H320695

 HQ H320695 October 21, 2021 OT:RR:CTF:VS H320695 AP CATEGORY: Origin J. Michael Taylor, Esq. Patrick J. Togni, Esq. King & Spalding L.L.P. 1700 Pennsylvania Ave, N.W. Suite 200 Washington, D.C. 20006-4707 RE: Country of origin; Electronic Cigarette Cartomizer; Section 301 Trade Remedies Dear Mr. Taylor and Mr. Togni: This is in response to your September 15, 2021 request for a binding ruling, on behalf of [X] (the “importer”), regarding the country of origin of certain electronic cigarette cartomizer (“cartomizer”) for purposes of Section 301 trade remedies under two proposed scenarios. The importer has asked that certain information submitted in connection with this ruling be treated as confidential. Inasmuch as this request conforms to the requirements of 19 C.F.R. § 177.2(b)(7), the request for confidentiality is approved. The information contained within brackets in this ruling or in the attachments to the ruling request, forwarded to our office, will not be released to the public and will be withheld from published versions of this ruling. FACTS: The subject electronic cigarette cartomizer will be comprised of the following components: e-liquid from [X] (“Country A”) (in the future, the e-liquid may be sourced from [X] (“Country B”)), plastic cartomizer holder tap manufactured in Country B through a plastic injection molding process using Chinese-origin resin, silicone pieces from Country B using resin from Country B (or from China in the case of an extreme weather event or plant disaster using resin from China), plastic cartomizer tube from Country B using resin from Country A (or from China in the case of an extreme weather event or plant disaster using resin from Country A), plastic heater top cover from Country B (or from China in the case of an extreme weather event or plant disaster using resin from Country A), plastic heater holder from Country B (or from China in the case of an extreme weather event or plant disaster using resin from Country A), ceramic resistance heating element (also known as a heater component or heating element) from Country B (scenario 1) or from China (scenario 2), metal thimbles from China, and metal cartomizer bottom cover from China. The heating element will consist of the following input materials: electronic slurry, ceramic matrix, and nickel wire. The electronic slurry and nickel wire together are the most expensive materials of the final cartomizer according to the bills of materials. The individual components will create subassemblies in Country B, and the final assembly will take place in Country B. The cartomizer tube from Country B and a piece of silicone from Country B will form the cartomizer’s storage module, which stores the e-liquid and delivers it to the heater module. The cartomizer holder tap from Country B along with a piece of silicone from Country B, the cartomizer tube from Country B, the heater top cover from Country B, the heater holder from Country B, and bottom cover from China will form the puffing module, which allows to transmit vapor atomized by the heater module to the user’s mouth through the central air pipe. Silicone pieces from Country B, the heater top cover from Country B, the ceramic resistance heating element from Country B (scenario 1) or from China (scenario 2), the heater holder from Country B, and the thimbles from China will form the heater module, which allows for the atomization of the e-liquid transported by the storage module after the finished cartomizer is placed into a separate power unit vaping device with a battery. Under scenario 1, the heating element will be manufactured in Country B. All aspects of the manufacture of the heating element will occur in Country B except for the ceramic matrix produced in China. In Country B, dry mix will be combined with water to create an electronic slurry. The electronic slurry will be screen printed onto the surface of the ceramic matrix. Heating wires will be inserted through the electronic slurry into preformed holes in the ceramic matrix. The electronic slurry will be bonded with the ceramic matrix and nickel wires. Anchor wires will be applied to the block surface. Under scenario 2, the heating element will be manufactured in China and imported into Country B to be incorporated into the heater subassembly and the cartomizer full assembly. In Country B, under both scenarios, the heating element with two nickel wires will be assembled with silicone and the nickel wires will be cut to length. The thimbles will be installed into the heater holder hole and silicone will be connected to the heater holder. The heater top cover will be assembled with the heating element. The parts will be combined and aligned, and the thimbles will be punched into place. A drop of e-liquid will be applied to prime the ceramic and prevent dry-out. After adding more silicone, the heater subassembly will be complete. The filling portion of the assembly process in Country B will involve loading the cartomizer tube into a feeding mechanism, injecting e-liquid into the cartomizer tube, pressing the heater subassembly into the cartomizer tube, assembling the cartomizer bottom cover to the heater subassembly, combining the cartomizer holder tap with the silicone, and pushing the cartomizer holder tap with silicone onto the cartomizer tube. The final step will be the packaging of the finished cartomizer in Country B. The importer asserts that the country of origin under both scenarios is Country B because the heating element is not the essence of the final cartomizer but is only one part of the final heater module/subassembly, which will be further manufactured with the other components in Country B. According to the importer, the manufacturing process in Country B is complex, involving the manufacture of components into subassemblies and then the cartomizer final assembly whereby the components purportedly lose their individual identities while becoming a new and distinct article of commerce with a new name, character, and use. ISSUE: What is the country of origin for the cartomizer under the two scenarios presented? LAW AND ANALYSIS: The U.S. Trade Representative (“USTR”) has determined that an additional ad valorem duty will be imposed on certain Chinese imports pursuant to its authority under Section 301(b) of the Trade Act of 1974. The Section 301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter III, U.S. Note 20(f), Harmonized Tariff Schedule of the United States (“HTSUS”). When determining the country of origin for purposes of applying trade remedies under Section 301, the substantial transformation analysis is applicable. 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. Texas Instruments, Inc. v. United States, 69 CCPA 151, 681 F.2d 778 (1982). In order to determine whether a substantial transformation has occurred, U.S. Customs and Border Protection (“CBP”) considers the totality of the circumstances and makes such determinations on a case-by-case basis. CBP has stated that a new and different article of commerce is an article that has undergone a change in commercial designation or identity, fundamental character, or commercial use. A determinative issue is the extent of the operations performed and whether the materials lose their identity and become an integral part of the new article. This determination is based on the totality of the evidence. See Nat’l Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). In determining whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of operations performed and whether the components lose their identity and become an integral part of the new article. See Belcrest Linens v. United Stat

The U.S. Trade Representative (“USTR”) has determined that an additional ad valorem duty will be imposed on certain Chinese imports pursuant to its authority under Section 301(b) of the Trade Act of 1974. The Section 301 measures apply to products of China enumerated in Section XXII, Chapter 99, Subchapter III, U.S. Note 20(f), Harmonized Tariff Schedule of the United States (“HTSUS”).When determining the country of origin for purposes of applying trade remedies under Section 301, the substantial transformation analysis is applicable. 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. Texas Instruments, Inc. v. United States, 69 CCPA 151, 681 F.2d 778 (1982). In order to determine whether a substantial transformation has occurred, U.S. Customs and Border Protection (“CBP”) considers the totality of the circumstances and makes such determinations on a case-by-case basis. CBP has stated that a new and different article of commerce is an article that has undergone a change in commercial designation or identity, fundamental character, or commercial use. A determinative issue is the extent of the operations performed and whether the materials lose their identity and become an integral part of the new article. This determination is based on the totality of the evidence. See Nat’l Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993).In determining whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of operations performed and whether the components lose their identity and become an integral part of the new article. See Belcrest Linens v. United States, 6 CIT 204, 573 F. Supp. 1149 (1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). Assembly operations that are minimal or simple, as opposed to complex or