CLA-2 CO:R:C:M 955806 LTO
Mr. Bruce Drew
Total Logistics Resources, Inc.
P.O. Box 30419
Portland, Oregon 97220
RE: Bicycle frames with various bicycle parts; GRI 2(a); HQ
084845; HQ 086555; HQ 089872; HQ 950118; EN to GRI 3(b);
subheading 8712.00.15, 8712.00.25, 8712.00.35, HTSUS
Dear Mr. Drew:
This is in response to your letter of December 16, 1993, to
Customs in New York, requesting, on behalf of Motiv Sports, Inc.,
the classification of bicycle frame assemblies under the
Harmonized Tariff Schedule of the United States (HTSUS). Your
letter, together with the samples submitted, was referred to this
office for a response.
FACTS:
The articles in question are four versions of bicycle frame
assemblies. Upon importation, additional parts will be added to
the amalgamated frame assemblies to produce complete bicycles.
Version one includes the frame, fork, crank set, kick stand,
brakes, levers (brake/shifter), reflector, derailleur, handlebar,
grips and stem. The total value upon importation is $86.27.
Parts to be added to produce a complete bicycle are the front and
rear wheels, seat and seat post, seat pin, pedals and chain. The
value of these items is $47.17.
Version two is the same as version one, except that the
imported frame does not include a crank set. The value of the
imported components is $76.97, while the value of the components
added in the U.S. is $56.47.
Version three includes the frame, fork, crank set, kick - 2 -
stand, brakes, reflector and derailleur. The total value upon
importation is $55.87. Parts to be added to produce a complete
bicycle are the front and rear wheels, seat and seat post, seat
pin, pedals, chain, handlebar, stem, grips and levers
(brake/shifter). The value of these items is $77.57.
Version four is the same as version three, except that the
imported frame does not include a crank set. The value of the
imported components is $46.57, while the value of the components
added in the U.S. is $86.87.
ISSUE:
Whether the bicycle frame assemblies have the essential
character of complete bicycles, so that they are, according to
GRI 2(a), classifiable as bicycles under heading 8712, HTSUS.
LAW AND ANALYSIS:
The General Rules of Interpretation (GRI's) to the HTSUS
govern the classification of goods in the tariff schedule. GRI 1
states in pertinent part that "for legal purposes, classification
shall be determined according to the terms of the headings and
any relative section or chapter notes . . . ."
The headings at issue are as follows:
8712 Bicycles and other cycles, not motorized
* * * * * * * * * * * * *
8714 Parts and accessories of vehicles of heading
8711 to 8713
With regard to the classification of unfinished articles,
GRI 2(a) states that "[a]ny reference in a heading to an article
shall be taken to include a reference to that article incomplete
or unfinished, provided that, as entered, the incomplete or
unfinished article has the essential character of the complete or
finished article." Therefore, heading 8712, HTSUS, covers
incomplete, non-motorized bicycles having the essential character
of complete, non-motorized bicycles.
In determining an article's essential character, factors
found to be relevant in other contexts include the significance
of the imported components or their role in relation to the use
or overall functioning of the complete article and, to the extent
that it validates the comparison, the cost or value of the
complete article versus the cost or value of the imported
components. See HQ 084845, dated November 24, 1989; HQ 086555,
dated April 16, 1990; HQ 950118, dated December 10, 1991;
Harmonized Commodity Description and Coding System Explanatory - 3 -
Notes to GRI 3(b), pg. 4.
Although versions one and two are missing, among other
parts, the front and rear wheels, it is our opinion that these
assemblies have the form, shape and overall visual appearance of
a complete bicycle. Further, the imported components of version
one represent approximately 62% of the total value of the
complete bicycle, and 59% of version two. Accordingly, the
assemblies are classifiable under heading 8712, HTSUS.
Classification of these assemblies at the subheading level
is dependent upon the diameter of both wheels. If both wheels
do not exceed 63.5 cm in diameter, the assemblies are
classifiable under subheading 8712.00.15, HTSUS. If both wheels
exceed 63.5 cm in diameter, then the weight of the bicycle
(complete without accessories) and the cross-sectional diameter
of the tires is necessary to determine the proper subheading
classification. If the bicycle weighs less than 16.3 kg complete
without accessories and is not designed for use with tires having
a cross-sectional diameter exceeding 4.13 cm, the assemblies are
classifiable under subheading 8712.00.25, HTSUS. Otherwise, the
assemblies are classifiable under subheading 8712.00.35, HTSUS.
In HQ 089872, dated January 27, 1992, a frame assembly
consisting of a frame, fork, crank bearing and axle set, and
quick release bolt, was classified under subheading 8714.99.90,
HTSUS, rather than under heading 8712, HTSUS. While the frame
assemblies in question (versions three and four) consist of more
parts than the assembly of HQ 089872, it is our opinion that
these assemblies do not have the essential character of complete
bicycles.
Unlike version one, versions three and four do not include
levers (brake/shifter), handlebar, grips and stem. While the
addition of any one of these parts to versions three and four
would not necessarily be determinative with regard to essential
character, it is our opinion that the assemblies now under
consideration do not have the essential character of a complete
bicycle, and cannot be classified under heading 8712, HTSUS.
This determination is supported by the cost breakdown of the
complete article versus the cost or value of the imported
components, where the imported components of version three
represent approximately 42% of the total value of the complete
bicycle, and 35% of version four.
Heading 8714, HTSUS, provides for parts and accessories of
the vehicles of heading 8712, HTSUS. The assemblies in question
(versions three and four) satisfy the terms of this heading, as
they are components used solely or principally within heading
8714, HTSUS.
- 4 -
Subheading 8714.99, HTSUS, provides for "other" parts and
accessories of bicycles. Versions three and four satisfy this
description. They are assemblies of bicycle parts which, as a
whole, are not specifically provided for within any other
subheading of heading 8714, HTSUS. Therefore, these assemblies
are classifiable within subheading 8714.99, HTSUS, specifically
under subheading 8714.99.90, HTSUS.
HOLDING:
The bicycle frames assembled with various bicycle parts
(versions one and two) are classifiable according to GRI 2(a)
under heading 8712, HTSUS, which provides for bicycles, not
motorized.
The bicycle frames assembled with various bicycle parts
(versions three and four) are classifiable under subheading
8714.99.90, HTSUS, which provides for other parts and accessories
of vehicles of headings 8711 to 8713, HTSUS. The corresponding
rate of duty for articles of this subheading is 10% ad valorem.
Sincerely,
John Durant, Director
Commercial Rulings Division