The country of origin of a vanadium flow battery

N342506 October 4, 2024 OT:RR:NC:N1:103 CATEGORY: Origin Derek Polman-Tuin Invinity Energy Systems 235 Montgomery Street, Suite 1201San Francisco, CA 94104 RE:  The country of origin of a vanadium flow battery Dear Mr. Polman-Tuin: In your letter dated September 6, 2024, you requested a country of origin ruling on a vanadium flow battery. The merchandise under consideration is referred to as the Invinity Six Pack Vanadium Flow Battery, model number VS3-022-UK, and described as a stationary energy storage system that relies on a reversible electrochemical reaction to store electrical energy. Based on the information provided, each system consists of six battery modules housed within a 20-foot container. The complete energy storage system has an advertised energy storage capacity of 220 kWh and a nominal voltage of 850 VDC. It is assembled in the United Kingdom using components sourced from Austria, Canada, China, Germany, Japan, and the United States. Each battery module will contain battery stacks, an assembly where electrolyte is pumped through an ion exchange membrane. A reduction or oxidation reaction occurs on both sides of the ion exchange membrane resulting in an electrical potential. The battery stacks are assembled in the United Kingdom using components sourced from Canada, China, Germany, and the United States. The first step involves sorting and cutting felt materials and membrane materials that are further processed using proprietary techniques and machinery. The next step involves combining an A-Frame, bipole plate, and the previously prepared felt to form an A-Frame subassembly, which is subsequently joined with covers, membrane material, additional felt material, and a B-Frame to form a Unit Cell Assembly. At the next station, a worker arranges multiple Unit Cell Assemblies along with endplates, isolator assemblies, and a manifold within a fixture device. A press is used to compress the components so that they can be fixed in position using threaded rods. Once the stack is tested, it is ready for installation into the battery module. The battery module is located within an enclosure alongside other systems, collectively referred to as the “balance of the system.” This assembly is sourced from China and equipped with an electrolyte storage and handling system, air cooling system, and power electronics, which include wire harnesses, power supplies, battery management controllers, DC-to-DC converters, and more. In the United Kingdom, workers remove the covers of the enclosure, inspect the internal components, connect the power and communication cables harnesses, and fill the tanks with electrolyte. The battery stacks are lifted and mounted in the battery modules and connected to the electrolyte tanks. Afterward, work begins on the electrical system, which involves installing switches, power distribution blocks, other electrical assemblies, and completing the electrical cabling, including connecting the positive and negative cables. Lastly, each unit undergoes further testing and inspection before the covers are replaced. 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 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 examining assembly operations, Customs and Border Protection has looked to the nature of the assembly, as well as the origin of the component(s) that imparts the character to the end product. You state the assembly steps will be similar to those described in New York ruling N324063, dated February 10, 2022, but differ in that the battery stacks will be assembled in the United Kingdom. During final assembly, the battery stacks are installed into a Chinese subassembly that is described as the balance of components required to produce a battery capable of storing and supplying energy. While the battery stack cannot function on its own, and requires the pumps, electrolyte, etc., to store and supply electricity, we find that the battery stack imparts the character of the flow battery. As such, the country of origin of the Invinity Six Pack Vanadium Flow Battery, model number VS3-022-UK, for purposes of Section 301 trade remedies is the United Kingdom. The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP. This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection 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, please contact National Import Specialist Paul Huang at paul.huang@cbp.dhs.gov. Sincerely, Steven A. Mack Director National Commodity Specialist Division