Assembly of Battery Packs in China Doesn't Result in Change in Character, CBP Says
The assembly of lithium-ion battery packs in China prior to import doesn't result in a substantial transformation, CBP said in an April 1 ruling. Greenworks Tools sought a country of origin ruling on the battery packs, which are used with power tools. The company argued that the origin should be based on the origin of the battery cells and CBP agreed.
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The battery cells are produced in China, Singapore, Malaysia and Korea, and are assembled, along with various other components, in China, it said. Previous CBP rulings said that the battery cells provide the essence of product. “The name of the battery cells, as imported, remains the same as in the completed battery packs,” the agency said. “As the constitutive components do not lose their individual names as a result of the assembly in China, no name change has occurred.”
The batteries keep a predetermined use through importation, something the courts have looked at when determining origin, CBP said. “At the time of importation, the battery cells are designed to store and provide power to the compatible power tools,” CBP said. “After their assembly into battery packs in China, the lithium-ion cells maintain their function. Hence, their predetermined end use as components of battery packs does not undergo a change due to the assembly process in China.”
The processing in China is also not sufficiently complex to be a substantial transformation, the agency said. The process “appears to be no more than the mere simple assembly of the battery cells with components from China into the housing from Vietnam,” CBP said. “In further support, we note that the assembly process described here is relatively similar to the assembly process described in Energizer Battery,” a 2016 court case decision on substantial transformation (see 1612120038). As a result, the origin of the battery pack is based on the origin of the lithium-ion cells, it said.