In ruling N326004 (June 3, 2022), Customs and Border Protection (CBP) discussed the country of origin and tariff classification of a motorcycle. The merchandise was identified as the XR-150L Series Motorcycle, which has a gas-powered engine with a displacement of 149.16 cubic capacity (cc). The motorcycle’s manufacturing and processing operations take place in Mexico, which include direct manufacturing, complex assembly operations, and the substantial transformation of individual components that are sourced in China, Japan, Thailand, and the U.S. into the finished motorcycle. Per CBP’s ruling, the Mexican origin framing components of the motorcycle are what represent the essential character of the motorcycle.
CBP noted that, as defined under 19 CFR 134.1(b), the country of origin is 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.’ ” CBP also established that 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.”
For its determination, CBP noted that it has continually been its opinion that the frame, which is a product of Mexico in this case, is the part that provides the motorcycle its “essence.” Customs ruled that the culmination of the production processes performed in Mexico on the imported parts of the frame did substantially transform the frame, and, as such, the country of origin would be Mexico.
In addition, CBP also ruled that the tariff classification of the motorcycle from Mexico would be 8711.20.0060, 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 internal combustion piston engine of a cylinder capacity exceeding 50 cc but not exceeding 250 cc: Exceeding 90 cc but not exceeding 190 cc”. The general rate of duty is free.
For further information, please contact:
Frances P. Hadfield, Crowell & Moring
fhadfield@crowell.com
