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HQ 561806




May 9, 2002

MAR-2-05 RR:IA 561806 RFC

CATEGORY: CLASSIFICATION MARKING

TARIFF NO.: 8507.20.80

Ms. Mary Angel
E.R. Hawthorne & Company, Inc.
9370 Wallisville Road
Houston, Texas 77013

RE: Classification & Country of Origin Marking for Certain Battery Packs

Dear Ms. Angel:

This is in reference to your request, on behalf of the Safety Lamp of Houston, Inc., to the National Commodity Specialist Division of the U.S. Customs Service for a binding administrative ruling on the classification and country of origin marking requirements for a certain battery pack. The request has been forwarded to this office for a response.

FACTS:

The facts as presented are as follows: Battery cells manufactured by the Hawker Energy Products Inc, Warrensburg, Missouri, are exported to England. In England, the battery cells are assembled into a battery pack by the Wolf Safety Lamp Company Limited. The assembly consists of two battery cells being placed into an orange plastic molded box, and then a fuse, lid and contacts are attached. The assembled battery pack (designated “H-16A”) is then exported to the United States for use as a part for Wolflite Handlamps.

The above-mentioned battery cell is identified as a 2 volt, 5.0AH, X cell, sealed-lead rechargeable battery with the trademark Cyclon. The battery cell is said to be made in the United States. The plastic box or case is said to be made in the United Kingdom.

ISSUES:

What is the classification of the above-described battery pack?

What is the country of origin for marking purposes of a battery pack consisting two U.S. origin cells, plastic molded box, fuse, lid and contacts that are assembled in England and then exported to the United States?

LAW AND ANALYSIS:

Classification of the Merchandise

Merchandise imported into the United States is classified under the Harmonized Tariff Schedule of the United States (HTSUS). The tariff classification of merchandise under the HTSUS is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUSA and are to be considered statutory provisions of law for all purposes. See Sections 1204(a) and 1204(c) of the Omnibus Trade and Competitiveness Act of 1988 (19 U.S.C. § 1204(a), 1204(c)).

GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule (i.e., (1) merchandise is to be classified under the 4-digit heading that most specifically describes the merchandise; (2) only 4-digit headings are comparable; and (3) merchandise must first satisfy the provisions of a 4-digit heading before consideration is given to classification under a subheading within this 4-digit heading) and any relative section or chapter notes and, provided such headings or notes do not otherwise require, then according to the other GRIs.

GRI 6 prescribes that, for legal purposes, GRIs 1 to 5 shall govern, mutatis mutandis, classification at subheading levels within the same heading. Therefore, merchandise is to be classified at equal subheading levels (i.e., at the same digit level) within the same 4-digit heading under the subheading that most specifically describes or identifies the merchandise.

The Explanatory Notes to the Harmonized Commodity Description and Coding System (hereinafter "Harmonized System") represent the official interpretation of the Customs Cooperation Council on the scope of each heading. See H.R. Conf. Rep. No. 100-576, 100th Cong., 2d Sess. 549 (1988); 23 Customs Bulletin No. 36, 3 (T.D. 89-90, September 6, 1989), 59 F.R. 35127 (August 23, 1989). Although not binding on the contracting parties to the Harmonized System Convention or considered to be dispositive in the interpretation of the Harmonized System, the Explanatory Notes should be consulted on the proper scope of the Harmonized System. Id.

Heading 8507 specifically provides for “electric storage batteries, including separators therefor, whether or not rectangular (including square).” The Explanatory Notes to heading 8507 provide, in pertinent part, that:

Electric accumulators (storage batteries) are used to store electricity and supply it when required. A direct current is passed through the accumulator producing certain chemical changes (charging); when the terminals of the accumulator are subsequently connected to an external circuit these chemical changes reverse and produce a direct current in the external circuit (discharging). This cycle of operations, charging and discharging, can be repeated for the life of the accumulator.

Accumulators consist essentially of a container holding the electrolyte in which are immersed two electrodes fitted with terminals for connection to an external circuit. In many cases the container may be subdivided, each subdivision (cell) being an accumulator in itself; these cells are usually connected together in series to produce a higher voltage. A number of cells so connected is called a battery. A number of accumulators may also be assembled in a larger container. (Emphasis added.)

The main types of accumulators are:

(1) Lead-acid accumulators, in which the electrolyte is sulphuric acid and the electrodes lead plates or lead grids supporting active material.

(2) Alkaline accumulators, in which the electrolyte is usually potassium or lithium hydroxide and the electrodes are either:

(i) Positive electrodes of nickel or nickel compounds and negative electrodes of iron.
or (ii) Positive electrodes of nickel or nickel compounds and negative electrodes of cadmium.

The electrodes may consist of simple plates, grids, rods, etc., or of grids or tubes covered or filled with a special paste of the active material. The containers for lead-acid accumulators are usually made of glass or, in the case of car batteries, are moulded from plastic, hard rubber or composition material. In big stationary accumulators, glass or lead lined, plastic or wood boxes are used, while containers for alkaline accumulators are usually of steel or plastics. Certain nickel-cadmium accumulators are contained in small waterproof containers and have the external appearance of dry batteries of heading 85.06.

Some lead-acid accumulators are fitted with a hydrometer, which measures the specific gravity of the electrolyte and so indicates roughly the degree of charge of the accumulator.

Electric accumulators remain classified here even if presented without their electrolyte.

This heading does not cover spent electric accumulators and waste and scrap thereof; these are classified in heading 85.48.

Explanatory Notes to Heading 8507 to the Harmonized Commodity Description and Coding System (Third edition, 2002), pages 1631-32.

Pursuant to GRI 1 and the above-listed Explanatory Notes, the merchandise under consideration is classified in HTSUS heading 8507 as electric storage batteries. Pursuant to GRI 1 and 6, the merchandise is classified in HTSUS subheading 8507.20.80 as other, other lead-acid storage batteries.

Country of Origin Marking for the Merchandise

The U.S. law relating to country of origin marking for imported merchandise (“the marking statute”) is found in section 304 of the Tariff Act of 1930, as amended (19 U.S.C. § 1304). This law provides that, unless excepted, every article of foreign origin (or its container) 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. See 19 U.S.C. § 1304(a). Products made in the United States do not have to be marked with their country of origin under this statute.

The purpose of the marking statute is to allow the ultimate purchaser of the goods to know, by simple inspection, specifically where they were made in case such knowledge might influence his or her decision to purchase the goods (i.e., to permit the ultimate purchaser in the United States to choose between domestic and foreign-made products, or between the products of different foreign countries). See generally, United States v. Friedlaender & Co. Inc., 27 C.C.P.A. 297, at 302 (1940).

The “ultimate purchaser” is defined in Part 134 of the Customs Regulations as:

[G]enerally the last person in the United States who will receive the article in the form in which it was imported; however, for a good of a NAFTA country, the ``ultimate purchaser'' is the last person in the United States who purchases the good in the form in which it was imported.

19 CFR § 134.1(d).

For country of origin marking purposes, the country of origin of a good is the country of manufacture, production or growth of any article of foreign origin entering the United States or the country in which the good was last substantially transformed. See generally, 19 CFR § 134.1(b). A substantial transformation occurs when an imported article is used in a manufacturing process or operation that results in a new article having a new name, character or use different from that of the original imported article. See United States v. Gibson-Thomsen Co., 27 C.C.P.A. 267 (1940); National Hand Tool Corp. v. United States, 989 F.2d 1201 (Fed. Cir. 1992).

The Customs Service has previously held that the assembly of battery cells into battery packs does not result in a substantial transformation of the battery cells because the essential character of the cells does not change simply by being placed together in a plastic case. Moreover, there is no significant change in name, use or character to the battery cells when such an assembly occurs. See HQ 734393 (March 20, 1992). Therefore, the country of origin of the cells remains unchanged when assembled into the molded plastic case. Further, the country of origin of the case is the country of origin of the battery cells as the cells clearly constitute the essence of the finished article. Accordingly, in the instant case, the country of origin of the assembled battery pack is the United States. Thus, the battery pack does not need to be marked as to its country of origin (as it would not be considered an article of foreign origin within the meaning of section 304 of the Tariff Act of 1930, as amended).

Please be advised that the battery pack may be eligible for the partial exemption from duty provided by HTSUS subheading 9802.00.80 for American-made fabricated components that are returned to the United States as part of articles assembled abroad. The product must satisfy the requirements of HTSUS subheading 9802.00.80 and related provisions in the law (including U.S. note 4 to subchapter II to HTSUS chapter 98 and 19 CFR §§ 10.11 to 10.26).

HOLDING:

The battery pack is classified in subheading 8507.20.80.

The battery cells of U.S. origin do not need to be marked but the plastic container that holds the cells must be marked with its proper country of origin if the origin is other than the United States.

A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the Customs Service officer handling the transaction.

Sincerely,

John A. Durant, Director
Commercial Rulings Division

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