H331104

HQ H331104 September 6, 2024 OT:RR:CTF:FTM H331104 BJK CATEGORY: Origin Ms. Suzanne Kane Akin Gump Strauss Hauer & Feld LLP 2001 K Street NW Washington, D.C. 20006 RE: Country of Origin of High Field High-Temperature Superconducting Tape Dear Ms. Kane: This is in response to your request, on behalf of Commonwealth Fusion Systems LLC, (“CFS” or “Requestor”) dated March 8, 2023, for a binding ruling regarding the country of origin of a high field high-temperature superconducting tape (“HTS tape”). The request is a resubmission of previous ruling requests that pertained to the HTS tape subject to this ruling and that were returned for additional information. This request was forwarded by the National Commodity Specialist Division to our office for a response. In arriving at our determination set forth below, we considered the information submitted in the ruling request and additional information submitted via e-mail. You have 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 in the attachments to the ruling request will not be released to the public and will be withheld from published versions of this ruling. FACTS: CFS describes the HTS tape as consisting of thin-rolled, nickel alloy-based strips that perform a key role in high field high-temperature superconducting magnets, which are in turn integrated into a fusion reactor. At cryogenic temperatures, the HTS tape gives the high-temperature superconducting magnets their magnetic properties, allowing a fusion reactor to be significantly smaller than devices based on other magnet technologies. Requestor indicates that the HTS tape consists of several layers: a copper layer, a Hastelloy C276 (“Hastelloy”) layer, a rare-earth barium copper oxide (“ReBCO”) layer, a silver layer, and a buffer stack of magnesium oxide. Of these materials, Requestor explains that the Hastelloy layer constitutes the greatest material by weight and thickness and that this layer is critical for the production and use of the HTS tape. The Hastelloy layer acts as a substrate, which Requestor states is the only substrate suitable for use in high field HTS tape because a weaker base material would not sustain itself and would rip itself apart when used in a high field high-temperature superconducting magnet. Requestor contends that the Hastelloy layer and its tungsten threshold enables crystal formation and the proper orientation of the subsequent layers added in Japan or an unidentified third country. Further, CFS notes that the Hastelloy layer provides the strength, thickness, stiffness, magnetic permeability, and room temperature electrical conductivity that is required for the final application in high-temperature superconducting magnets. With respect to the HTS tape’s components, only the ReBCO layer enables the HTS tape to perform at cryogenic temperatures. The ReBCO layer contains cryogenic superconductive properties that Requestor explains as zero electrical resistivity at certain cryogenic temperatures. According to Requestor, the addition of the ReBCO layer enables the HTS tape be used in magnets at different temperatures. While the Hastelloy layer is produced in the United States, the ReBCO layer, as well as the silver layer and magnesium oxide buffer stack, are produced and added to the Hastelloy layer in Japan or an unidentified third country. Requestor outlines the following manufacturing steps involved in the production of the HTS tape, including the country in which each step occurs: First, scrap Hastelloy of U.S. origin is melted into large batches of bulk Hastelloy in the United States. Large melts of bulk Hastelloy are poured and the bulk Hastelloy undergoes a multicycle rolling and annealing process through which it is rolled into coils of industry standard dimensions in the United States. Through testing and screening, the bulk Hastelloy is qualified for use in high field HTS tape in the United States. Finally, in the United States, the Hastelloy is slit into narrow strips, before being exported to Japan or an unidentified third country for further processing. In Japan or an unidentified third country, a thin layer of magnesium oxide ceramic is deposited on the Hastelloy base layer. It is then coated with a second layer of a ceramic, which contains ReBCO. The product is then sealed with a super-thin layer of silver to prevent contamination of the ReBCO layer. The now-coated product is inserted into an oven containing oxygen. In the oven, the product undergoes an oxygenation process that gives the product, specifically the ReBCO layer, the capacity to function as a superconductor at cryogenic temperatures. Still within Japan or an unidentified third country, the now oxidized product undergoes finishing steps, including additional slitting and the application of a thin silver layer and thin copper layer. The product, as finished in Japan or an unidentified third country, is then exported back to the United States, where it is commercially available as high field HTS tape. ISSUE: What is the country of origin of the HTS tape? LAW AND ANALYSIS: The marking statute, section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that unless excepted, every article of foreign origin (or its container) imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to an 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 markings on the imported goods the country of which the good is the product. The evident purpose is to mark the goods so that at the time of purchaser 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., 27 C.C.P.A. 297, 302 C.A.D. 104 (1940). Part 134 of the U.S. Customs and Border Protection (“CBP”) Regulations (19 C.F.R. Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Section 134.1(b), CBP 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 regulations]. . . .” A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, or use which differs from the original material subjected to the process. United States v. Gibson Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments v. United States, 681 F.2d 778, 782 (1982). In order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, the determinative issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. See Belcrest Linens v. United States, 6 CIT 204 (1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). The country of origin of the item’s components, extent of the processing that occurs within a country, and whether such processing renders a product with a new name, character, and use are primary considerations in such cases. Additionally, factors such as the resources expended on product design and development, extent and nature of post-assembly inspection and testing procedures, and the 

The marking statute, section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304), provides that unless excepted, every article of foreign origin (or its container) imported into the United States shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its container) will permit, in such a manner as to indicate to an 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 markings on the imported goods the country of which the good is the product. The evident purpose is to mark the goods so that at the time of purchaser 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., 27 C.C.P.A. 297, 302 C.A.D. 104 (1940).Part 134 of the U.S. Customs and Border Protection (“CBP”) Regulations (19 C.F.R. Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. § 1304. Section 134.1(b), CBP 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 regulations]. . . .” A substantial transformation is said to have occurred when an article emerges from a manufacturing process with a name, character, or use which differs from the original material subjected to the process. United States v. Gibson Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments v. United States, 681 F.2d 778, 782 (1982).In order to determine whether a substantial transformation o