manufactured by Greenworks Tools. The lithium-ion cells are designed to store and provide power to the power tools with DC power. When combined with a compatible power tool, the battery pack provides power to the tool through the positive and negative poles, and there is a communication interface which is used to connect the communication between the battery management system and the tool. According to your submission, the battery cells will be produced in China, Singapore, Malaysia, and Korea; the plastic housing will be made in Vietnam; and most of the other components, including the PCBA, the communications board assembly, wiring, wiring harness, nickel or copper sheets, and fasteners will be manufactured in China. The battery packs are assembled in China. The cells are first assembled on the plastic brackets and then welded with the copper or nickel sheets. The battery management system is then assembled by: (1) welding the electronic components onto the PCBA; (2) programing the embedded software; (3) testing the battery management system; and (4) water-proofing treatment by spraying coating. Finally, the battery sub-assembly, the plastic housing, and the insulation material are assembled into the finished battery pack. You state that the assembly process takes approximately 16.75 to 25.87 minutes. ISSUE: What is the country of origin of the subject battery packs? LAW AND ANALYSIS: The marking statute, section 304, 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. Congressional intent in enacting 19 U.S.C. § 1304 was “that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” United States v. Friedlaender & Co. Inc., 27 CCPA 297, 302, C.A.D. 104 (1940). Part 134, Customs Regulations (19 C.F.R. Part 134), implements the country of origin marking requirements and the exceptions of 19 U.S.C. § 1304. Section 134.1(b), Customs Regulations (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. A “substantial transformation” occurs when an article loses its identity and a new and different article emerges from the processing having a distinctive name, character or use. United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 at 270 (1940) (the Court held that imported wood brush block and toothbrush handles which had bristles inserted into them in the United States lost their identity as such and became new articles having a new name, character, and use). In determining whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of the operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 6 C.I.T. 204, 573 F. Supp. 1149 (1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). If the manufacturing or combining process is a minor one that leaves the identity of the imported article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 C.I.T. 220, 542 F. Supp. 1026 (1982). 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). In your submission, you contend that the battery cells are not substantially transformed into battery packs by the operations that take place in China. You argue that the battery cells impart the essential character to the battery packs and no significant change in name, use or character occurs to the battery cells when such assembly occurs. Accordingly, you contend that the country of origin of the assembled battery pack is either China, Singapore, Malaysia, or Korea, depending upon the country of origin of the cells used. For the reasons set forth below, we agree. First, we find that the components, including the battery cells from either China, Singapore, Malaysia, or Korea, 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. The name of the battery cells, as imported, remains the same as in the completed battery packs. As the constitutive components do not lose their individual names as a result of the 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)). Here, we find that the lithium-ion battery cells from either China, Singapore, Malaysia, or Korea impart the “essence” of the finished battery packs. See also, e.g., Headquarters Ruling Letter (“HQ”) H306336 (Feb. 11, 2020); HQ H308831 (Feb. 25, 2020); HQ 561806 (May 9, 2002) (finding that the battery cells provide the “essence” of the finished article). Furthermore, 

The marking statute, section 304, 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. Congressional intent in enacting 19 U.S.C. § 1304 was “that the ultimate purchaser should be able to know by an inspection of the marking on the imported goods the country of which the goods is the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will.” United States v. Friedlaender & Co. Inc., 27 CCPA 297, 302, C.A.D. 104 (1940).Part 134, Customs Regulations (19 C.F.R. Part 134), implements the country of origin marking requirements and the exceptions of 19 U.S.C. § 1304. Section 134.1(b), Customs Regulations (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.A “substantial transformation” occurs when an article loses its identity and a new and different article emerges from the processing having a distinctive name, character or use. United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 at 270 (1940) (the Court held that imported wood brush block and toothbrush handles which had bristles inserted into them in the United States lost their identity as such and became new articles having a new name, character, and use). I