The country of origin of AAA alkaline batteries.

N328209 September 30, 2022 OT:RR:NC: N1:103 CATEGORY: Country of Origin Elizabeth McGuffin Dollar General 100 Mission Ridge Goodlettsville, TN 37214 RE: The country of origin of AAA alkaline batteries. Dear Ms. McGuffin: In your letter dated September 19, 2022, you requested a country of origin ruling. The merchandise under consideration is an AAA alkaline battery, model LR03, which is described as a non-rechargeable manganese dioxide battery. Each AAA battery is manufactured using materials and components sourced from China and Vietnam. Manganese dioxide, zinc, potassium hydroxide, graphite, copper nails, nylon gaskets, fiber separators, and nickel-plated steel cans are sourced from China. Paperboard and blister packaging materials are sourced from Vietnam. The battery is manufactured in Vietnam using a fully automated production line. The process begins with applying graphite to the inner wall of a nickel-plated steel cathode can. Manganese dioxide is pressed into cathode rings and stacked into each can. Next, a fiber separator is inserted before the battery is filled with an electrolyte solution made from a mixture of potassium hydroxide and water. To form the anode, a machine fills each can with a zinc material. A current collector, composed of a copper nail and nylon gasket, is inserted before each battery is crimped, sealed, and placed into retail packaging. With regard to your request for the appropriate country of origin of the AAA alkaline battery, 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. As stated in HQ 735009, dated July 30, 1993, “The country of origin is the country where the article last underwent a ‘substantial transformation’, that is, processing which results in a change in the article's name, character, or use.” In addition, the court has held that “A substantial transformation occurs when an article emerges from a manufacturing process with a name, character, and use that differs from the original material subjected to the processing.” 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 Energizer Battery, Inc. v. United States, 190 F. Supp. 3d 1308 (2016), the Court of International Trade interpreted the meaning of “substantial transformation” as used in the Trade Agreements Act of 1979 (“TAA”) for purposes of government procurement. In Energizer the court reviewed the “name, character and use” test in determining whether a substantial transformation had occurred in determining the origin of a flashlight, and reviewed various court decisions involving substantial transformation determinations. The court noted, citing Uniroyal, Inc. v. United States, 3 C.I.T. 220, 226, 542 F. Supp. 1026, 1031, aff’d, 702 F.2d 1022 (Fed. Cir. 1983), that when “the post-importation processing consists of assembly, courts have been reluctant to find a change in character, particularly when the imported articles do not undergo a physical change.” Energizer at 1318. In addition, the court noted that “when the end-use was pre-determined at the time of importation, courts have generally not found a change in use.” Energizer at 1319, citing as an example, National Hand Tool Corp. v. United States, 16 C.I.T. 308, 310, aff’d 989 F.2d 1201 (Fed. Cir. 1993). 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. Based upon the facts presented, the various discrete components and raw materials from China are sent to Vietnam where they are made into a new product. The manufacturing process results in an article, an AAA alkaline battery, which emerges from the process with a new name, character, and use, different from that possessed by the materials prior to the processing. Therefore, it is the opinion of this office that the manufacturing processes performed in Vietnam result in a substantial transformation of the Chinese components and the country of origin of the AAA alkaline batteries is Vietnam. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). Please note that 19 C.F.R. 177.9(b)(1) provides that "[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based." 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