CLA-2-87:OT:RR:NC:N2:201
Michael A. Packard
Compliance Specialist
Green Worldwide Shipping LLC
3131 S. Vaughn Way, Suite 134
Aurora, CO 80014
RE: The tariff classification and country of origin of an electric scooter Dear Mr. Packard: This is in response to your letter dated January 11, 2022, you requested a country of origin ruling determination on an electric scooter, on behalf of your client, Superpedestrian, Inc. located in Cambridge, Massachusetts. The merchandise under consideration has been identified as the Link Electric Scooter S2.1.
You state in your request, that the scooter has an electric motor, with an adjustable peak electrical power rating of 750 Watts (W) and is designed to be able to limit current from the battery based on the local regulations in some markets. The frame is constructed of aluminum with a chromoly steel reinforced column. The scooter is shipped with a default 250W power rating that can be adjusted up to 750W once it arrives in a local market. In addition to the motor, the scooter uses a 52V, 84 cell rechargeable lithium-ion battery pack that is rated at 18Ah and 907W hours. The scooter uses an electric drive chain. The scooter weighs 59.5 pounds and is not foldable. It measures 50 inches in length, 47 inches in height, has a width of 7 inches for the deck, and 23 inches when including the handlebars, with three (3) independent brakes on the unit and a range of up to 60 miles. There are various communications used including a 4G cellular modem with 2G fallback, Wi-Fi and Bluetooth Low Energy, an active assisted GPS receiver and a 6-axis integrated IMU accelerator/gyroscope. In addition, there are five (5) CPUs on board in three (3) custom microcomputers, and a comprehensive vehicle operating system.
As you have stated, once the frame is built in Vietnam, it will be shipped to the factory in China for final assembly with the rest of the parts into a complete scooter.
The "country of origin" is defined in 19 CFR 134.1(b) 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 this part…”.
The courts have held that a substantial transformation occurs when an article emerges from a process with a new name, character or use different from that possessed by the article prior to processing. United States v. Gibson-Thomsen Co., Inc., 27 CCPA 267, C.A.D. 98 (1940); National Hand Tool Corp. v. United States, 16 CIT 308 (1992), aff’d, 989 F. 2d 1201 (Fed. Cir. 1993); Anheuser Busch Brewing Association v. The United States, 207 U.S. 556 (1908) and Uniroyal Inc. v. United States, 542 F. Supp. 1026 (1982). However, if the manufacturing or combining process is merely a minor one that leaves the identity of the article intact, a substantial transformation has not occurred. Uniroyal, Inc. v. United States, 3 CIT 220, 542 F. Supp. 1026, 1029 (1982), aff’d, 702 F.2d 1022 (Fed. Cir. 1983) (Uniroyal). Substantial transformation determinations are based on the totality of the evidence. See Headquarters Ruling (HQ) W968434, date January 17, 2007, citing Ferrostaal Metals Corp. v. United States, 11 CIT 470, 478, 664 F. Supp. 535, 541 (1987). In Uniroyal case, the court held that an upper was not substantially transformed when attached to an outsole to form a shoe and that the upper was "the very essence of the completed shoe".
It has continually been the opinion of CBP that the frame, which in this case is a product of Vietnam, is the part of the scooter that imparts its “essence”. Based on the information provided, the culmination of production processes performed in China to the Vietnamese frame does not substantially transform the frame. Accordingly, the merchandise will remain a product of Vietnam, and the Section 301 measures will not apply.
The applicable subheading for the Link Scooter S2.1 will be 8711.60.0090, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Motorcycles (including mopeds) and cycles fitted with an auxiliary motor, with or without side-cars; side-cars: With electric motor for propulsion: Other”. The rate of duty will be Free.
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 CFR Part 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