CLA-2-87:OT:RR:NC:N2:201
Kory Moore
DT Swiss, Inc.
2493 Industrial Blvd.
Grand Junction, CO 81505
RE: The tariff classification and country of origin of bicycle wheel rims
Dear Mr. Moore:
In your letter dated July 12, 2019, you requested a tariff classification ruling.
The items under consideration have been identified as five (5) styles of bicycle wheel rims (models WXRC120BFIXCO05023, WXRC120TFDRCO05027, W0E1900TFDQSO07069, W0M1700BFIXSO05147, and WEX1700TFDRSO11455) that are assembled in Taiwan from parts manufactured in both China and Taiwan. You state that these wheel rims may potentially be sold under the “DT Swiss” name. You are requesting a ruling on the completed wheel rim when imported into the United States.
The bicycle wheel rim consists of several components. The rims, spokes, and nipples are manufactured in China, while the wheel hubs, rim tape, valves, decals, and manuals are manufactured in Taiwan. In your request you ask:
What is the country of origin of the finished bicycle wheel rims which are assembled in Taiwan and contains components from Taiwan and China, and
Whether the processes performed in Taiwan rises to the level of a substantial transformation for the purposes of Country of Origin.
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. 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 marking should influence his will." United States v. Friedlaender & Co., 27 C.C.P.A. 297 at 302 (1940). 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 the marking laws and regulations. The case of U.S. v. Gibson-Thomsen Co., Inc., 27 C.C.P.A. 267 (C.A.D. 98) (1940), provides that an article used in manufacture which results in an article having a name, character, or use differing from that of the constituent article will be considered substantially transformed.
In such circumstances, the imported article is exempted from marking. The outermost containers of the imported article shall be marked. (See 19 CFR 134.35).
In determining whether the combining of parts or materials constitutes a substantial transformation, the issue is the extent of operations performed and whether the parts lose their identity and become an integral part of a new article. Belcrest Linens v. United States, 6 CIT 204, 573 F.Supp. 1149 (1983), aff'd, 2 Fed.Cir. 105, 741 F.2d 1369 (1984). Assembly operation which are minimal or simple, as opposed to complex or meaningful, will generally not result in a substantial transformation. See, C.S.D. 80-111, 85-25, 89-118, 90-51 and 90-57.
In HQ 734478 (June 14, 1993), CBP ruled that bicycle frames imported from Taiwan, which were subsequently acid washed, painted and assembled with other components to make bicycles were not substantially transformed. In that ruling, it was noted that the bicycle frame is the most costly component and is one of the essential components of the bicycle (if not the most essential component) imparting to the bicycle its overall shape, size and character.
Similar to the example above, the unfinished rim is the most significant of all of the other components of the completed article. Although there is some assembly work performed in Taiwan, we find that it is minimal, and does not cause the rim to lose its identity and become an integral part of a new commercial article. The product is not substantially trasnformed in Taiwan. We find that the country of origin of the completed bicycle wheel rim is China.
The applicable subheading for the bicycle wheel rims will be 8714.92.1000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Parts and accessories of vehicles of headings 8711 to 8713: Wheel rims and spokes: Wheel rims”. The rate of duty will be 5 percent ad valorem.
Effective July 6, 2018, the Office of the United States Trade Representative (USTR) imposed an additional tariff on certain products of China classified in the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(b), HTSUS. The USTR imposed additional tariffs, effective August 23, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(d), HTSUS. Subsequently, the USTR imposed further tariffs, effective September 24, 2018, on products classified under the subheadings enumerated in Section XXII, Chapter 99, Subchapter III U.S. Note 20(f) and U.S. Note 20(g), HTSUS. For additional information, please see the relevant Federal Register notices dated June 20, 2018 (83 F.R. 28710), August 16, 2018 (83 F.R. 40823), and September 21, 2018 (83 F.R. 47974). Products of China that are provided for in subheading 9903.88.01, 9903.88.02, 9903.88.03, or 9903.88.04 and classified in one of the subheadings enumerated in U.S. Note 20(b), U.S. Note 20(d), U.S. Note 20(f) or U.S. Note 20(g) to subchapter III shall continue to be subject to antidumping, countervailing, or other duties, fees and charges that apply to such products, as well as to those imposed by the aforementioned Chapter 99 subheadings.
Products of China classified under subheading 8714.92.1000, HTSUS, unless specifically excluded, are subject to the additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 8714.92.1000, HTSUS, listed above.
The tariff is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Notice cited above and the applicable Chapter 99 subheading.
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 World Wide Web at https://hts.usitc.gov/current.
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. If you have any questions regarding the ruling, contact National Import Specialist Matthew Sullivan at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division