The country of origin of a lithium-ion pouch cell

N347172 April 25, 2025 OT:RR:NC:N1:103 CATEGORY: Origin Jeongwook Lee SK on Co., Ltd 99, Seorin-dong, Jongro-gu Seoul 03188 South Korea RE: The country of origin of a lithium-ion pouch cell Dear Mr. Lee: In your letter dated March 28, 2025, you requested a country of origin ruling. The merchandise under consideration is referred to as an Energy Storage System lithium iron phosphate pouch cell (ESS LFP). It is described as a rectangular rechargeable lithium-ion pouch cell with a nominal voltage of 3.21 VDC, a minimum capacity of 58.7 Ah, and a minimum energy of 188 Wh. The cell measures approximately 310 millimeters in length, 110 millimeters in width, and 14.5 millimeters in thickness. You presented two manufacturing scenarios with identical operational production steps. The only difference between the two scenarios will be the origins of the materials. The materials will be shipped to South Korea in different material forms, including in material rolls, in powder form, or as liquids shipped in bulk containers. In the first scenario, the materials are sourced from China, France, Japan, Malaysia, South Korea, and the United States. These include cathode and anode active material sourced from China; terminal tabs, raw material for the conductor, various binder materials, rolls of separator material, and drums of electrolyte sourced from South Korea; rolls of anode foil sourced from Malaysia; rolls of film material for the pouch sourced from Japan; and binder material sourced from France or the United States. In the second scenario, the materials are sourced from China, South Korea, and the United States. These include cathode and anode active material, various binder materials, containers of solvents, rolls of separator material, rolls of anode foil, rolls of film material for the pouch, and drums of electrolyte sourced from China; various binder materials and terminal tabs sourced from South Korea; and binder material sourced from the United States. The manufacturing process for the ESS LFP pouch cell will occur in South Korea in a partially automated production line that is divided into three sections. The first section is dedicated to manufacturing the electrodes and begins with milling and mixing raw materials (e.g., active materials, conductive agents, solvents, and binders) to produce a slurry. The slurry is applied to a foil, creating a semi-finished roll that is subsequently flattened to the required thickness by a rolling press. Afterward, the roll is slit to the required width and stored as a semi-finished reel. The next section involves assembling the electrode, separators, various other components, and adding electrolyte. The first step is notching, which is described as cutting the semi-finished electrode reel into sheets specific to the shape and size of the battery cell. Next, the electrode sheets are placed in a high-temperature vacuum environment to remove any moisture. The process continues with “stacking,” a process where the anode and cathode electrode sheets are alternately stacked with separators to form a jelly roll. The final steps of this section involve welding tabs to the jelly roll, placing the roll inside a pouch, adding electrolyte, and sealing the pouch. The last section is dedicated to the formation process. The purpose of this step is to activate and verify the performance of the battery cell. It begins with pre-charging the battery cell at a low charging speed to form the solid electrolyte interface, followed by degassing the cell to remove any air generated during the pre-charging process. The battery cells are subjected to various tests and inspections, including measuring the capacity and verifying the cell thickness, weight, insulation resistance, and dimensions. When determining the country of origin for purposes of applying current trade remedies under Section 301, and any additional duties, the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling Letter H301619, dated November 6, 2018. 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. See Texas Instruments Inc. v. United States, 681 F.2d 778 (C.C.P.A. 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). Based upon the facts presented, various discrete material forms, including liquid chemicals, material rolls, and raw materials are sent to South Korea where they are made into a new product. The foreign materials are introduced into different sections of a production line and further processed into semi-manufactured materials and subcomponents, which are then used to create a battery cell. The manufacturing process results in an article, a lithium-ion battery pouch cell, 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 South Korea result in a substantial transformation of the foreign components and the country of origin of the ESS LFP pouch cell is South Korea. 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