NY N018898 - The country of origin of further processed steam activated carbon from China. - United States International Trade Commision Rulings

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NY N018898

November 16, 2007

CLA-2-38:OT:RR:E:NC:N2:237

CATEGORY: MARKING

Ms. Lizbeth R. Levinson
Garvey Schubert Barer
1000 Potomac Street, N.W.
Washington, D.C. 20007-3501

RE: The country of origin of further processed steam activated carbon from China.

Dear Ms. Levinson:

In your letter dated October 23, 2007, on behalf of the M. L. Ball Company, you requested a country of origin ruling. The imported product is described as Chinese steam activated carbon that is further processed by simply baking in Korea. You state that the activated carbon is used inter alia to purify water and to eliminate contaminants from industrial waste water.

Steam activated carbon is produced in China by placing pellets of char in a kiln maintained at about 1000 degrees Celsius. Pellets, having a Carbon Tetrachloride (CTC) Activity that reaches 45% and measuring between 3-8 millimeters, are then shipped to Korea where they are simply baked in furnaces until the adsorption level is increased to a CTC minimum of 62% and a maximum of 70%. Based on your prior rulings submissions, on behalf of the M. L. Ball Company, the activated carbon produced in China must be dried by baking prior to packaging in order to remove the moisture content naturally adsorbed from the atmosphere during storage and shipping.

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 U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or container) will permit, in such a manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article.

Part 134, Customs Regulations (19 CFR Part 134), implements the country of origin marking requirements and exceptions of 19 U.S.C.1304. 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 U.S. 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. 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)).

In your case, the issue for consideration is whether baking Chinese activated carbon in another country effects a substantial transformation. In determining whether baking in another country constitutes a substantial transformation, the issue is whether the activated carbon emerges from the baking treatment with a new name, character, or use which differs from the original material subjected to the further processing.

The activation of carbon is described as the process of treating carbon to open an enormous number of pores. In the activated state, carbon adsorbs gases, liquids, and solids. Activation of carbon in the form of charcoal is accomplished by feeding steam into a kiln maintained at about 1000 C (thermal activation). Activation of carbon in the form of cellulosic material is accomplished by feeding the chemically impregnated material into the kiln (chemical activation). This tends to remove the adsorbed hydrocarbons from the surface and leaves a porous structure. The surface area of activated carbon produced is about 1000 square meters per gram. Variables such as pore size and surface area are controlled by the kiln temperature and residence time in the kiln. The adsorbing property of charcoal is related to the large surface area present.

Explanatory Note 38.02(A), HTSUS, covers carbon and mineral substances said to be activated when their superficial structure has been modified by appropriate treatment (with heat, chemicals, etc.) in order to make them suitable for certain purposes, such as decolourising, gas or moisture adsorption, catalysis, ion-exchange or filtering. Explanatory Note 38.02(A)(II)(a), HTSUS, covers activated carbon usually obtained by treating vegetable, mineral or other carbon (wood charcoal, coconut shell carbon, peat, lignite, coal, anthracite, etc.) at a high temperature in the presence of steam, carbon dioxide or other gases (thermal activation), or by dry calcinations of cellulosic materials impregnated with solutions of certain chemicals (chemical activation).

After activation, steam activated and chemically activated carbons can be further treated depending on the application for which they will be used. Acid washing is often used for certain activated carbons that have a high ash content. Chemically activated carbons may also retain some of the activating agent (usually phosphoric acid or zinc chloride) that could leach out during processing and make them unacceptable for certain applications such as aquarium filters or pharmaceutical purification. Washing the activated carbon with hydrochloric or other acids removes minerals and ash resulting in a higher purity product. Acid washed, activated carbons are often used in applications where process streams are acidic, such as purification of corn syrup. For some specialty applications, the activated carbon may be impregnated with metals or other chemicals. This impregnation would give the activated carbon the ability to adsorb a particular impurity or catalyze a desired reaction. In some instances, used or spent activated carbon can be reactivated. Carbon is reactivated by thermally or chemically removing chemical species adsorbed onto the spent carbon. However, once the activated carbon has been used, it may take on the toxicity of adsorbed materials. In many cases there may be a loss in comparative efficiency when compared to the original virgin material. In processes where environmentally regulated chemicals are being captured on activated carbon, strict bookkeeping of the amount of regulated chemical produced and how it is disposed of is required.

In your letter, you take the position that simply baking Chinese steam activated in a second country substantially transforms the already steam activated carbon product of China. As the basis of your position, you cite a prior ruling N006236 issued to you on March 2, 2007. However, in that prior ruling, based on your descriptions, the acid washing process resulted in substantial changes in adsorption capacity, purity, function, etc. of the already activated carbon, for example, activated carbon with a Carbon Tetrachloride (CTC) Activity of 60% minimum was increased to a CTC of 88% minimum. ASTM D3467 Standard Test Method for Carbon Tetrachloride (CTC) Activity is a determination of the activation level of the activated carbon. ASTM D3467 requires drying the test sample using the procedure described in Test Method D2867. ASTM D2867 provides that the oven-drying method is used when water is the only volatile material present and is in significant quantities. The moisture content of the activated carbon is significant because it is often required to define and express its adsorption properties in relation to the net weight of the carbon. Moisture removal permits specified concentrations of carbon tetrachloride in the air flow through the carbon sample. In this case the already activated carbon is simply baked. This oven-drying or baking procedure simply removes the moisture.

Under the proposed scenario, steam activated carbon is produced in China by placing pellets of char in a kiln maintained at about 1000 degrees Celsius. Pellets, having a Carbon Tetrachloride (CTC) Activity that reaches 45% and measuring between 3-8 millimeters, are then shipped to Korea where they are simply baked in furnaces until the adsorption level is increased to a CTC minimum of 62% and a maximum of 70%. Based on your prior rulings submissions, on behalf of the M. L. Ball Company, the activated carbon produced in China must be dried by baking prior to packaging in order to remove the moisture content (Note: NY Rulings N013369 dated June 24, 2007 and N015883 dated September 12, 2007). Large amounts of moisture are naturally adsorbed from the atmosphere during storage in China and shipping overseas from China to Korea in the cargo holds of bulk cargo carriers. The moisture thus adsorbed is great. The process of baking the already activated carbon removes the moisture.

The process of baking to remove moisture naturally adsorbed during storage and shipping is routinely necessary and incidental to packaging. This oven-drying or baking procedure simply removes the moisture. The Chinese steam activated carbon has not been substantially transformed into an article with a new name, character, or use different from that possessed by the article prior to the further processing. Therefore, the country of origin of the further processed Chinese steam activated carbon is China.

This merchandise may be subject to the requirements of the Toxic Substances Control Act (TSCA), which are administered by the U.S. Environmental Protection Agency. Information on the TSCA can be obtained by contacting the EPA at 401 M Street, S.W., Washington, D.C. 20460, telephone number (202) 554-1404, or by visiting their website at www.epa.gov.

Certain activated carbon from the People's Republic of China may be subject to anti-dumping duties administered by the U.S. Department of Commerce, Import Administration. You may contact Catherine Bertrand, AD/CVD Operations, Office 9, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone number : (202) 482- 3207; or by visiting their website at www.IA.ITA.DOC.GOV.

This ruling is being issued under the provisions of Part 177 of the Customs 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. For any questions regarding the ruling, contact National Import Specialist Frank Cantone at (646) 733-3038.

Sincerely,

Robert B. Swierupski
Director,

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