Notice of Issuance of Final Determination Concerning Certain Analytical-Grade Acetonitrile, 57629-57631 [2015-24288]

Agencies

• DEPARTMENT OF HOMELAND SECURITY
• U.S. Customs and Border Protection

[Federal Register Volume 80, Number 185 (Thursday, September 24, 2015)]
[Notices]
[Pages 57629-57631]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-24288]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection


Notice of Issuance of Final Determination Concerning Certain 
Analytical-Grade Acetonitrile

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security.

ACTION: Notice of final determination.

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SUMMARY: This document provides notice that U.S. Customs and Border 
Protection (``CBP'') has issued a final determination concerning the 
country of origin of certain analytical-grade acetonitrile. Based upon 
the facts presented, CBP has concluded that the country of origin of 
the analytical-grade acetonitrile is the country of origin of the crude 
acetonitrile for purposes of U.S. Government procurement.

DATES: The final determination was issued on September 18, 2015. A copy 
of the final determination is attached. Any party-at-interest, as 
defined in 19 CFR 177.22(d), may seek judicial review of this final 
determination within October 26, 2015.

FOR FURTHER INFORMATION CONTACT: Ross Cunningham, Valuation and Special 
Programs Branch, Regulations and Rulings, Office of International Trade 
(202) 325-0034.

SUPPLEMENTARY INFORMATION: Notice is hereby given that on September 18, 
2015 pursuant to subpart B of Part 177, U.S. Customs and Border 
Protection Regulations (19 CFR part 177, subpart B), CBP issued a final 
determination concerning the country of origin of certain analytical-
grade acetonitrile, which may be offered to the U.S. Government under 
an undesignated government procurement contract. This final 
determination, HQ H265712, was issued under procedures set forth at 19 
CFR part 177, subpart B, which implements Title III of the Trade 
Agreements Act of 1979, as amended (19 U.S.C. 2511-18). In the final 
determination, CBP concluded that the processing in the United States 
does not result in a substantial transformation. Therefore, the country 
of origin of the analytical-grade acetonitrile is the country of origin 
of the crude acetonitrile for purposes of U.S. Government procurement.
    Section 177.29, CBP Regulations (19 CFR 177.29), provides that a 
notice of final determination shall be published in the Federal 
Register within 60 days of the date the final determination is issued. 
Section 177.30, CBP Regulations (19 CFR 177.30), provides that any 
party-at-interest, as defined in 19 CFR 177.22(d), may seek judicial 
review of a final determination within 30 days of publication of such 
determination in the Federal Register.

    Dated: September 18, 2015.
Harold Singer,
Acting Executive Director, Regulations and Rulings, Office of 
International Trade.
HQ H265712

September 18, 2015

OT:RR:CTF:VS H265712 RMC

CATEGORY: Country of Origin

David R. Stepp

Bryan Cave LLP

120 Broadway, Suite 300, Santa Monica, CA 90401-2386
Re: U.S. Government Procurement; Country of Origin of Acetonitrile; 
Substantial Transformation

    Dear Mr. Stepp: This is in response to your letter dated April 1, 
2015, requesting a country-of-origin determination on behalf of the 
Sigma-Aldrich Corporation (``Sigma-Aldrich''). You state that Sigma-
Aldrich wishes to sell ``analytical-grade acetonitrile'' to the U.S. 
Government and thus seeks a determination that the country of origin of 
its product will be the United States.

[[Page 57630]]

We note that Sigma-Aldrich is a party-at-interest within the meaning of 
19 CFR 177.22(d)(1) and is entitled to request this final 
determination. A meeting was held by teleconference on August 15, 2015.

FACTS:

    Analytical-grade acetonitrile is a purified chemical that Sigma-
Aldrich plans to manufacture in the United States from crude, 
commercial-grade acetonitrile imported from China and other countries. 
You state that commercial-grade acetonitrile is most useful as an 
industrial-grade solvent. Because it is produced as a byproduct of 
other industrial processes, you state that it contains a relatively low 
level of ``pure acetonitrile.'' You state that commercial-grade 
acetonitrile ``can be less than 95%'' and that it contains contaminants 
such as water.
    As its name suggests, purified analytical-grade acetonitrile 
contains fewer contaminants and may be up to 99.5% pure. In its 
purified, analytical grades, acetonitrile is suitable for use in 
chemical testing instruments such as Liquid Chromatography-Mass 
Spectrometry and Ultra-Performance Liquid Chromatography. These 
instruments are used for analyzing chemicals for pharmaceutical drug 
development and production, food safety, medical clinical testing, and 
environmental testing. You state that commercial-grade acetonitrile is 
unsuitable for these applications because its impurities would cause 
false readings and damage the testing equipment.
    Sigma-Aldrich produces several analytical grades of purified 
acetonitrile, including CHROMASOLV[supreg] Plus for HPLC; MC-MS 
CHROMASOLV[supreg]; LC-MS Ultra CHROMASOLV[supreg], tested for UHPLC-
MS; and CHROMASOLV[supreg] Plus, for HPLC. Sigma-Aldrich will purify 
the imported commercial-grade acetonitrile using the following 
processes. The steps are set forth in general terms in accordance with 
your request to exclude confidential information:
    1. Freezing the crude product;
    2. Extracting the pure acetonitrile from the frozen mass;
    3. Analyzing the purified acetonitrile output product and the 
correct purity level for the grade being produced;
    4. Packaging the purified acetonitrile, which requires:
    a. Special glass bottles
    b. Rinsing the bottles
    c. Filling the bottles
    You state that the process is lengthy and requires sophisticated, 
expensive equipment and highly educated personnel. The steps described 
above take about four days for a ``typical batch'' of 20,000 liters. 
Scientists, all of whom possess at least a Bachelor of Science degree, 
perform or oversee the production process which uses a specialized unit 
and precision testing equipment.

ISSUE:

    Whether the purification process described above will 
``substantially transform'' the product such that the country of origin 
of the finished analytical-grade acetonitrile will be the United States 
for U.S. Government procurement purposes.

LAW AND ANALYSIS:

    Pursuant to Subpart B of Part 177, 19 CFR 177.21 et seq., which 
implements Title III of the Trade Agreements Act of 1979, as amended 
(19 U.S.C. 2511 et seq.), CBP issues country-of-origin advisory rulings 
and final determinations as to whether an article is a product of a 
designated country for the purpose of granting waivers of certain ``Buy 
American'' restrictions on U.S. Government procurement.
    In rendering final determinations for purposes of U.S. Government 
procurement, CBP applies the provisions of Subpart B of Part 177 
consistent with the Federal Procurement Regulations. See 19 CFR 177.21. 
In this regard, CBP recognizes that the Federal Acquisition Regulations 
restrict the U.S. Government's purchase of products to U.S.-made or 
designated country end products for acquisitions subject to the Trade 
Agreements Act. See 48 CFR 25.403(c)(1). The Federal Acquisition 
Regulations define ``U.S.-made end product'' as ``an article that is 
mined, produced, or manufactured in the United States or that is 
substantially transformed in the United States into a new and different 
article of commerce with name, character, or use distinct from that of 
the article or articles from which it was transformed.'' See 48 C.F.R 
Sec.  25.003.
    You argue that the imported commercial-grade acetonitrile will be 
substantially transformed when Sigma-Aldrich purifies it into 
analytical-grade acetonitrile. Therefore, in your view, the finished 
product will be eligible for U.S. Government procurement because its 
country of origin will be the United States.
    A substantial transformation occurs when an article is used in a 
manufacturing process that results in a new article that has a new 
name, character or use different from that of the original imported 
article. In previous rulings, ``CBP has consistently held that refining 
or purification of a crude substance does not generally effect a 
substantial transformation that results in a different article of 
commerce with a new name, character, or use''. Headquarters Ruling 
Letter (``HQ'') H113256, dated December 27, 2010. For example, CBP has 
held that refining linseed oil, in H554664, dated October 29, 1987, and 
Octamine (an aviation lubricant), in HQ 556143, dated March 2, 1992, 
did not result in an article with a new name, use, or character.
    You argue that the acetonitrile purification processes will result 
in a substantial transformation because the finished product will have 
a new name, character, and use. Although a change in a product's name 
is the weakest evidence of a substantial transformation, as noted in 
Uniroyal, Inc. v. United States, 3 CIT 220 (1982), aff'd 702 F.2d 1022 
(Fed. Cir. 1983), you point that ``[t]he imported product is referred 
to as `crude' or `commercial grade,' whereas the processed product is 
referred to as `purified' and `analytical grade.''' In both cases, 
however, the name of the product remains acetonitrile. The adjectives 
``crude,'' ``commercial grade,'' ``purified,'' and ``analytical'' 
qualify the noun ``acetonitrile.'' As we have previously noted, the 
addition of an adjective in front of a product name is generally not 
persuasive. See HQ 731731, dated February 23, 1989. We therefore find 
that the purification process does not result in an article with a new 
name.
    You also argue that the processed acetonitrile has a new character 
compared to the crude acetonitrile. You state that the imported crude 
acetonitrile has the character of an industrial manufacturing 
byproduct, whereas the purified product has the character of a 
laboratory reagent. CBP's examination of character, however, focuses on 
the chemical and physical properties of the product itself. See HQ 
571975, dated April 3, 2002. CBP's Laboratories and Scientific Services 
Directorate informed us that no chemical reactions or physical changes 
occur in Sigma-Aldrich's processing. Instead, the processing only 
removes impurities in the acetonitrile. We therefore find that the 
purification process does not result in an article with a different 
character.
    While the finished product will not have a different name or 
character, it will have a different use. The imported crude product can 
be used as a solvent for industrial processes but not in precision 
testing applications because impurities can damage the testing 
equipment or produce measurement errors. Although the finished product 
could also be used as a solvent, you

[[Page 57631]]

state that this is unlikely because it would be ``cost prohibitive.'' 
Therefore, you state that its likely use is confined to analytical 
testing.
    In support of your argument that a substantial transformation will 
take place when the crude acetonitrile is purified into analytical-
grade acetonitrile, you analogize to rulings HQ 563301, dated August 
26, 2005 and HQ 731731, dated February 23, 1989. In HQ 731731, we found 
that a substantial transformation occurred when raw powdered vancomycin 
hydrochloride was processed into a finished antibiotic drug capable of 
intravenous use. As imported, the raw chemical was unfit for medical 
use. Applying the three substantial transformation factors, we found 
that the name changed to ``sterile'' vancomycin hydrochloride, the use 
changed to an injectable antibiotic, and the character changed to a 
purified solution of uniform potency levels. Accordingly, we found that 
the chemical was substantially transformed. Similarly, in HQ 563301 we 
found that a substantial transformation occurred when bulk parathormone 
was processed into finished parathormone cartridges. We held that the 
``extensive processing transforms the raw parathormone from an 
unstable, non-sterile, frozen material unsuitable for human use into a 
pharmaceutical agent ready for human use.''
    A common theme in HQ 563301 and HQ 731731 is the production of a 
medicine from chemicals that were previously unfit for human 
consumption. In both cases, we found that--along with the required 
change in name and character--this conversion from raw chemicals to 
medication represented a significant change in use. Here, aside from 
the fact that no change in name or character will occur, the production 
of analytical-grade acetonitrile results in a less significant change 
in use, namely, from one type of industrial use to another.
    We believe that this case is more analogous to cases involving the 
refining and purification of chemicals than to those involving the 
production of medicine. As noted above, CBP has consistently held that 
refining or purification of a crude substance does not generally effect 
a substantial transformation. You attempt to distinguish one of these 
cases, H566143, dated March 2, 1992, by pointing out that there was no 
substantial transformation because ``both the precursor and purified 
substances had the same essential character as aviation lubricants of 
merely different grades and were therefore not different articles of 
commerce, and both substances had the same chemical structures.'' Yet 
here too the crude and purified acetonitrile will have the same 
essential character as acetonitrile and you have provided no evidence 
that the substances will have a different chemical structure. 
Therefore, we are ``bound to follow the well-settled principle of 
Customs law that the mere refining of a chemical does not result in a 
substantial transformation of the imported chemicals into a new and 
different article of commerce with a new name, character, and use.'' HQ 
556143, dated March 2, 1992.

HOLDING:

    The purification process described above will not substantially 
transform the acetonitrile, and the country of origin of the finished 
analytical-grade acetonitrile will not be the United States for U.S. 
Government procurement purposes.

Sincerely,
Harold Singer,
Acting Executive Director, Regulations & Rulings, Office of 
International Trade.
[FR Doc. 2015-24288 Filed 9-23-15; 8:45 am]
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