Newly Released CBP HQ Rulings Oct. 31
The Customs Rulings Online Search System (CROSS) was updated Oct. 31 with the following headquarters rulings (ruling revocations and modifications will be detailed elsewhere in a separate article as they are announced in the Customs Bulletin):
H327000: USMCA Eligibility; Section 301 Measures; Cathode Materials
| Ruling: (1) The "semi-finished good B" and the "finished good" each qualify for preferential tariff treatment under the USMCA when imported into the U.S. from Canada. (2) The country of origin of both, for purposes of Section 301 remedies, will be Canada. |
| Issues: (1) Are the semi-finished good B and the finished good each eligible for preferential treatment under the USMCA when produced in Canada and imported into the U.S.? (2) What is the country of origin of the semi-finished good B and the finished good for purposes of Section 301 trade remedies? |
| Item: Cathode materials In China, non-USMCA originating nickel sulfate, cobalt sulfate, and manganese sulfate will be dissolved and mixed. This mixture will be chemically synthesized with non-originating sodium hydroxide and liquid ammonia. Washing and dehydration processes will be performed. The resulting Cobalt Manganese Nickel Hydroxide will be evenly blended, sieved, de-ironed, packaged, and shipped to Canada. The "semi-finished good A" is defined as a precursor in the commercial market.In Canada, the non-USMCA originating semi-finished good A will be mixed with lithium hydroxide and doping compounds under a special manufacturing process where two proprietary substances are added and then fired at high temperature. The chemical reaction will turn the mixed powder into doped Cobalt Lithium Manganese Nickel Oxide, CAS No. 182442-95-1 (“semi-finished good B”) of subheading 3824.99.39, HTSUS, which will further undergo roll smashing and crushing processes and will be sieved and de-ironed to remove impurities, washed, dehydrated, and dried. The "semi-finished good B" is called a “doped-cathode active material” in the commercial market. In Canada, the semi-finished good B will be coated under a special coating process where USMCA originating or non-originating boric acid will be added at a high temperature to produce coated and doped Cobalt Lithium Manganese Nickel Oxide, which will be further de-sieved, de-ironed, and packaged. The finished good is the same as the semi-finished good B except it is coated. It is the core material used in electric vehicle batteries that determines the voltage, energy density, lifespan, and output. The finished good will be imported into the U.S. |
| Reason: CBP has held that converting powder into coated microgranules that are subsequently covered with an enteric coating wouldn't result in a substantial transformation. In the instant case, the name, character and use of the finished good remains the same as the semi-finished good B. The only difference is that the finished good is put through a coating process using boric acid, the content of which is less than 1 percent and the value of which is less than $1. The finished good remains Cobalt Lithium Manganese Nickel Oxide with the same CAS number before and after the coating process. |
| Ruling Date: Oct. 24, 2023 |