CBP Ruling N345393 — The country of origin of a natural graphite anode active material

Tariff classification

HTS codes: 2025, 1993, 1982, 1201, 2018, 1992

Headings: 2025, 1993, 1982, 1201, 2018, 1992

Product description

, Ltd. for a natural graphite anode active material (NG AAM) that subsequent to its importation into the United States will eventually be part of the anode of a lithium-ion battery that will be incorporated into an electric vehicle. The manufacturing process for the instant material involves different levels of production in different countries (China, Korea) related to the descriptive process described below. In China, natural graphite is mined from the Earth and then processed via a high speed rotation in a cylindrical machine in order to give the individual graphite particles a spherical shape. After this process is completed, the graphite is sent to Korea where it is mixed with pitch from Country A and then undergoes a series of complex, technically exacting manufacturing steps. These steps use a combination of precise physical and chemical forces, as well as a carefully controlled application of high temperatures, to transform these raw material inputs into the final product of a NG AAM. After this process is completed, the material is sent to the United States for its ultimate incorporation into the lithium-ion battery. When determining the country of origin for purposes of applying current trade remedies under Section 301, 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). When the Chinese origin graphite is sent to Korea, based on the processing there, it undergoes a change in character, based on its coating with the pitch. Withou

CBP rationale

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). When the Chinese origin graphite is sent to Korea, based on the processing there, it undergoes a change in character, based on its coating with the pitch. Without this coating the Chinese origin graphite has limited capacities in its recharging abilities (especially in areas of recharging efficiency, lifespan of the battery, and overall safety) making it not particularly suitable for use in a lithium-ion battery for an automobile. The processes performed in Korea changes the Chinese material into a material that can be used for an electric vehicle?s lithium-ion battery, thereby resulting in a change in use. The country of origin of the natural graphite anode active material for purposes of Section 301 remedies will be Korea, and Section 301 duties will not apply. 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.

Full text

N345393
April 11, 2025
OT:RR:NC:N3:139
CATEGORY: Origin Shara Aranoff Covington & Burling LLP One CityCenter, 850 Tenth Street NW Washington, DC 20001 RE: The country of origin of a natural graphite anode active material Dear Ms. Aranoff: In your letter dated January 24, 2025, you requested a country of origin ruling on behalf of your client POSCO Future M, Co., Ltd. for a natural graphite anode active material (NG AAM) that subsequent to its importation into the United States will eventually be part of the anode of a lithium-ion battery that will be incorporated into an electric vehicle. The manufacturing process for the instant material involves different levels of production in different countries (China, Korea) related to the descriptive process described below. In China, natural graphite is mined from the Earth and then processed via a high speed rotation in a cylindrical machine in order to give the individual graphite particles a spherical shape. After this process is completed, the graphite is sent to Korea where it is mixed with pitch from Country A and then undergoes a series of complex, technically exacting manufacturing steps. These steps use a combination of precise physical and chemical forces, as well as a carefully controlled application of high temperatures, to transform these raw material inputs into the final product of a NG AAM. After this process is completed, the material is sent to the United States for its ultimate incorporation into the lithium-ion battery. When determining the country of origin for purposes of applying current trade remedies under Section 301, 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). When the Chinese origin graphite is sent to Korea, based on the processing there, it undergoes a change in character, based on its coating with the pitch. Without this coating the Chinese origin graphite has limited capacities in its recharging abilities (especially in areas of recharging efficiency, lifespan of the battery, and

overall safety) making it not particularly suitable for use in a lithium-ion battery for an automobile. The processes performed in Korea changes the Chinese material into a material that can be used for an electric vehicle?s lithium-ion battery, thereby resulting in a change in use. The country of origin of the natural graphite anode active material for purposes of Section 301 remedies will be Korea, and Section 301 duties will not apply. 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 John Bobel at [email protected].
Sincerely,
Steven A. Mack Director National Commodity Specialist Division

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