OT:RR:CTF:EMAIN H296919 TPB
John P. Smirnow
Smirnow Law
1717 K Street, NW, Suite 1120
Washington, DC 20006
RE: Classification of certain crystalline silicon photovoltaic modules
Dear Mr. Smirnow:
This is in response to your letter of April 10, 2018, issued on behalf of Cypress
Creek Renewables (“Cypress Creek”), in which you request a binding ruling as to
whether certain crystalline silicon photovoltaic (“CSPV”) modules imported from South
Korea are subject to the February 7, 2018 safeguard measure on imports of certain
CSPV products implemented pursuant to Section 201 of the Trade Act of 1974, as
amended (19 U.S.C. §2252) (“Solar 201 safeguard”). Per your request, we offered a
meeting, pursuant to 19 C.F.R. §177.4, to further discuss the matter prior to issuing our
ruling, but did not receive a response. Our determination as to the applicability of the
Solar 201 safeguard is set forth below.
FACTS:
Your April 10, 2018, letter (“ruling request”) describes the articles to be imported
as “72-cell CSPV modules used in large-scale solar arrays.” This description is
consistent with an appended product data sheet, which pertains to “Q.ANTUM Solar
Modules” made up of “Q Cells.” According to the data sheet, each product consists of
72 monocrystalline photovoltaic cells mounted onto aluminum frame, each is equipped
with a junction box containing bypass diodes, as well as a cable and connector, and
each and has a measured output ranging up to 370 watts. Additionally, according to “an
overview of the anticipated cell and module manufacturing processes” appended as a
separate attachment, the cells range from 180 to 200 micrometers in thickness.
In your ruling request, you describe the manufacturing process for these products
as follows:
Malaysian-origin silicon substrates are exposed to phosphorus gas at a high
temperature. The phosphorus gas and oxidation of the substrate surface results in a thin
phosphosilicate glass (“PSG”) layer on the substrate surface, which combined with the
furnace high temperature results in molecular-level diffusion of phosphorous into the
substrate. Importantly, the formation of the PSG layer during the diffusion process
creates a positive-negative (“P/N”) junction with the wafer. The P/N junction is what
enables a CSPV cell to produce electricity. The diffusion process represents an
estimated 13 percent of the capital expenditure cots (“capex”) for equipment and facilities
for the production processes at issue. The diffuse CSPV cell is then exported to South
Korea.
Upon importation into South Korea, the diffused CSPV cells first undergo a
chemical etching and edge isolation process, which separates the positive and negative
layers, and a washing process to remove any remaining surface particles. The etching
and edge isolation process represents approximately 7.5 percent of capex.
A silicon nitride anti-reflective coating is then applied to reduce reflection and
increase the amount of light absorbed into the cells. The cells may also undergo a
passivation process. First, a rear surface passivation film is applied. Second, lasers or
chemicals are used to open the rear passivation layer and create pockets in the film to
absorb more light. Collectively, these light absorption enhancement processes represent
approximately 8-10 percent of capex.
The CSPV cells then undergo a contact printing and drying process. During this
step, metal lines are printed on the front and rear of the cell to collect electricity produced
by the cell. The cells are tested under simulated sunlight conditions, and then classified
and sorted according to their characteristics and efficiencies. The printing process
represents approximately 13 percent of capex, with much of the costs attributable to the
need for handling high-cost silver paste.
The CSPV cells are then assembled into solar modules. First, a series of CSPV
cells is soldered together. A Piece of glass and sheet of ethyl vinyl acetate (“EVA”) are
p9laced on the production line, followed by six strings of 12 CSPV cells. A second sheet
of EVA, sealant and back sheet are then added. The combined materials are then
laminated in a vacuum and cured. At this stage, the completed article is referred to as a
“laminate.” Aluminum frames are subsequently attached to the laminate and a junction
box is attached to the back side of the module. The finished CSPV modules are then
cleaned and inspected. The module assembly process represents approximately 32
percent of capex.
(Emphasis in original).
You assert that because assembly of the CSPV panels at issue includes certain
steps undertaken in the U.S., specifically the creation of the positive-negative (“p/n”)
junction in the cells making up the panels, the products fall outside the scope of the
Solar 201 safeguard.
ISSUE:
Whether the CSPV products at issue fall within the scope of the Solar 201
safeguard and are consequently subject to increased duties.
2
LAW AND ANALYSIS:
Merchandise imported into the United States is classified under the HTSUS.
Tariff classification is governed by the principles set forth in the General Rules of
Interpretation (GRIs) and, in the absence of special language or context which requires
otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional
U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory
provisions of law for all purposes.
GRI 1 requires that classification be determined first according to the terms of the
headings of the tariff schedule and any relative section or chapter notes. In the event
that the goods cannot be classified solely on the basis of GRI 1, and if the heading and
legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be
applied in order.
The Harmonized Commodity Description and Coding System Explanatory Notes
(“ENs”) constitute the official interpretation of the Harmonized System at the
international level. While neither legally binding nor dispositive, the ENs provide a
commentary on the scope of each heading of the HTSUS and are generally indicative of
the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128
(August 23, 1989).
The Solar 201 safeguard was implemented in accordance with Presidential
Proclamation 9693, dated January 23, 2018, which was promulgated in pursuant to
Section 201 of the Trade Act of 1974, as amended (19 U.S.C. §2252). See Fed. Reg.
Vol. 83, No. 17 (Jan. 25, 2018). The Solar 201 safeguard establishes a tariff-rate quota
and additional duties on imports of CSPV “cells” and “modules.” Id. In particular, the
proclamation calls for amendment of Chapter 99, Subchapter III, HTSUS, to create
subheadings 9903.45.21 and 9903.45.22, which apply to CSPV cells, and 9903.45.25,
which applies to CSPV modules. Id. The proclamation also calls for amendment of
Chapter 99, Subchapter III, to create a new legal note, Note 18, to define the products
classifiable in subheadings 9903.45.21 to 9903.45.25 and set forth the additional rates
of duties to be applied to these products. Id. These amendments to Chapter 99 went
into effect on February 7, 2018.
The HTSUS headings and subheadings under consideration are as follows:
8541 Diodes, transistors and similar semiconductor devices; photosensitive semiconductor
devices, including photovoltaic cells whether or not assembled in modules or made up
into panels; light-emitting diodes (LED); mounted piezoelectric crystals; parts thereof:
Photosensitive semiconductor devices, including photovoltaic cells whether or
not assembled in modules or made up into panels; light-emitting diodes (LED):
8541.42 Photovoltaic cells not assembled in modules or made up into panels
8541.43 Photovoltaic cells assembled in modules or made up into panels
3
8541.43.0010 Crystalline silicon photovoltaic cells of a kind
described in statistical note 10 1 to this chapter
Crystalline silicon photovoltaic cells, as defined in note 18(c) to this subchapter,
when the product or originating good of a country other than a country described
in note 18(b) to this subchapter, except as provided in heading 9903.45.27:
9903.45.21 If entered in an annual aggregate quantity not exceeding 12.5 gigawatts,
under the terms of such note…
9903.45.22 Other…
9903.45.25 Modules as defined in note 18(g) to this subchapter, when the product or
originating good of a country other than a country described in note 18(b) to this
subchapter, except as provided in heading 9903.45.27 or heading 9903.45.29…
9903.45.27 Crystalline silicon photovoltaic cells, as defined in note 18(c) to this subchapter,
and modules as defined in note 18(g) to this subchapter, all the foregoing when
the product and originating good of Canada…
9903.45.29 Bifacial solar panels, as defined in and meeting the conditions of U.S. note 18(j)
to this subchapter, that absorb light and generate electricity on each side of the
panel and that consist of only bifacial solar cells that absorb light and generate
electricity on each side of the cells…
Note 18 to Subchapter III of Chapter 99 provides, in relevant part, as follows:
(a) Subheadings 9903.45.21 through 9903.45.29 and any superior texts thereto establish
temporary modifications applicable to entries of goods described herein and classified
in the enumerated provisions of chapter 85 of the tariff schedule. Whenever any such
subheading specifies that the annual aggregate quantity of such goods shall not
exceed the quantity established under the terms of this note, when such goods are not
the product of a country enumerated in subdivision (b) of this note, any entry of such
goods that is in excess of the quantity specified for such provision shall be entered
under the over-quota subheading set forth herein for such goods. All such goods shall
be subject to duty as provided herein; and such duties shall be cumulative and
imposed in addition to the rate of duty established for any such goods in chapter 85 of
the tariff schedule, except as may be specified for duties imposed under the Rates of
Duty 2 column.
(b) For the purposes of this note and the application of subheadings 9903.45.21 through
9903.45.29, inclusive, the following developing countries that are members of the
World Trade Organization shall not be subject to the rates of duty and tariff-rate
quotas provided for therein:
1 Chapter 85 Statistical Note 10: For the purposes of statistical reporting numbers 8541.42.0010 and 8541.43.0010, the term
“crystalline silicon photovoltaic cells” means crystalline silicon photovoltaic cells of a thickness equal to or greater than 20
micrometers, having a p/n junction (or variant thereof) formed by any means, whether or not the cell imported under statistical
reporting number 8541.42.0010 (or subassemblies thereof imported under statistical reporting number 8541.43.0010) has
undergone other processing, including, but not limited to, cleaning, etching, coating, and/or addition of materials (including, but not
limited to, metallization and conductor patterns) to collect and forward the electricity that is generated by the cell. Such cells include
photovoltaic cells that contain crystalline silicon in addition to other photovoltaic materials. This includes, but is not limited to,
passivated emitter rear contact cells, heterojunction with intrinsic thin-layer cells, and other so-called hybrid cells.
4
Afghanistan, Albania, Algeria, Angola, Armenia, Azerbaijan, Belize, Benin, Bhutan,
Bolivia, Bosnia and Herzegovina, Botswana, Brazil, Burkina Faso, Burma, Burundi,
Cambodia, Cameroon, Cape Verde, Central African Republic, Chad, Comoros, Congo
(Brazzaville), Congo (Kinshasa), Côte d’Ivoire, Djibouti, Dominica,
Ecuador, Egypt, Eritrea, Ethiopia, Fiji, Gabon, The Gambia, Georgia, Ghana, Grenada,
Guinea, Guinea-Bissau, Guyana, Haiti, Indonesia, Iraq, Jamaica, Jordan, Kazakhstan,
Kenya, Kiribati, Kosovo, Kyrgyzstan, Lebanon, Lesotho, Liberia,
Madagascar, Malawi, Maldives, Mali, Mauritania, Mauritius, Moldova, Mongolia,
Montenegro, Mozambique, Namibia, Nepal, Niger, Nigeria, North Macedonia, Pakistan,
Papua New Guinea, Paraguay, Rwanda, Saint Lucia, Saint Vincent
and the Grenadines, Samoa, Sao Tomé and Principe, Senegal, Serbia, Sierra Leone,
Solomon Island, Somalia, South Africa, South Sudan, Sri Lanka, Suriname, Swaziland
[Eswatini], Tanzania, Timor-Leste, Togo, Tonga, Tunisia, Tuvalu,
Uganda, Ukraine, Uzbekistan, Vanuatu, Yemen (Republic of), Zambia and Zimbabwe.
(c)
(i) For the purposes of subheadings 9903.45.21 and 9903.45.22 and heading
9903.45.27, except as otherwise provided herein, the term “crystalline silicon
photovoltaic cells” (“CSPV cells”) means crystalline silicon photovoltaic cells of a
thickness equal to or greater than 20 micrometers, having a p/n junction (or
variant thereof) formed by any means, whether or not the cell (or subassemblies
thereof provided for in subheading 8541.42.00 and imported under statistical
reporting number 8541.42.0010) has undergone other processing, including, but
not limited to, cleaning, etching, coating, and/or addition of materials (including,
but not limited to, metallization and conductor patterns) to collect and forward the
electricity that is generated by the cell. Such cells include photovoltaic cells that
contain crystalline silicon in addition to other photovoltaic materials. This
includes, but is not limited to, passivated emitter rear contact cells, heterojunction
with intrinsic thin-layer cells, and other so-called hybrid cells. Subheadings
9903.45.21 and 9903.45.22 include goods presented in cell form and which at
the time of importation are not presented assembled into circuits, laminates or
modules or made up into panels.
(ii) Subheadings 9903.45.21 and 9903.45.22 and heading 9903.45.27 shall
not cover—
* * *
(3) CSPV cells, whether or not partially or fully assembled into other
products, if such CSPV cells were manufactured in the United States.
* * *
(g) Subject to the provisions of subdivision (c)(iii) of this note, for purposes of subheading
9903.45.25 and 9903.45.27 to this subchapter, the term “modules” shall include the
following goods provided for in subheading 8541.43 of the tariff schedule: a module is a
joined group of CSPV cells, as such cells are defined in subdivision (c) of this note,
regardless of the number of cells or the shape of the joined group, that are capable of
generating electricity. Also included as a “module” are goods each known as a “panel”
comprising a CSPV cell that has undergone any processing, assembly, or
interconnection (including, but not limited to, assembly into a laminate). Such CSPV cells
assembled into modules or made up into panels include goods of a type reported for
statistical purposes under statistical reporting number 8541.43.0010. Such goods also
include (i) CSPV cells which are presented attached to inverters or batteries of
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subheading 8501.80.10 or 8507.20.80, respectively; and (ii) CSPV cells classifiable as
DC generators of subheading 8501.71.00 or 8501.72.10.
(emphasis added).
Subheading 9903.45.25 provides for “modules as defined in note 18(g) of this
subchapter” so long as these are “originating…product of a country other than a country
described in note 18(b).” A given CSPV product accordingly falls within the ambit of
subheading 9903.45.25 where: (1) It satisfies the description of “module” set forth in
Note 18(g); and (2) it is a product of a country other than those listed in Note 18(b). We
assess these criteria in turn.
(1) Whether the products at issue qualify as “modules” for purposes of Note
18(g) to Chapter 99
According to Note 18(g) to Chapter 99, “modules” within the meaning of
subheading 9903.45.25 include, inter alia, products of subheading 8541.43, HTSUS,
consisting of “a joined group of CSPV cells…capable of generating electricity.”
Regarding the latter criterion, CSPV cells are defined in Note 18(c) as “crystalline silicon
photovoltaic cells of a thickness equal to or greater than 20 micrometers…having a p/n
junction.”
Regarding the former, products of subheading 8541.43, HTSUS, include, inter
alia, “photovoltaic cells assembled in modules or made up into panels.” CBP has
previously determined that modules of heading 8541, and specifically of former
subheading 8541.40.60, may include junction boxes equipped with bypass diodes,
cables, and connectors. See Headquarters Ruling Letter (“HQ”) H084604, dated May 3,
2010, and HQ H250768, dated December 2, 2016. However, modules equipped with
blocking diodes, inverters, or other components which “supply power directly to an
external load” are instead classified in heading 8501, HTSUS. See HQ H255441, dated
August 30, 2016; see also EN 85.41 (“The heading does not cover panels or modules
equipped with elements…which supply the power directly to, for example, a motor, an
electrolyser (heading 85.01)”).
Here, the products at issue meet the narrative description of “modules” for
purposes of Note 18(g) to Chapter 99. According to the above-referenced portions of
your ruling request and its attachments, the products consist of multiple interconnected
monocrystalline photovoltaic cells, each of which far exceeds 20 micrometers in
thickness and, by virtue of its p/n junction, is capable of generating electricity. This is
confirmed by the product literature, which even refers to the products as “solar
modules.” As such, they consist of a “joined group of CSPV cells capable of generating
electricity.”
Moreover, the modules are “goods provided for in subheading 8541.43” for
purposes of Note 1(g). The product data sheet indicates that they are equipped with
junction boxes, bypass diodes, cables, and connectors, all which are permissible
components for purposes of the subheading. However, there is no indication in the
6
product data sheet or elsewhere that they include blocking diodes, inverters, or any
other recognized components for supplying power directly to an external apparatus. We
accordingly find that the subject modules qualify as “modules as defined in note 18(g)”
for purposes of subheading 9903.45.25.
(2) Whether the subject merchandise is from a country other than those listed in
Note 18(b)
Heading 9903.45.25 applies to modules which are “the product or originating
good of a country other than a country described in note 18(b).” Note 18(b) in turn
provides that “for the purposes of this note and the application of subheadings
9903.45.21 through 9903.45.29,” certain enumerated “developing countries that are
members of the World Trade Organization shall not be subject to the rates of duty…
provided for therein.” As stated above, the modules at issue are partially produced in
South Korea, which is not included in the list of countries exempt from the rates of duty
appertaining to heading 9903.45.25. We therefore must determine whether the
production steps undertaken in South Korea render the modules “products” or
“originating goods” of South Korea, in which case they fall within the scope of the
subheading.
In cases involving subheadings of heading 9903 established pursuant to
presidential proclamations, CBP has consistently applied a traditional “substantial
transformation” analysis for purposes of interpreting “product of.” See HQ 563205,
dated June 28, 2006; HQ 563211, dated April 26, 2005; and HQ 734479, dated January
29, 1993; see also Belcrest Linens v. United States, 741 F.2d 1368, 1370-71 (Fed. Cir.
1984) (finding that “the term ‘product of’ at the least includes manufactured articles of
such country or area” and that substantial transformation “is essentially the test
used…in determining whether an article is a manufacture of a given country”).
Specifically in the context of a Section 201 safeguard measure, we have determined
that “substantial transformation” governs the analysis where the appurtenant “Special”
Rate of Duty column does not otherwise indicate that an alternative origin-determinative
rule is to be used. See HQ 563205. We further note that the “Special” Rate of Duty
column for heading 9903.45.25 does not contain any special program indicators. 2
Consequently, for purposes of the Solar 201 safeguard, “CSPV modules” imported into
the U.S. are “products of” the country in which they were last substantially transformed.
Determining when and where a substantial transformation occurs calls for a fact-
sensitive analysis based on consideration of a “totality of factors.” Energizer Battery,
Inc. v. United States, 190 F. Supp. 3d 1308, 1317-18 (Ct. Int’l Trade 2016) (citing Ran-
Paige Co., Inc. v. United States, 35 Fed. Cl. 117 (1996)). It is well-established that an
article is substantially transformed where it emerges from a process with a “distinctive
name, character or use.” Id. at 1318; see also Belcrest Linens, 741 F.2d at 1372 (Fed.
Cir. 1984) (confirming the general applicability of the “name, character or use” test in
customs law). In addition, “subsidiary” factors such as the extent and nature of
2 As such, the product-specific and other origin-determinative rules set forth in General Note 33, HTSUS,
which codifies the U.S.-Korea Free Trade Agreement, are not applicable.
7
operations performed, value added in post-importation processing, change from
producer to consumer goods, or shifts in tariff provisions may indicate substantial
transformation. See Energizer Battery, 190 F. Supp. 3d at 1319.
In applying the standard, courts have primarily focused on changes in character
or use, although change in name is also indicative. Id.; see also Ferrostaal Metals
Corp. v. United States, 664 F. Supp. 535, 541 (Ct. Int’l Trade 1987) (“The satisfaction of
the name criterion in this case lends support to plaintiffs’ claim.”). Courts have found
change in character where an article undergoes a significant alteration, extending
beyond incremental improvement or simple assembly, to its form or properties. See
Energizer Battery, 190 F. Supp. 3d at 1318-19. In the particularly instructive Ferrostaal
Metals, the Court of International Trade (“C.I.T”) determined that cold-rolled steel sheet
had undergone change in character and use when subjected to an annealing and
galvanization process which “transforms a strong, brittle product…into a durable,
corrosion-resistant product…formable for a range of commercial applications.” 664 F.
Supp. at 540; see also Energizer Battery, 190 F. Supp. 3d at 1318 (positively citing
Ferrostaal). The C.I.T. considered that “the imported sheet has a different character
from the standpoint of durability,” finding in turn that the new “mechanical properties and
chemical composition” imparted by the processing amounted to a change in character.
664 F. Supp. at 540.
Extrapolating the rationale from Ferrostaal to the instant scenario, we find that
the CSPV modules at issue undergo a change of character in South Korea. The articles
initially imported into South Korea consist of silicon substrates in which phosphorous
has been diffused, in a process known as “doping,” to create a negatively charged
phosphosilicate layer terminating in a p/n junction. Again, the p/n junction enables the
substrate to generate electrical power when exposed to light. Specifically, the junction
creates an electrical field across which a current of electrons, having been “freed” from
their chemical bonds by exposure to light energy, are able to flow. However, the
electrons do not actually exit the substrate to provide electricity at this stage. Moreover,
a significant portion of the light to which the substrate is exposed is reflected, greatly
reducing the capacity to generate current. In other words, the substrate, while in the
early formative stages of a mechanism for producing electricity, lacks any utility as such
at the time of importation into South Korea.
Following importation, the doped substrates undergo etching and edge isolation,
deposition of an anti-reflective coating, passivation, and deposition of metal lines –
referred to in industry as gridlines and busbars – on the face and backside, after which
they are considered finished CSPV cells. As you state, the anti-reflective coating and
passivation increase absorption of light and, in turn, the efficiency of power generation.
Perhaps more importantly, the deposition of metal lines enables the current to flow
outside of the cell. Specifically, the gridlines function as conduits for the transport of
freed electrons to the busbars, which in turn direct current along a set path. See
Crystalline Silicon Photovoltaic Cells (Whether or not Partially or Fully Assembled into
Other Products), Inv. No. TA-201-75, USITC Pub. 4739, I-11 (Nov. 2017) (Final), and
Crystalline Silicon Photovoltaic Cells and Modules from China, Inv. Nos. 701-TA-481
8
and 731-TA-1190, 9 (Nov. 2012) (Final) (citing industry report in stating that “when
sunlight hits the modules, it knocks loose electrons that flow into the cells’ thin metal
‘fingers’ and conduct electricity to the busbars”). It is at this stage that the current
generated is first dispensed for use. These changes alone, by which a substrate
creating moderate current is transformed into a cell that both efficiently produces and
disseminates electricity, can be said to impart the articles with a “different character
from the standpoint of electrical conductivity.” See Ferrostaal, 664 F. Supp. at 540.
Moreover, alteration of the substrates in South Korea to this end goes beyond
their completion into CSPV cells. As you state, the completed cells are soldered
together to form six 12-cell strings, laminated, and affixed to aluminum frames to which
junction boxes are attached, at which point they are in the recognized form of CSPV
modules. These modules, which each contain 72 cells, accumulate the current
generated by the individual cells to produce 370 watts per hour at peak capacity. This
is a dramatic increase from the modest current generated by the substrates imported
into South Korea. In sum, what enters South Korea as phosphosilicate substrates
leaves and enters the U.S. as high-output photovoltaic modules, both in name and
character. Regarding the latter, this is a change extending far beyond mere cosmetic
modification or simple assembly. In fact, the changes in the substrates’ physical
properties – via the addition of an anti-reflective coating, deposition of metal conduits,
and joinder with other cells to form modules – are equal in magnitude to, if not greater
than, those resulting from the annealing and galvanization in Ferrostaal.
Furthermore, the “subsidiary” factors referenced above support a finding that this
process resulted in a substantial transformation in South Korea. You indicate that the
vast majority of the processing steps are undertaken in South Korea, and that 53 to 55
percent of the total capital expenditure costs are attributable to these steps.
Additionally, as discussed above, the articles are transformed from producer to
consumer goods in the course of this processing. We accordingly find that, based on
the facts provided, the CSPV modules to be imported into the U.S. are substantially
transformed in South Korea. 3 We note that this determination is consistent with our
prior treatment of PV modules that undergo comparable production processes. See HQ
H095409, dated September 29, 2010 (ruling that modules were substantially
transformed in the U.S. where “complex and meaningful assembly operations,”
including deposition of materials to form photovoltaic cells and construction of modules
from the cells, were undertaken there). In turn, the CSPV modules are “products of”
South Korea for purposes of subheading 9903.45.25, HTSUS.
3 We note that the third factor in the “name, character or use” test – i.e., change in name – has been
stated to turn on “whether the components have a pre-determined end-use at the time of importation.”
Energizer Battery, 190 F. Supp. 3d at 1322. We further note, however, that the C.I.T. has previously
stated: “The fact that there was only one predetermined use of imported article does not preclude the
finding of substantial transformation…the determination of substantial transformation must be based on
the totality of the evidence.” See Nat’l Hand Tool Corp. v. United States, 16 C.I.T. 308, 310 (1992) (citing
Torrington Co., v. United States, 764 F.2d 1563 (Fed. Cir. 1985)). Therefore, even assuming arguendo
that the substrates’ use was predetermined at the time of their importation in to South Korea, the totality
of supporting factors, i.e., change in name, change in character, and “subsidiary” factors – justify a finding
that the products were substantially transformed in South Korea.
9
In your ruling request, you contend that the processing undertaken in South
Korea does not effect a substantial transformation. In so doing, you cite prior CBP
rulings, including HQ H261693, dated September 16, 2015, and NY N292923, dated
January 18, 2018, for the proposition that “once the solar cell is able to generate
electricity, any subsequent steps in the manufacturing process will not effect a
substantial transformation.” This proposition, however, is not supported by the cited
rulings. In HQ H261693, we determined that the assembly of finished solar cells into
modules could not be considered a substantial transformation. We did not go so far as
to dismiss all processing following doping, including the steps needed to extract the
electricity generated by the substrate, as falling short of substantial transformation. The
substantial transformation test was not applied at all in NY N292923, which pertained
only to the classification of doped substrates under the HTSUS. CBP’s determination
that the substrates qualified as “parts” of solar cells when imported is not tantamount to
a determination that they were substantially transformed when doped.
Your primary contention is that the CSPV modules are exempt from the Solar
201 safeguard on account of the exclusion set forth in Note 18(c)(ii)(3) to Chapter 99.
Note 18(c)(ii)(3) states that “[s]ubheadings 9903.45.21 and 9903.45.22 shall not
cover…CSPV cells, whether or not partially or fully assembled into other products, if
such CSPV cells were manufactured in the United States.” You contend that because
“the single most important attribute of a CSPV cell” is the p/n junction, which is created
in the U.S., the cells are “manufactured in” the U.S. for purposes of the exclusion.
However, by its own plain terms, Note 18(c)(ii)(3) applies only to CSPV cells of
9903.45.21 and 9903.45.22, rather than modules of heading 9903.45.25 into which they
are assembled. Accordingly, even assuming arguendo that the cells making up the
instant modules can be considered “manufactured in the U.S.,” those modules are not
exempt under Note 18(c)(ii)(3). 4
The sole relevant origin inquiry, therefore, is whether the imported products
undergo a substantial transformation in South Korea. As discussed above, they do.
Because they are accordingly “modules” which are “the product of a country other than
a country described in note 18(b),” they fall within the scope of heading 9903.45.25,
HTSUS.
HOLDING:
Based on the facts of this case, the CSPV modules are subject to the Solar 201
safeguard. As products of heading 9903.45.25, they are dutiable at the rates set forth in
Chapter 99, Subchapter III, Note 18(f), HTSUS, in addition to any rates applicable under
statistical reporting number 8541.43.0010, HTSUS Annotated.
4 Nor can the modules be described simply as “CSPV cells assembled into other products,” within the
meaning of subheadings 9903.45.21 and 9903.45.22, and heading 9903.45.27, for purposes of triggering
the exclusion in Note 18(c)(ii)(3). Note 18(c)(i), which defines products of subheadings 9903.45.21 and
9903.45.22 excludes from those subheadings CSPV cells “presented assembled into…modules or made
up into panels.”
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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 CBP officer handling the transaction.
Sincerely,
Gregory Connor, Chief
Electronics, Machinery, Automotive, and
International Nomenclature Branch
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