CLA-2-38:OT:RR:NC:N3:139
Karla Morales
Showa Denko Materials (America), Inc.
2150 North First Street
San Jose, California 95131
RE: The country of origin of a graphite mixture material
Dear Ms. Morales:
In your letter dated October 17, 2022, you requested a country-of-origin determination for a graphite material that is given the designation of “HPGTP-series” and will be used in the production of lithium-ion batteries. HPGTP-series will be a mixture of raw natural graphite and artificial graphite.
Description of Goods: Raw Materials
The major raw materials used in the production of HPGTP-series will be artificial graphite with a Harmonized Tariff Schedule of the United States (HTSUS) number of 3801.10.5000 and a country of origin of China; and natural graphite with a HTSUS number of 2504.10.5000 and a country of origin of China.
Manufacturing Process
The processes involved in the manufacturing of the HPGTP-series is described as follows:
Both the Chinese origin natural and artificial graphite are sent to Japan.
The artificial graphite is first inspected and then undergoes a sieving process in a sieve shaker to break up agglomerated powder and optimize particle size distribution. It then undergoes a magnetic separation process in a magnetometer to remove the impurities of iron,
copper, cobalt, and nickel. It is then weighed and packed until it is ready to be mixed.
The natural graphite upon arrival in Japan undergoes a similar process of inspection, sieving, and magnetic separation. The sieving process for the natural graphite appears to have the additional function of removing fine, hard, and coarse particles intrinsic to the mined raw material. It is also then weighed and packed until it is ready to be mixed.
The artificial and natural graphite are then mixed with mixing equipment at predetermined mixing ratios in order to produce a homogenized mixture. After mixing, the mixture once again undergoes a sieving and magnetic separation process before undergoing final inspection to check ash content, tapping density, particle size, surface area, impurities, pH, and whether absorbed
oil is present. If it passes these tests, it is then designated as the completed product HPGTP-series which will be subsequently used to coat anodes in lithium-ion batteries.
Country of Origin and Classification
"Country of origin" is defined in 19 CFR 134.1(b) as "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.”
A substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993). 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).
You indicate the mixing of the artificial and natural graphite powders is done in a simple two-part process. First the powders go through inspection, sieving, magnetic separation, and mixing. Then the powders go through additional sieving, magnetic separation, and another inspection to achieve a particle size distribution between the artificial and natural graphite that is conducive to ultimately coating an anode on a lithium-ion battery. No additions or chemical reactions occur during this processing.
CBP has generally held that mere mixing of two substances in another country, not involving a chemical reaction and without additional processing, does not result in a product of such other country. See HQ 561986.
The basic properties of both the artificial and natural graphite in the processing described above remain essentially unchanged. It is our opinion that there is no substantial transformation of the starting materials. Therefore, both the artificial, and natural graphite retain their original classification and country of origin identity.
Consequently, the country of origin for the mixed graphite powder designated as HPGTP-series, which is obtained and processed as indicated above, will be China.
This merchandise may be subject to the requirements of the Toxic Substances Control Act (TSCA), which are administered by the U.S. Environmental Protection Agency. Information on the TSCA can be obtained by contacting the EPA at 1200 Pennsylvania Avenue, N.W., Mail Code 70480, Washington, D.C., by telephone at (202) 554-1404, or by visiting their website at www.epa.gov.
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, please contact National Import Specialist John Bobel at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division