OT:RR:CTF:VS H341021 AM
Simon Bergeron
Cycles Panorama, Inc.
213 Rue Saint-Charles S
Granby, J2G9M6
Canada
RE: Country of Origin; Marking; Bicycles
Dear Mr. Bergeron:
This is in response to your request, dated July 17, 2024, filed on behalf of Cycles
Panorama, Inc. (“Cycles Panorama”). In your letter, you request a binding ruling regarding the
country of origin of the Panorama Katahdin model bicycle (“Katahdin bicycle”) for purposes of
marking. Your request, submitted as an electronic ruling request, was forwarded to this office
from the National Commodity Specialist Division (“NCSD”) for response. Our ruling is set
forth below.
FACTS:
The product under consideration is the Katahdin bicycle. You state the Katahdin bicycle
weighs 9.6 kg, and its front and rear wheel size is 62.2 cm. The component materials of the
bicycle are purchased from Taiwan, China, Japan, and Canada including the frame, brakes,
wheels, and saddle, all classified under heading 8714 of the Harmonized Tariff Schedule of the
United States (“HTSUS”).
Once all the components arrive in the warehouse in Canada, they are assembled into the
final product. The bicycles are then imported into the United States 90% assembled, with the
front wheel and the handlebar unattached.
You provided the costed bill of materials (“BOM”) for the Katahdin bicycle.
ISSUE:
What is the country of origin of the Katahdin bicycle for marking purposes.
1
LAW & ANALYSIS:
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 United States shall be marked in
a conspicuous place as legibly, indelibly, and permanently as the nature of the article (or its
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. By enacting 19 U.S.C. § 1304,
Congress intended to ensure that the ultimate purchaser would be able to know by inspecting the
marking on the imported goods the country of which the goods are the product. “The evident
purpose is to mark the goods so that at the time of purchaser 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.” See United States v. Friedlaender & Co., 27 C.C.P.A. 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. Title 19, § 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].”
Pursuant to section 102.0, interim regulations, related to the marking rules, tariff-rate
quotas, and other USMCA provisions, published in the Federal Register on July 6, 2021 (86 FR
35566), the rules set forth in §§ 102.1 through 102.18 and 102.20 determine the country of origin
for marking purposes with respect to goods imported from Canada and Mexico. Section 102.11
provides a hierarchy for determining the country of origin of a good for marking purposes. See
19 C.F.R. § 102.11.
Applied in sequential order, 19 C.F.R. § 102.11(a) provides that the country of origin of a
good is the country in which:
(1) The good is wholly obtained or produced
(2) The good is produced exclusively from domestic materials; or
(3) Each foreign material incorporated in that good undergoes an applicable
change in tariff classification set out in § 102.20 and satisfies any other applicable
requirements of that section, and all other applicable requirements of these rules
are satisfied.
“Material” means a good that is incorporated into another good as a result of production
with respect to that other good, and includes parts, ingredients, subassemblies, and components.”
19 C.F.R. § 102.1(l).
“Foreign material” is defined in Section 102.1(e) as “a material whose country of origin
as determined under these rules is not the same country as the country in which the good is
produced.”
The bicycle is neither “wholly obtained or produced” nor “produced exclusively from
domestic materials.” Therefore, paragraphs (a)(1) and (a)(2) cannot be used to determine the
country of origin, and we need to apply paragraph (a)(3). The Katahdin bicycle will be classified
under subheading 8712.00.15, HTSUS.
The tariff shift requirement in § 102.20 for a good of subheading 8712.00.15, HTSUS,
requires:
A change to heading 8711 through 8713 from any other heading, including
another heading within that group, except from heading 8714 when that change is
pursuant to General Rule of Interpretation 2(a).
Section 102.18(a) provides:
When General Rule of Interpretation (“GRI”) 2(a) is referred to in § 102.20 as an
exception to an allowed change in tariff classification, this means that such
change will not be acceptable for purposes of that section if the change results
from the assembly of parts into an incomplete or unfinished good which is
classifiable in the same manner as a complete or finished good pursuant to GRI
2(a).
As previously noted, and based on the information supplied in your submission, all the
component materials of the Katahdin bicycle are classified under heading 8714. As the change
to the bicycle is as a result of the assembly of these parts, the Katahdin bicycle does not undergo
the requisite tariff shift.
Since an analysis of section 102.11(a) has not produced a country of origin
determination, we proceed under the hierarchical country of origin rules to 19 C.F.R. §
102.11(b), which provides:
Except for a good that is specifically described in the Harmonized System as a
set, or is classified as a set pursuant to General Rule of Interpretation 3, where the
country of origin cannot be determined under paragraph (a) of this section:
(1) The country of origin of the good is the country or countries of origin of the
single material that imparts the essential character to the good…
In determining the "essential character" of the finished good, Section 102.18(b)(1) provides, in
relevant part:
For purposes of identifying the material that imparts the essential character to a
good under §102.11, the only materials that shall be taken into consideration are
those domestic or foreign materials that are classified in a tariff provision from
which a change in tariff classification is not allowed under Part 102.20 specific
rule or other requirements applicable to the good. For purposes of this paragraph
(b)(1):
(i) The materials to be considered must be classified in a tariff provision
from which a change in tariff classification is not allowed under the
specific rule or other requirements applicable to the good under
consideration. For example, in the case of a good classified in HTSUS
subheading 8607.11 (the rule for which specifies a change to subheading
8607.11 from any other subheading, except from subheading 8607.12, and
except from subheading 8607.19 when that change is pursuant to GRI
2(a)), the only materials that may be considered for purposes of
identifying the materials that impart the essential character to the good are
those that are classified in subheadings 8607.11, 8607.12 and, if the tariff
shift is pursuant to GRI 2(a), 8607.19;
Taking into consideration only those domestic and foreign materials that are classified in
a tariff provision from which a change in tariff classification is not allowed in the rule for the
good under section 102.20, we note that all the components classified under heading 8714,
HTSUS, undergo a change in tariff classification as a result of GRI 2(a), and as a result do not
satisfy the rule. Therefore, we must consider whether one of these materials provides the
essential character to the finished good. Section 102.18(b)(2) provides:
For purposes of determining which one of two or more materials described in
paragraph (b)(1) of this section imparts the essential character to a good under
§ 102.11, various factors may be examined depending upon the type of good
involved. These factors include, but are not limited to, the following:
(i) The nature of each material, such as its bulk, quantity, weight or value; and
(ii) The role of each material in relation to the use of the good.
In this instance, we believe the frame imparts the essential character to the Katahdin
bicycle. The frame is the most costly component and imparts to the bicycle its overall shape,
size, and character. Accordingly, because the material that imparts the essential character to the
good, the frame, is of Chinese origin, pursuant to section 102.11(b)(1), the country of origin of
the entire imported good is China for marking purposes and the bicycle needs to be marked as
“Made in China.”
HOLDING:
Pursuant to 19 C.F.R. § 102.11(b), the country of origin of the Katahdin bicycle for
marking purposes is China and must be marked “Made in China” under 19 U.S.C. § 1304.
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 this
merchandise is 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,
Monika R. Brenner, Chief
Valuation and Special Programs Branch