Mike K. Choi, President
MKC Customs Brokers International Inc.
930 W Hyde Park Blvd.
Inglewood, CA 90302

RE: The tariff classification, Country of Origin and GSP eligibility of bicycles from Cambodia

Dear Mr. Choi:

In your letter dated December 8, 2017 you requested a tariff classification ruling on behalf of your client, Ballard Pacific Resources Inc., located in City of Industry, California.

The merchandise under consideration has been identified as a Boys bicycle with a 16 inch diameter wheel, Style no. WMA51610-01.

In your request you state that the bicycles are assembled in Cambodia. The bicycles are constructed from a majority of Cambodian-produced components with some Chinese-made parts. The entirety of the assembly and labor costs are incurred in Cambodia.

The applicable subheading for the Boys Bicycle, Style no. WMA51610-01, will be 8712.00.1510, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Bicycles and other cycles (including delivery tricycles), not motorized: Bicycles having both wheels not exceeding 63.5 cm in diameter: Having both wheels not exceeding 50 cm in diameter”. The rate of duty will be 11%.

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 World Wide Web at

In HQ 735368, CBP noted that bicycle frames are considered the essential component of a finished bicycle. They determined that the imported components each lost their separate identity when they were attached to the bicycle frame to create a finished bicycle, which is a new article of commerce. As a result, they found that the imported components were substantially transformed.

Based on the information submitted which describes the assembly and manufacture of the bicycles produced both from Cambodian and Chinese components, this office find that the Chinese bicycle components are substantially transformed into articles with a new name, character, or use, when incorporated with the Cambodian components, which includes the frame.

In accordance with 19 C.F.R. § 134.35, since the subject components are used by Ballard Pacific Resources Inc. in the assembly and manufacture of finished bicycles and are not sold separately in their condition as imported, they are excepted from individual marking. Only the outermost containers of the imported articles must be marked with the country of origin. The marking of the outermost containers must comply with the marking requirements set forth in 19 C.F.R. Part 134.

In HQ 735368, CBP stated that “because the bicycle is assembled in Taiwan and one of the bicycle’s most significant components, the frame, is made in Taiwan, we find that the country of origin of the bicycle is Taiwan.” Similarly, when Ballard Pacific Resources Inc.’s bicycle frame is made in Cambodia and the bicycle is assembled in Cambodia, then Cambodia will be the bicycle’s country of origin.

As such, the finished bicycle originating in Cambodia, and subsequently imported directly into the United States would be eligible for duty-free treatment under GSP.

You have also inquired as to whether these bicycles, manufactured in Cambodia from Cambodian and Chinese components, qualify for preferential duty treatment under the GSP. Under the GSP, eligible articles wholly grown, produced, or manufactured in a designated beneficiary developing country (BDC) which are imported directly into the customs territory of the U.S. from a BDC may receive duty-free treatment if the sum of (1) the cost or value of materials produced in the BDC, plus (2) the direct costs of the processing operations performed in the BDC, is equivalent to at least 35% of the appraised value of the article at the time of entry. See 19 U.S.C. 2463(b). 19 CFR 10.176, country of origin criteria, provides merchandise produced in a beneficiary developing country or any two or more countries which are members of the same association of countries, generally, may qualify for duty-free entry under GSP upon the article being either wholly the growth, product, or manufacture of, or is a new or different article of commerce that has been grown, produced, or manufactured in the BDC. Under 19 CFR 10.175, eligible articles shall be imported directly from a BDC to qualify for treatment under the GSP. For purposes of 19 CFR 10.175, the words “imported directly” in pertinent part means: at (a) direct shipment from the beneficiary country to the United States without passing through the territory of any other country; at (b) if the shipment is from a BDC to the U.S. through the territory of any other country, the merchandise in the shipment does not enter into the commerce of any other country while en route to the U.S., and the invoice, bills of lading, and other shipping documents show the U.S. as the final destination; and at (d) if the shipment is from any BDC to the U.S. through the territory of any other country and the invoices and other documents do not show the U.S. as the final destination, the articles in the shipment upon arrival in the U.S. are imported directly only if they: (1) remained under the control of the customs authority of the intermediate country; (2) did not enter into the commerce of the intermediate country, except for the purpose of sale other than at retail, and the port director is satisfied that the importation results from the original commercial transaction between the importer and the producer or the latter’s sales agent; and (3) were not subject to operations other than loading and unloading, and other activities necessary to preserve the articles in good condition. See 19 CFR 10.175, a through e, for a complete understanding of the term – imported directly. For purposes of the GSP, Cambodia is designated as a BDC. The assembling of the various individually classifiable parts does result in a new or different article of commerce where the sum cost of the materials plus the direct costs of the processing operations performed in the BDC, is equivalent to at least 35% value content requirement. You provided a cost analysis showing that the component parts from China represent approximately 30% of the unit price, while the Cambodian parts represent approximately 50% with an additional 16% for labor and overhead. Articles classifiable under subheading 8512.00.1510, HTSUS, which are products of Cambodia may be entitled to duty free treatment under the Generalized System of Preferences (GSP) upon compliance with all applicable regulations. The GSP is subject to modification and periodic suspension, which may affect the status of your transaction at the time of entry for consumption or withdrawal from warehouse. To obtain current information on GSP, check our Web site at and search for the term “GSP”.

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].


Steven A. Mack
National Commodity Specialist Division