MAR-2 OT:RR:NC:N1:109
Ms. Ruth Girmscheid
President
International Customs Services, Inc.
N64 W24801 Main Street
Suite 121
Sussex, WI 53089
RE: THE COUNTRY OF ORIGIN OF SPENT BATTERIES; ARTICLE 509
Dear Ms Girmscheid:
This is in response to your letter dated September 15, 2009 requesting a country or origin ruling on behalf of your client, Johnson Controls Battery Group, Inc.
In your letter you state that Johnson Controls Battery Group, Inc., imports spent lead acid batteries and at time of entry classifies them under the Harmonized Tariff Schedule of the United States (HTSUS) subheading 8548.10, which provides for “Waste and scrape of primary cells, primary batteries and electric storage batteries; spent primary cells, spent primary batteries and spent electric storage batteries.” Originally, however, these lead acid batteries, which your letter states were manufactured in various countries, are imported into Canada under HTSUS subheading 8507.10, which provides for “Lead-acid storage batteries, of a kind used for starting piston engines.” After manufacture in various countries, the lead acid batteries are used in Canada and once they become spent, because their useful life has been exhausted, they are imported into the United States as spent electric storage batteries under subheading 8548.10. In requesting the country of origin, you contend that the spent batteries satisfy the required tariff shift rule under 19 CFR 102.20 for heading 8548, which states “A change to heading 8548 from any other heading.”
The marking statute, Section 304, 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 U.S. 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 the ultimate purchaser in the U.S. the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR Part 134) implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304. Section 134.1(b), Customs Regulations (19 CFR 134.1(b)), defines "country of origin" as: “The country of manufacture, production or growth of any article of foreign origin entering the U.S. 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; however for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.” The country of origin marking requirements for a "good of a NAFTA country" are also determined in accordance with Annex 311 of the North American Free Trade Agreement ("NAFTA"), as implemented by Section 207 of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat 2057) (December 8, 1993) and the appropriate Customs Regulations. The Marking Rules used for determining whether a good is a good of a NAFTA country are contained in Part 102, Customs Regulations. The marking requirements of these goods are set forth in Part 134, Customs Regulations. Section 134.45(a)(2) of the regulations, provides that "a good of a NAFTA country may be marked with the name of the country of origin in English, French or Spanish.” Section 134.1(g) of the regulations, defines a "good of a NAFTA country" as an article for which the country of origin is Canada, Mexico or the United States as determined under the NAFTA Marking Rules (19 CFR Part 102). Section 102.11, Customs Regulations (19 CFR 102.11) sets forth the required hierarchy for determining whether a good is a good of a NAFTA country for marking purposes. Paragraph (a) of this section states: (a) The country of origin of a good is the country in which: (1) The good is wholly obtained or produced; (2) The good is produced exclusively from domestic materials; or (3) Each foreign material incorporated in that good undergoes an applicable change in tariff classification set out in section 102.20 and satisfies any other applicable requirements of that section, and all other applicable requirements of these rules are satisfied.
Based upon the facts in this case, we first apply the rule in 19 CFR 102.11(a)(3). The imported spent lead acid batteries are stated to be classifiable under subheading 8548.10, as spent electric storage batteries. The applicable change in tariff classification for heading 8548 provides:
“8548… “A change to heading 8548 from any other heading.”
While the imported merchandise does meet the tariff shift, in applying the required hierarchy for determining whether a good is a good of a NAFTA country for marking purposes in accordance with Section 102.11, Customs Regulations (19 CFR 102.11) this office also notes that that 19 CFR 102.17 provides that:
“A foreign material shall not be considered to have undergone an applicable change in tariff classification specified in CFR 102.20 or 102.21 or to have met any other applicable requirements of those sections merely by reason of one or more of the following:
….. (a) A change in end-use…..”
The end-use of the imported merchandise changed from a usable electric storage battery, classifiable within heading 8507 to a spent electric storage battery of heading 8548.
In accordance with Explanatory Note 85.07 merchandise classifiable within that heading would be “Electric accumulators (storage batteries or secondary batteries)… used to store electricity and supply it when required.” Explanatory Note 85.48 and Note 9 to Chapter 85 both state that merchandise classifiable within that heading would be “Spent primary cells, spent primary batteries and spent electric storage batteries … which are neither usable as such because of breakage, cutting up, wear, or other reasons, nor capable of being recharged.” As the use of the imported spent lead acid batteries has changed from being a device that can store electricity and supply it when required to a device that is neither usable nor capable of being recharged, its end-use has changed. In accordance with CFR 102.17, a mere change in end-use is a non-qualifying operation in determining whether an applicable change in tariff has occurred with respect to NAFTA origin. As such the imported spent lead acid batteries do not undergo the applicable change in tariff classification set out in Section 120.20 or to have met any other applicable requirements of those sections merely by reason of CFR 102.17(a), a change in end-use.
Pursuant to 19 CFR 102.11(d)(3), the country of origin of the imported spent lead acid batteries is the last country in which the good underwent production. You have stated in your letter that the lead acid batteries were manufactured in various countries. As such, upon importation into the United States, each battery is to be marked with their respective country of origin in accordance with the marking statute, Section 304, Tariff Act of 1930, as amended (19 USC 1304).
This ruling is being issued under the provisions of Part 181 of the Customs Regulations (19 CFR Part 181).
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 Linda M. Hackett at (646) 733-3015.
Sincerely,
Robert B. Swierupski
Director
National Commodity Specialist Division