H341021

H341021 November 19, 2024 OT:RR:CTF:VS H341021 AM CATEGORY: Marking 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

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.