CLA-2-87:OT:RR:NC:N2:201
Mr. Scott Cassell
Jas Forwarding USA Inc.
6165 Barfield Road
Atlanta, Georgia 30328
RE: The tariff classification and 301 determination of Bicycle Cranksets assembled in Taiwan from Taiwanese and Chinese components
Dear Mr. Cassell:
This is in response to your letter dated January 29, 2021, on behalf of your client, Gates Corporation of Denver, Colorado.
The items under consideration have been identified as three (3) cranksets assembled in Taiwan, from components sourced from China and Taiwan. The finished goods are identified by their part numbers:
78700063 (S150 crankset with 50T and safety guard)
78700049 (S150 crankset with 50T no guard)
78700145 (S250 crankset with 50T and safety guard)
A Bill of Materials (BOM) for each finished good was included in the attachment documents, along with systematic processes of assembly.
Part #78700063 (S150 crankset with 50T and safety guard) consists of a sprocket, crank, safety guard, and fasteners. In Taiwan, the sprocket is affixed to the crank using the fasteners; the guard is then fastened to this assembly. The completed crankset and an instruction sheet are then packaged in a labeled carton for retail sale.
Part #78700049 (S150 crankset with 50T no guard) consists of a sprocket, crank, and fasteners. In Taiwan, the sprocket is affixed to the crank using the fasteners. The completed crankset and an instruction sheet are then packaged in a labeled carton for retail sale.
Part # 78700145 (S250 crankset with 50T and guard) consists of a sprocket, crank, guard, and fasteners. In Taiwan, the sprocket is affixed to the crank using the fasteners; the guard is then fastened to this assembly. The completed crankset and an instruction sheet are then packaged in a labeled carton for retail sale.
After importation, the cranksets are used to replace standard sprockets on bicycles.
The substantial transformation test will determine the country of origin for purposes of the Section 301 measures. See, e.g., Headquarters Ruling (“HQ”) H301619, dated November 6, 2018. The test for determining whether a substantial transformation will occur is whether an article emerges from a process with a new name, character or use, different from that possessed by the article prior to processing. See Texas Instruments Inc. v. United States, 69 C.C.P.A. 151 (1982). This determination is based on the totality of the evidence. See National Hand Tool Corp. v. United States, 16 C.I.T. 308 (1992), aff’d, 989 F.2d 1201 (Fed. Cir. 1993). You state that for Part #78700063 (S150 crankset with 50T and safety guard), the sprocket, guard, fasteners, instruction sheet, and labels for the carton are made in Taiwan, while the crankset and retail carton are made in China.
For Part #78700049 (S150 crankset with 50T no guard), the sprocket, fasteners, instruction sheet, and labels for the carton are made in Taiwan while the crankset and retail carton are made in China.
For Part # 78700145 (S250 crankset with 50T and guard), in an email dated February 11, 2021, you stated that the crankset, sprocket, guard, fasteners, instructions, and labels for the carton are made in Taiwan, while the carton is made in China.
Based on the information provided, the sprockets, which in all cases are made in Taiwan, provide the essential character of the cranksets. The components made in China are substantially transformed during the assembly process. Accordingly, the Part #78700063 (S150 crankset with 50T and safety guard), Part #78700049 (S150 crankset with 50T no guard), and Part # 78700145 (S250 crankset with 50T and guard), will be a product of Taiwan, and the Section 301 measures will not apply.
The applicable subheading for the Part #78700063 (S150 crankset with 50T and safety guard), Part #78700049 (S150 crankset with 50T no guard), and Part # 78700145 (S250 crankset with 50T and guard), will be 8714.96.5000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Parts and accessories of vehicles of headings 8711 to 8713: Other: Pedals and crank-gear, and parts thereof: Cotterless-type crank sets and parts thereof”. 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 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