The country of origin of a battery module

N315100 October 27, 2020 CLA-2-85:OT:RR:NC:N1:103 CATEGORY: Country of Origin Michael Roll Roll & Harris LLP 1999 Avenue of the Stars Los Angeles, CA 90067 RE: The country of origin of a battery module Dear Mr. Roll: In your letter dated October 7, 2020, on behalf of your client Sungrow USA Corporation, you requested a country of origin ruling. The item under consideration is a battery module, part number 22S1, specially designed to be used in a solar energy storage system. The battery module consists of a rectangular module housing with a printed circuit board assembly (PCBA), twenty-two lithium-ion battery cells, and various hardware including wire harnesses, screws, and brackets. The battery module is designed to be incorporated into a Solar Plus Storage System which is capable of storing energy from solar panels and providing power to an electrical grid. The printed circuit board assembly serves as the battery management system that monitors the voltage and temperature. The manufacturing process occurs in China with components solely produced in Korea, including the battery cells. The process begins by placing the twenty-two battery cells into the bottom case assembly separated by spacers, before being bolted in position. Next, a terminal bolt and housing assembly module are installed and secured with screws before laser welding is completed. Afterward, the PCBA is mounted into its card slot and connected to sensor wires and power cables before the top module cover closes the assembly. Cleaning, labeling and testing are performed throughout the production process. Final inspection and packing complete the manufacturing process. With regard to your request for the appropriate country of origin of the battery module, 19 C.F.R. § 134.1(b) provides in pertinent part as follows: Country of origin means 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 this part; The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character and 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). 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 order to determine whether a substantial transformation occurs when components of various origins are assembled into completed products, all factors such as the components used to create the product and manufacturing processes that these components undergo are considered in order to determine whether a product with a new name, character, and use has been produced. No one factor is decisive. However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983). Furthermore, courts have considered the nature of the assembly, i.e., whether it is a simple assembly or more complex, such that individual parts lose their separate identities and become integral parts of a new article. In this instance, it is this office’s opinion that the battery cells, which store and provide power, impart the essence of the finished battery module. The battery cells are placed inside a case assembly and then additional components are added into the case including a PCBA, bolts, screws, wires, and spacers. CBP has previously held that the assembly of battery cells into battery packs does not result in a substantial transformation of the battery cells because the essential character of the cells does not change simply by being placed together in a case. Furthermore, the battery cells do not undergo a change in name, character or use as a result of these assembly operations in China. See HQ ruling 563045, dated August 9, 2004 and HQ ruling 734393 dated March 20, 1992. The assembly operations in China do not change the Korean battery cells, which provide the essence of the battery module, into an article with a new name, character or use, different from that possessed by the article prior to processing. In view of these facts, the country of origin of the subject battery module, model 22S1 is South Korea. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at https://hts.usitc.gov/current. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Paul Huang at paul.huang@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division