OT:RR:CTF:FTM H332516 JER
Mr. Rick Van Arnam
Barnes, Richardson & Colburn, LLP
1200 New Hampshire Avenue N.W.
Suite 725-B
Washington, DC 20036
RE: Country of Origin of Metal-Impregnated Chabazite Zeolites
Dear Mr. Arnam:
This letter is in response to the April 17, 2023, request for a binding ruling pursuant to 19
C.F.R. § 177.1, filed on behalf of BASF Corporation (“BASF” or “Requestor”), concerning the
country of origin of certain metal-impregnated zeolites. In connection with this ruling request,
BASF requests that certain information be treated as confidential. Inasmuch as this request
conforms to the requirements of 19 C.F.R. § 177.2(b)(7), the request for confidentiality is
approved. The information contained within brackets in the request will not be released to the
public and will be withheld from the published version of this ruling.
FACTS:
The Chinese originating material is a type of specially templated zeolites, which are
microporous aluminosilicates. The subject zeolite is non-molecular in structure and is described
as an inorganic solid, composed of [* * * *] in a ratio of [* * * *]. The structure is that of [* * *
*]. 1 The proton form zeolite is in a powder form prior to any of the final operations.
The manufacturing process is described by BASF as follows:
1
Chabazites fall within the larger family of minerals called zeolites. Naturally occurring Chabazite zeolite is a
tectosilicate mineral belonging to the gmelinite mineral family (a rare series of zeolites) with recognized types,
including Ca, K, Na, and Sr forms of chabazite, dependent on the exposed cations. Chabazite, Britannica.Com, ,
https://www.britannica.com/science/chabazite. Synthetic chabazite is relatively easy to prepare, and therefore, has
found numerous industrial applications, such as catalysts in the conversion of methanol to ethylene and as molecular
sieves to purified gases in low pressure streams. Chabazite Series, IZA Commission on Natural Zeolites,
https://www.iza-online.org/natural/Datasheets/Chabazite/chabazite.htm.
1. Chinese Operations
The basic input material is a type of specially templated zeolites, which are microporous
aluminosilicates. Its basic framework is created in China via a crystallization process,
wherein the organic template guides the structure of the aluminosilicate cage. The
organic template guide is burned off during a first calcination process. Next, ammonium
is added during an ion exchange stage. During a second calcination process ammonia is
burned off, resulting in a proton form zeolite (also known as the H form zeolite). It then
undergoes milling as a final production step.
2. Polish Operations
The proton form zeolite is then shipped to Poland for further processing.
In Poland, the zeolite in powder form is added to an initial mixing chamber. The metal [*
* * *] is delivered to the zeolite through an aqueous medium, in this case as a [* * * *].
This solution is added to the agitated powder to form a wet powder. This results in a
mixed proton and metal form zeolite, known as the metal-impregnated chabazite.
3. Production of Selective Catalytic Reduction (“SCR”) Catalysts in U.S. and Other
Third Countries
The metal-impregnated chabazite is then distributed worldwide to coating and canning
facilities, including to locations in the United States. At these facilities, the SCR
catalysts are produced. A [* * * *] is prepared, whereby [* * * *] is added to the metal-
impregnated chabazite, resulting in chabazite in a [* * * *] form. This form results in the
proton being exchanged with the [* * * *] ion, with the [* * * *] ion now functioning as
the active component used for converting the nitrogen oxide. The [* * * *] is mixed with
binders and then coated onto a ceramic substrate, resulting in the creation of a SCR
catalyst. Thereafter, the SCR catalyst is sent to a canner to be encased in a metal
container, after which the canned SCR catalyst is distributed to automotive original
equipment manufacturers worldwide.
ISSUE:
What is the country of origin of the metal impregnated zeolites?
LAW AND ANALYSIS:
The marking statute, section 304, 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 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. Congressional intent in
enacting 19 U.S.C. § 1304 was “that the ultimate purchaser should be able to know by an
inspection of the marking on the imported goods the country of which the goods is 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
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marking should influence his will.” United States v. Friedlaender & Co. Inc., 27 CCPA 297,
302, C.A.D. 104 (1940).
Part 134 of the U.S. Customs and Border Protection (“CBP”) Regulations (19 C.F.R. §
134) implements the country of origin marking requirements and exceptions of 19 U.S.C. §
1304. Section 134.1(b), CBP Regulations (19 C.F.R. § 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 [the marking laws and regulations].” A substantial transformation occurs when, as a
result of manufacturing process, a new and different article emerges, having a distinct name,
character or use, which is different from that originally possessed by the article or material
before being subjected to the manufacturing process. See United States v. Gibson-Thomsen Co.,
Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas Instruments, Inc. v. United States, 69 C.C.P.A.
142, 681 F.2d 778 (1982).
At issue is whether the impregnation of Chinese originating zeolites with metal in Poland,
resulting in a metal-impregnated chabazite, constitutes a substantial transformation of the
Chinese originating zeolite. Notwithstanding that no chemical reaction occurs when the zeolite
is impregnated with the metal nitrate solution, the Requestor contends that the operations in
Poland nevertheless result in the creation of a new and different article of commerce where the
metal-impregnated chabazite represents a product with a new name, character, and use from that
of the un-impregnated zeolite.
To determine whether a substantial transformation occurs, CBP considers the totality of
the circumstances and makes such determinations on a case-by-case basis. See National Hand
Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). A
substantial transformation occurs when, as a result of manufacturing process, a new and different
article emerges, having a distinct name, character or use, which is different from that originally
possessed by the article or material before being subjected to the manufacturing process. See
United States v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940); Texas
Instruments, Inc. v. United States, 69 C.C.P.A. 142, 681 F.2d 778 (1982). Moreover, the country
of origin of the item’s components, extent of the processing that occurs within a country, and
whether such processing renders a product with a new name, character, and use are primary
considerations in such cases, are also considerations. Id. If the manufacturing or combining
process is a minor one which leaves the identity of the article intact, a substantial transformation
has not occurred. Uniroyal, Inc. v. United States, 3 C.I.T. 220, 542 F. Supp. 1026 (1982), aff’d,
702 F.2d 1022 (Fed. Cir. 1983). Accordingly, if assembly operations are minimal or simple, as
opposed to complex or meaningful, they will generally not result in a substantial transformation.
BASF asserts that a substantial transformation occurs because the character, composition,
and essence of the zeolite has changed as a result of the metal impregnation such that the
finished metal-impregnated chabazite is a new product with a new character and a new use. To
establish this assertion, BASF conducted experiments where fourteen samples were analyzed for
the weight percentage of metal measured as metal oxide [* * * *]. Five of the samples in the
experiments were the proton form zeolite without the impregnated metal, while the remaining
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samples were the metal-impregnated chabazite zeolite. According to the Requestor, in the
proton form zeolite experiment, in addition to the metal being present, the metal is spread out
evenly throughout the chabazite and integrated into the chabazite framework. The results of the
experiments, BASF contends, reflect a change in the composition and character of the original
un-impregnated zeolite to amount to a substantial transformation. BASF also notes that
impregnating zeolite with metal changes the use and application of the product.
For example, in one experiment, a simulated diesel emission was run over two selective
catalytic reduction catalysts, one with the original zeolite and the other with the metal-
impregnated chabazite with both containing the [* * * *] ion form species. The NOx conversion
and N2O make were both measured. BASF claims that the results significantly reduced N2O for
the catalyst containing the metal-impregnated chabazite. BASF likens this experimental process
to the results of the operation conducted in Poland (i.e., the metal impregnation) and the ultimate
functional capacity of the catalyst. Based on these findings, BASF concludes that, as a result of
the metal impregnation, the proton form (also known as the H form Zeolite (Chabazite)) has a
different character, composition, essence and functionality as the impregnated Chabazite H and
[* * * *] form zeolite.
In the current application, the subject zeolite is used as the primary material to produce a
selective catalytic reduction catalyst that is used to produce a selective catalytic reduction unit, a
unit that is used within an emission control system. A selective catalytic reduction (“SCR”) unit
is an advanced active emissions control technology system that reduces tailpipe emissions of
nitrogen oxides (“NOx”) in diesel-powered vehicles. SCR systems functions are similar to that
of a catalytic converter system. However, with an SCR system, the oxidation and reduction
reactions that formerly occur within a single catalytic converter are split across two distinct
processes, the oxidizing catalyst process and the selective targeting of nitrogen oxides. 2,3
Generally speaking, SCR systems include a diesel engine, exhaust piping, a particulate matter
filter (“PM”), a diesel exhaust fuel tank (“DEF”), DEF hoses, a SCR unit, and a tailpipe. The
PM tank and SCR unit are typically ovoid tubular shaped (much like a catalytic converter) and
are usually made of stainless steel. 4, 5
BASF states that the SCR catalysts, in the presence of ammonia (“NH3), ultimately
reduces nitrogen oxide (“NOx”) into nitrogen and water; however, the SCR catalyst produces
nitrous oxide (“N2O”), which is harmful to the environment. To address the N2O issue, BASF
2
SCR, EGR and catalytic converters, What Are They? CarExpert.Com, https://www.carexpert.com.au/car-news/scr-
egr-and-catalytic-converters-what-are-they.
3
SCR systems work by injecting a reductant, typically a urea compound (or ammonia) called a diesel exhaust fluid
or DEF, into an exhaust stream, where it mixes with exhaust gas. As the gas-reductant mixture passes through the
system, it moves through a catalyst, where a chemical reaction converts the NOx in the exhaust into nitrogen (“N2”),
water (“H2O”) and carbon dioxide (“CO2”). The ammonia gas acts as a catalyst to break down the nitrogen oxides
into harmless nitrogen and water. Those (clean N2 and H2O) compounds are then released via the vehicle’s tailpipe
exhaust. See How it Works, Selective Catalytic Reduction, https://360.lubrizol.com/Resources/How-It-Works/How-
it-Works---Selective-Catalytic-Reduction; see also, https://www.sciencedirect.com/topics/engineering/selective-
catalytic-reduction.
4
SCR, How it Works, available at https://www.tersusdef.com/about/how-selective-catalytic-reduction-scr-works/
5
SCR, EGR and Catalytic Converters, Vivek Shah (Jan. 8, 2022, 8:00am) https://www.carexpert.com.au/car-
news/scr-egr-and-catalytic-converters-what-are-they; see also, How it Works, Selective Catalytic Reduction,
https://360.lubrizol.com/Resources/How-It-Works/How-it-Works---Selective-Catalytic-Reduction.
4
has developed a method to reduce the N2O output by impregnating one of the catalyst’s inputs
with metal, a type of chabazite creating a mixed proton and metal form zeolite, known as the
metal-impregnated chabazite. According to BASF, after the subject SCR catalyst (i.e., the metal-
impregnated chabazite zeolite) is produced, it is coated onto a ceramic substrate that is later
canned inside a metal container. That metal container, encasing the subject SCR catalyst, then
becomes the SCR unit ready for use within an SCR system. While BASF does not provide a
description for the “metal container” it is worth noting that such containers typically have an
ovoid-tube shape like most automotive mufflers or catalytic converters.
Zeolites are crystalline solids made of aluminum, oxygen, and silicon (or micro
aluminosilicate crystals), with a framework that forms cavities and channels also known as
molecular sieves. 6 Also, zeolites have a framework structure that encloses interconnected
cavities occupied by large metal cations (positively charged ions) and water molecules. 7 Their
open crystal structures permit small molecules to pass through while blocking large molecules. 8
As such, zeolites possess catalytic capabilities and have several industrial applications such as,
radioactive waste storage, separators in purification systems, filtration and in the catalytic
cracking of petroleum. 9 Our research indicates that impregnating zeolites with metal can
enhance the functionality of the zeolite itself and increase its catalytic capabilities. 10 A zeolite
with a metal catalyst added to it, makes it a bifunctional catalyst, having multiple applications,
including air filtration and oxidation. 11 For instance, zeolite impregnated with an Ag metal can
be used as a catalyst for ammonia oxidation. 12
The aforementioned definitions and functionalities are consistent with the Requestor’s
assertion that the proton form zeolite has catalytic capabilities. According to BASF, the metal
impregnation helps to improve the SCR catalyst’s main purpose which is to increase the
conversion of NOx to N2. BASF concludes that “the performance of the zeolite is significantly
improved in the SCR catalyst when the metal-impregnated chabazite is used.” Further explained
6
Zeolite, any member of a family of hydrated aluminosilicate minerals that contain alkali and alkaline-earth metals.
The zeolites are noted for their lability toward ion-exchange and reversible dehydration. They have a framework
structure that encloses interconnected cavities occupied by large metal cations (positively charged ions) and water
molecules. Supra note 1.
7
Id. (Last visited 03/26/2025).
8
Zeolite Applications, Lenntech, https://www.lenntech.com/library/media-filtration/zeolites-
applications.htm#:~:text=Zeolites%20can%20be%20shape%2Dselective,greater%20degree%20of%20product%20c
ontrol.
9
Zeolite Minerals: Chabazite, Rock & Gem Magazine (Aug. 28, 2019) https://www.rockngem.com/zeolite-
minerals-chabazite/.
10
Impact of Metal Impregnation of Commercial Zeolites in the Catalytic Pyrolysis of Real Mixture of Post-
Consumer Plastic Waste, Paucar-Sánchez, et al., https://www.mdpi.com/2073-4344/14/3/168.
11
See supra note 10; see also, supra note 11.
12
Ag-Cu modified ZSM-5 Zeolite to Effectively Eliminate NOx and Slip Ammonia from Coal-Fired Flu Gas:
Catalytic Performance and Characterization,
https://www.sciencedirect.com/science/article/abs/pii/S2213343722013343#:~:text=ZSM%2D5%20zeolites%20mo
dified%20with,2%20and%20H2O.; see also,
Metal-Impregnated Zeolite Y as Efficient Catalyst for the Direct Carbonation of Glycerol with CO2,
https://www.sciencedirect.com/science/article/abs/pii/S0926860X14007613 see also, Impregnation of Zeolite
Membranes for Enhanced Selectivity, https://www.sciencedirect.com/science/article/abs/pii/S0376738810007039
5
by BASF, the improved performance of the zeolites by the metal-impregnation is significant in
that it reduces the N2O output which is the fundamental purpose of the SCR catalysts.
In a substantial transformation analysis, the manufacturing process needs to go beyond
simply enhancing or improving the performance of the material at issue. Specifically, the
manufacturing process must satisfy the substantial transformation test: a change in name, a
change in character, and a change in use. Coastal States Marketing, Inc. v. United States, 10
C.I.T. 613, 646 F. Supp. 255 (1986), aff'd, 818 F.2d 860 (Fed. Cir. 1987) (Where the court
found that the improvement or enhancement of a Russian oil did not changed the essence or
fundamental use of the oil such that it had undergone a substantial transformation). In Coastal
States Marketing, the court stated that “despite the differences in the products and the
qualification of the Russian oil as a grade different from the blend, the essential character of the
Russian component as a fuel oil used primarily for heating remained unchanged.” Id., 10 C.I.T.
at 617, 646 F. Supp. at 259. See also, Qstar Techs v. State Dept. of Assessments & Taxation,
1994 Md. Tax Lexis 3. (Where the court found that substantial transformation did not occur as a
result of optical storage solutions and enhanced storage capacity in a computer). The court
reasoned that the production of the computer did not substantially transform the article into a
new and different form. QStar Techs at 6.
In keeping with the decision in Coastal States Marketing, we find that improving the
main purpose of the zeolite or enhancing its performance does not equate to a substantial
transformation of the proton form zeolite. Instead, the fundamental purpose remains unchanged
as does its intended use. Under the facts provided, the purpose of the zeolite, whether
impregnated or not, is to act as a catalyst. According to BASF, the proton form zeolite has some
catalytic capabilities prior to the metal-impregnation. Likewise, as previously established,
zeolite with a metal catalyst added to it, makes it a bifunctional catalyst with an increased
capacity for various industrial applications. Hence, the metal-impregnated chabazite zeolite
remains a zeolite, albeit a zeolite with improved capabilities. Therefore, it cannot be said that an
improvement or enhanced performance of the already existent catalytic capabilities results in a
substantial transformation of the subject zeolites’ character or intended use. In fact, a new
product with a change in name, character, and use does not emerge until after the manufacturing
process, in its entirety, is completed.
BASF contends that the production process in Poland results in a substantial
transformation of the proton form zeolite. To reach a determination, we examine the step-by-
step production process to determine when and where a substantial transformation takes place.
First, a raw proton form zeolite is created in China resulting in a powder proton form zeolite.
Next, this Chinese originating zeolite (powder) is shipped to Poland where it is impregnated with
a metal substance creating a metal-impregnated chabazite. At this stage, the proton zeolite’s
SCR capabilities are enhanced and improved by the metal-impregnation. However, in this form,
the metal-impregnated chabazite cannot be used inside a SCR emissions system as it is still a raw
material. Next, the metal-impregnated zeolite is shipped from Poland to facilities in other
countries worldwide, including the United States, where it is prepared for coating and canning.
According to BASF, it is “[a]t these facilities, the SCR catalysts are produced.”
6
At a facility in one of the other three countries (Country C), the metal-impregnated
chabazite is further processed into an ion form that is mixed with binders and coated onto a
ceramic substrate. This coating process in Country C includes the following steps of production;
a [* * * *] is prepared, whereby [* * * *] is added to the metal-impregnated chabazite, resulting
in chabazite in a [* * * *] form. This form results in the proton being exchanged with a [* * * *]
ion, with the [* * * *] ion now functioning as the active component used for converting the
nitrogen oxide. Here, the metal-impregnated chabazite zeolite is no longer the active nitrogen
oxide converting component. That role is now assumed by the ion [* * * *]. This ion [* * * *] is
then mixed with binders and then coated onto a round ceramic substrate, resulting in the creation
of the SCR catalyst. It is at this stage that the product assumes its first new physical and
chemical structure. Hence, during the operations in Country C, the product goes from a wet [* *
* *] to a round hardened ceramic substrate coated with the active nitrogen oxide converting
material. Finally, in Country C, the rounded ion coated ceramic substrate (i.e., the actual SCR
catalyst) is canned and encased inside a metal container (likely a round or ovid-tubular shaped
container). Once canned and encased, the final SCR unit is ready for use within a SCR
emissions control system. It is only after this final stage of production in Country C, that a new
product with a new name and new character emerges. It is at this point in production that the
product is ready for use as a complete SCR unit and is then shipped to equipment manufacturers
for wholesale or retail distribution.
Finding that the subject zeolite is not substantially transformed until the complete SCR
unit is produced in Country C, is consistent with a previous CBP ruling involving a similar
product. In NY N306097, dated September 16, 2019, CBP determined that a zeolite mixture was
substantially transformed into a spray dried copper zeolite catalyst when undergoing a
manufacturing process that included a chemical reaction resulting in a new chemical formula.
The new spray dried copper zeolite catalyst substance was permanently affixed to a ceramic
substrate. The coated ceramic substrate was then used as a catalytic converter in a vehicle. In
NY N306097, the process to produce the spray dried copper zeolite catalysts consisted of mixing
zeolite crystals, water, and metal salt together, pumping the slurry through a spray dryer to form
agglomerated dry particles, then sending the particles through a calcining oven to fix the copper
onto the zeolite. This copper coated zeolite was then affixed to a ceramic substrate to be used in
a catalytic converter and CBP found that the final production process created a new product with
a change in end-use.
Similar to the subject BASF SCR unit, the copper coated zeolite catalyst in NY N306097
functioned to reduce emissions. Also like the subject BASF SCR unit, the zeolite in NY
N306097 did not become a new product with a new use until after it was converted into a spray
dried copper zeolite catalyst, which was then coated and affixed to a ceramic substrate. The
copper coated ceramic substrate was then produced into the final catalytic converter. Hence,
contrary to Requestor’s assertion, the zeolite is not substantially transformed as a result of the
metal-impregnation that occurs in Poland. Instead, the zeolite is merely enhanced by the
operations that occur in Poland. When the zeolite is impregnated, the performance of the zeolite
is indeed improved. Yet, this improvement does not constitute a substantial transformation since
zeolites without metal impregnation already have catalytic capabilities and do not have a new
name, character, or use. Rather, the zeolite undergoes a change in character, and a change in
physical and chemical structure as a result of the production process to create the coated ceramic
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substrate. Moreover, another change in character and name occurs when the ion coated ceramic
substrate is canned and encased creating an actual SCR unit. Based on the foregoing, substantial
transformation of the Chinese originating zeolite takes place during the final phase of production
in Country C.
In sum, during this final stage of production, the actual SCR unit emerges and is ready for
use within a complete SCR emissions control system. Accordingly, the country of origin of the
Chinese originating zeolite does not change based on the production that takes place in Poland
(i.e., the country where the metal-impregnation occurs). Rather the zeolite is substantially
transformed in Country C where a new product with a new name, character, and use emerges.
Therefore, we find that the country of origin of the zeolite remains China until after the final
stage of production occurs in Country C, at which time the country of origin will be the country
where the final stage of production takes place.
HOLDING:
The country of origin of the metal-impregnated chabazite zeolite is China. The country
of origin of the finished SCR Unit depends on the country where the third and final stage of
production takes place.
This ruling does not address the applicability of trade remedies or other additional duties
beyond those discussed above. For information on such additional measures, please consult
https://www.cbp.gov/trade.
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the
assumption that all of the information furnished in connection with the ruling request and
incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and
complete in every material respect. The application of a ruling letter by [CBP] field office to the
transaction to which it is purported to relate is subject to the verification of the facts incorporated
in the ruling letter, a comparison of the transaction described therein to the actual transaction,
and the satisfaction of any conditions on which the ruling was based.”
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 of this ruling, it should be
brought to the attention of the CBP officer handling the transaction.
Sincerely,
Sarah Kafka, Chief
Food, Textiles and Marking Branch
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