CLA-2 OT:RR:CTF:TCM H021296 GC
Lawrence M. Friedman, Esq.
Barnes, Richardson & Colburn
303 East Wacker Drive, Suite 1100
Chicago, Illinois 60601
RE: The tariff classification of a low-speed electric vehicle imported from Korea
Dear Mr. Friedman:
This letter is in response to your correspondence, dated December 20, 2007, in which you requested a binding ruling on behalf of Global Electric Motorcars (GEM), pertaining to the classification under the Harmonized Tariff Schedule of the United States (HTSUS) of a fully assembled low-speed electric vehicle and of a “mini-truck glider” to be assembled in the United States into an electric vehicle. You also requested that we determine the country of origin of these goods for procurement purposes. That aspect of your request was addressed by Customs and Border Protection (CBP) in Headquarters Ruling Letter (HQ) H022169, dated May 2, 2008. This ruling pertains to the tariff classification of the low-speed electric vehicle only.
FACTS:
According to the submitted information, the low-speed, four-wheel electric vehicle may accommodate two to five passengers. The vehicle is battery-powered, with a top speed of 25 miles per hour, and a range of 39 miles. The vehicle has four-wheel independent suspension and hydraulic brakes. The dimensions are as follows: length 3,300 mm (10.8 feet) x width 1,425 mm (4.7 feet) x height 1, 930 mm (6.3 feet). The curb weight is approximately 736 kg (1619 lbs), and the weight of load is 600 kg (1320 lbs). It does not have a closed driving cab, but it is equipped with a protective frame, roof, and windshield. It also includes other standard features identified in your submission as seats with integrated heating and cooling elements, safety restraints, rearview mirrors, headlights, and a speedometer. The vehicle may also be equipped with an optional aluminum cargo deck, a small plastic trunk for transporting goods, or a kit for carrying golf clubs and equipment. The volume of the cargo deck is 3.1 cubic feet and the volume of the plastic trunk is 4 cubic feet.
The marketing materials support your description of the vehicle as “a low-speed vehicle alternative to traditional automobiles.” According to your submission, the vehicle is intended to be used to transport people and small loads for short distances on roadways found on farms, large business sites and parks, resorts, universities, gated communities, factories, neighborhoods, and low-speed public roads (with speed limits posted at 35 miles per hour or less). You describe the vehicle as “similar to a [g]olf car,” but claim that the vehicle is much more versatile because it transports people in many more environments than just on a golf course or country club. You state that the vehicle is categorized as a “Neighborhood Electric Vehicle” under the Federal Motor Vehicle Safety Standards, promulgated by the National Highway Traffic Safety Administration (NHTSA), 63 Fed. Reg. 33194 (June 17, 1998). See also 49 C.F.R. §571. This federal standard requires that small passenger vehicles with a top speed of 20-25 miles per hour must be equipped with the following features to ensure the safety of passengers when traveling on low-speed roads: headlamps, stop lamps, turn signal lamps, tail lamps, reflex reflectors, parking brakes, rearview mirrors, windshields, and seat belts.
ISSUE:
Whether the vehicles are classifiable in subheading 8703.10, HTSUS, as “golf carts and similar vehicles,” or subheading 8703.90, HTSUS, as other vehicles not elsewhere specified in heading 8703, HTSUS.
LAW AND ANALYSIS:
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that most goods are classified by application of GRI 1, that is, 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 headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
In understanding the language of the HTSUS, the Harmonized Commodity Description and Coding System Explanatory Notes (ENs) may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading of the HTSUS, and are the official interpretation of the Harmonized System at the international level. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The HTSUS provisions under consideration for the classification of the four-wheel electric vehicle are as follows:
8703 Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars:
8703.10 Vehicles specifically designed for traveling on snow; golf carts and similar vehicles:
* * *
8703.90 Other:
The vehicle is classifiable in heading 8703, HTSUS, which provides for, in relevant part, “[m]otor cars…principally designed for the transport of persons.” The vehicle is for the transport of persons, as the capacity of the optional cargo deck and plastic trunk is too minimal to suggest that it might otherwise be intended for the transport of goods (heading 8704, HTSUS). The issue is whether the vehicles are classifiable in subheading 8703.10., HTSUS, which provides in relevant part for “golf carts and similar vehicles,” or subheading 8703.90, HTSUS, a basket provision for other vehicles not elsewhere classifiable in heading 8703, HTSUS. The vehicle is not classifiable in any other subheadings of heading 8703, HTSUS, because it does not have an internal combustion piston engine. Neither the notes to the HTSUS nor the ENs provide any guidance on the scope of the relevant subheadings.
Classification at the six-digit subheading level implicates GRI 6, which states:
For legal purposes, the classification of goods in the subheading of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless the context otherwise requires.
In HQ 961512, dated April 24, 1998, CBP distinguished between electric vehicles classifiable in subheadings 8703.10 and 8703.90, HTSUS, based on whether the primary purpose and function for which the vehicle is designed is to traverse roadways. Subheading 8703.10, HTSUS, provides for “golf carts and similar vehicles”. Golf carts are not intended primarily for use on public roads, streets, and private roadways. In HQ 916512, CBP considered the significance of the versatility of the vehicle at issue, which was advertised as the “perfect vehicle for the neighborhood, the golf course, country club, [and] anywhere in a planned/suburban community with low density traffic and low speed zones.” CBP classified the vehicle in heading 8703.90, HTSUS, because, similar to traditional motor vehicles for the transport of persons, it was designed and intended for use on public roads, streets, and private roadways. The vehicle was not primarily for usage on golf courses or other off-road terrains. Consequently, classification in subheading 8703.10, HTSUS, was precluded.
Based on the fact that the subject vehicle meets the description of a “Neighborhood Electric Vehicle” as determined by the NHTSA, and on its intended uses, you argue that the vehicle is properly classified in subheading 8703.90, HTSUS. The characterization of the subject low-speed electric vehicle as a “Neighborhood Electric Vehicle” by the NHTSA is not dispositive for purposes of tariff classification. See Marubeni Am. Corp. v. United States, 17 Ct. Int’l Trade 360, 369 (1993). However, we find that although the subject vehicle does not feature a completely enclosed cab, its design as a whole indicates that it is capable of functioning in a variety of different settings. For instance, an electric engine capable of generating a top speed of 25 miles per hour combined with a battery capable of covering a 30 mile range indicates a more expansive use than that of a golf cart. In addition, you identified several features that are typical of traditional automotive vehicles intended to operate in public thoroughfares, such as seats with integrated heating and cooling elements and a speedometer, along with safety restraints, rearview mirrors, and headlights. Furthermore, the attachment allowing the subject vehicle to carry golf clubs is only one of three optional features of the vehicle, which illustrates that its intended use is significantly broader than that of a golf cart. The marketing material that you submitted supports this conclusion, as the subject vehicle is marketed as an alternative to typical automotive vehicles for transporting persons on low-speed public roads, streets, and private roadways.
Accordingly, the subject low-speed electric vehicle does not meet the terms of subheading 8703.10, HTSUS, which provides for, in pertinent part, “golf carts and similar vehicles”. It is classified under subheading 8703.90, HTSUS, as a vehicle “[o]ther” than a golf cart or similar vehicle or a vehicle with an internal combustion piston engine. This is consistent with our classification decision in HQ 966512, dated April 24, 1998, concerning a similar vehicle.
HOLDING:
By application of GRI 1 and GRI 6, the low-speed electric vehicle is provided for in heading 8703, HTSUS. It is classifiable in subheading 8703.90.00, HTSUS, as “[m]otor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars: Other.” The column one, general rate of duty is 2.5 percent ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the Internet at www.usitc.gov/tata.hts/.
A copy of this ruling letter should be attached to entry documents failed 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,
Gail A. Hamill, Chief
Tariff Classification and Marking Branch