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HQ 560093





August 21, 1997

MAR-05 RR:TC:SM 560093 KKV

CATEGORY: MARKING

Mr. Peter L. Stormer
Rohm and Haas
Independence Mall West
Philadelphia, PA 19105

RE: Substantial transformation; Conversion of chloride form to hydroxide form; Blending of anionic exchange resin with cation exchange resin; Mixed bed ion exchange resin

Dear Mr. Stormer:

This is in response to your letters dated September 19, 1996, which request a binding ruling regarding the country of origin marking requirements applicable to five different mixed bed ion exchange resins produced under the Amberlite trademark: "MB150," "RWM140," "RWM270," "IRN150," and "IRN160."

FACTS:

We are informed that five different French-origin anionic exchange resins are imported into the U.S. for further processing. The French resins, imported in chloride form, are converted to hydroxide form and then blended with a cation resin of U.S.-origin in the following ratios (U.S. to French, weight/weight content):

Amberlite MB150 59.0 to 41.0 ratio
Amberlite RWM140 70.0 to 30.0 ratio
Amberlite RWM270 75.3 to 24.7 ratio
Amberlite IRN150 59.0 to 41.0 ratio
Amberlite IRN160 37.5 to 62.5 ratio

ISSUE:

Whether the processing of the imported anion resin by combining it with domestic cation resin results in a substantial transformation of the imported product into a new and different article of U.S.-origin, so as to exempt the finished product from country of origin marking requirements.

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin imported into the United States 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 United States the English name of the country of origin of the article. By enacting 19 U.S.C. 1304, Congress intended to ensure that the ultimate purchaser would be able to know by inspecting the marking on the imported goods the country of which the goods are the product. The evident purpose is to mark the goods so that at the time of purchase the ultimate purchaser may, by knowing where the goods were produced, be able to buy or refuse to buy them, if such marking should influence his will. United States v. Friedlaender & Co., 27 C.C.P.A. 297, 302 C.A.D. 104 (1940).

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 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; however for a good of a NAFTA country, the NAFTA Marking Rules will determine the country of origin.

The well-established test for determining whether a substantial transformation has occurred is derived from language enunciated by the court in Anheuser-Busch Brewing Association v. United States, 207 U.S. 556, 562 (1908), which defined the term "manufacture" as follows:

Manufacture implies a change, but every change is not manufacture and yet every change in an article is the result of treatment, labor and manipulation.
But something more is necessary, as set forth and illustrated in Hartranft v.
Wiegmann, 121 U.S. 609. There must be transformation; a new and different article must emerge, having a distinctive name, character or use.

Simply stated, 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." See Texas Instruments, Inc. v. United States, 69 CCPA 152, 681
F.2d 778 (1982) (cited with approval in Torrington Co. v. United States, 764 F. 2d 1563, 1568 (1985)).

Upon receipt of your request for a binding ruling and supporting documentation, the technical data received in connection with your request was forwarded to the Customs Service Office of Laboratories and Scientific Services for analysis and comments. Based on the information you have submitted, and a report by the Customs Office of Laboratories and Scientific Services, we are of the opinion that the processing of the imported French anionic exchange resins in the U.S. constitutes a substantial transformation.

The French anionic exchange resin is imported into the United States in chloride form and converted into hydroxide form in the U.S. The resin is divinyl benzene/styrene copolymer containing quaternary amine functional groups. On importation, the positively charged quaternary group has a negatively-charged chloride ion attached. Using simple backwashing techniques the chloride ions are replaced by hydroxide ions, such as natural organic acids and nitrates, from liquid flow systems (See, Ullman's Encylopedia of Industrial Chemistry, Volume A14, page 406.)

After importation, the resin is mixed with a cation exchange resin, of U.S.-origin, to produce a mixed bed ion-exchange resin. The cation resin is sulfonated divinyl benzene/styrene copolymer in hydrogen ion form. Though the base polymer is similar to the imported products, the cation resin contains negatively-charged sulfonic acid groups, rather than quaternary amine groups as in the French products. The negatively-charged sulfonic groups have a positively-charged hydrogen ion attached which participates in the ion exchange. The hydrogen ions displace positively-charged ions, such as metallic ions (e.g., magnesium, calcium, etc.) which cause "hard water, from liquid flow systems (See Ullman's Encyclopedia of Industrial Chemistry, Volume A14, page 405).

As a result, anionic exchange resins of French origin are blended with domestic cationic resins to form products called mixed bed ion exchange resins. Although the imported French products may be used, by themselves, without further blending, they are capable of exchanging only anionic constituents from a flowstream. After blending with the U.S.-origin resin, the finished mixed bed resins contain both cation and anionic exchange resins and thus, have the capability to exchange both anionic and cationic constituents from the flowstream.

Based upon this information, we conclude that the imported ion exchange resins are substantially different from the finished mixed bed resins. The finished blended products have a different commercial designation (mixed bed resins) than the imported French products (anionic exchange resins). The finished blended products are a mixture of two different polymers while the imported French products contain only one polymer. The finished blended products have the capability of extracting a broader range of contaminating ions than the imported French products, and thus, have different industrial applications and uses. Accordingly, it is our determination that the imported French anion exchange resins are substantially transformed into a new and different product in the United States. Therefore, the country of origin of the blended mixed bed ion exchange resins is the U.S., and the finished products are exempt from country of origin marking requirements.

HOLDING:

Based upon the information provided, French anionic exchange resins which are imported to the U.S. in chloride form, converted to hydroxide form and blended with U.S.-origin cation resins are substantially transformed into a new and different article as a reult of processing in the U.S. Accordingly, the country of origin of the blended mixed bed ion exchange resins is the United States, and the finished products are exempt from the country of origin marking requirements.

Sincerely,

John Durant

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