CLA-2-87:OT:RR:NC:N2:201
Mr. Daniel J Meylor Carmichael International Service 1200 Corporate Center Dr. Suite 200 Monterey Park, California 91754 RE: The tariff classification and country of origin of an electric scooter Dear Mr. Meylor: This is in response to your letter dated May 7, 2021, you requested a country of origin ruling determination on electric scooters behalf of your client, Unagi Scooters, located in Oakland, California. The merchandise under consideration has been identified as two (2) models of the Unagi Electric Scooter. The first, model E500, is equipped with two (2) x 250W motors, for a total wattage of 500W. The second model, E250, is equipped with a single 250W motor.
You state that the two-wheel scooter with dual motor series weighs 26.5 pounds and folds with a one-click mechanism.
Both E500 and E250 come with a 24-cell rechargeable lithium-ion battery pack and a 250W nominally rated DC brushless direct drive motors. Both Unagi scooters use an electric drive system. To operate, the rider manually depresses the “gas” and brake paddles which send signals to the motor controller that instructs the electric motors to accelerate or decelerate. The rated capacity of the battery pack is 9.0 Amp Hours - which is equivalent to 259.2 - Watt Hours. Full discharge time depends on selected assist mode, rider weight, frequency of starts/stops, and elevation changes, but generally translate from anywhere between 30-120 minutes.
You state that while the scooters will be ultimately assembled in China, the scooter frame will be made in Vietnam. You state that these electric scooters contain nearly identical type components to ones found in electric bicycles, and therefore should be classified under the same HTS classification, 8711.60.0090. We agree in part.
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 Unagi Electric Scooter E500 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.
The applicable subheading for the Unagi Electric Scooter E250 will be 8711.60.0050, 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: Of an output not exceeding 250 W”. 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