The country of origin of a Segway off-road vehicle

N348937 June 2, 2025 OT:RR:NC:N2:201 CATEGORY: Origin Lisa Murrin Expeditors Tradewin LLC 795 Jubilee Drive Peabody, MA 01960 RE: The country of origin of a Segway off-road vehicle Dear Ms. Murrin: In your letter dated May 13, 2025, you requested, on behalf of your client, Segway Powersports, Inc., located in McKinney, TX, a country of origin ruling on an off-road vehicle assembled in Thailand. The item under consideration has been identified as the Segway off-road vehicle (Segway), model # SGW1000F-U4. You identified over 600 parts that are shipped from China to Thailand and assembled into the finished vehicle. The main assembly line processes are highlighted below. Install the Front Axle, rear stabilizer bar, panel, and heat shield Pre-assemble the steering gear (subassembly) ECU (engine control unit)/T-Box programming Install the floor panel and pre-install water pipes Pre-install the engine mounting brackets, and install the engine Pre-assemble exhaust elbow (subassembly) and install Install the drive shaft, air filter, throttle body, air ducts and engine exhaust pipe Install the velocity drive shaft, control arms, stabilizer bar ball joint, wheels and hub bearing housing Install the calipers, brake pipeline, shock absorbers, and steering tie-rods Pre-assemble the fuel tank (subassembly); pre-assemble front and rear seat brackets; pre-assemble the radiator (subassemblies); and then assemble to the vehicle Pre-assemble the front bumper (subassembly); install the parking brake lock and seat belt; install the seats and foot pedals Pre-assemble brake pedals (subassembly); fix wiring harness; assemble backrest support Install the muffler cylinder, reinforcement brace, crossbeam, shift lever, and relay Install the rectifier, winch relay, T-Box, steering column, connect pull lock and brake pipeline, and connect brake pedal and throttle Install the headlight covers, foot pedals, fuel filler, baffles, and tire covers Install the steering wheel Performance Test Pre-assemble the cargo box (subassembly) Install the vehicle exterior parts/accessories, including doors, storage box, armrest, floor panels, and headrests You provided documents that show that the Segway will go through thirty-three (33) workstations. The entire assembly process takes thirty-four (34) workers approximately 15.55 hours per vehicle. When determining the country of origin for purposes of applying current trade remedies under Section 301 and additional duties, the substantial transformation analysis is applicable. See, e.g., Headquarters Ruling Letter 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, 681 F.2d 778 (C.C.P.A. 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). The substantial transformation test is fact-specific and applied on a case-by-case basis depending on the totality of factors. The primary focus of the substantial transformation test is whether the work or material added to an article in another country changed the character or use of the article. A change in the name of materials added to an article, without more, will rarely support the interpretation that the processing in question substantially transformed those materials. In determining whether the combining of parts or materials constitutes a substantial transformation, the determinative issue is the extent of operations performed and whether the parts lose their identity and become an integral part of the new article. Belcrest Linens v. United States, 573 F. Supp. 1149 (Ct. Int’l Trade 1983), aff’d, 741 F.2d 1368 (Fed. Cir. 1984). The country of origin of the item’s components, extent of the processing that occurs within a country, and whether such processing renders a product with a new name, character, and use are primary considerations in such cases. In binding ruling N320280 (July 22, 2021), CBP determined the country of origin of a similar all-terrain vehicle (ATV) assembled in Thailand from Chinese components. As described in this ruling, the ATV is comprised of 1,375 component parts, and went through 22 “main”, 14 “sub”, and 3 “inspection” stations during the assembly processes. Some of the assembly processes include: Engine and Front and Rear Axle Assembly Rear Suspension Assembly, which includes installation of left and right rocker arm subassemblies, the rear sway bar, and mounting brackets for shock absorbers and brake calipers Assembly of Main Cable and Middle functional parts of vehicle body, which includes the radiator and cooling system, fuel tank, voltage regulator, steering wheel and system related components, Continuous Variable Transmission (CVT), and air filters Installation of Dashboard, Upper Panel, and Headlight Sub-Assembly The fabrication of the vehicle frame, which included welding and electrophoretic painting, and was considered its own subassembly, was performed in China and shipped in bulk to Thailand. CBP held that the country of origin of the ATV was Thailand because the assembly process is sufficiently complex enough to constitute a substantial transformation and results in an article with a new name, character, and use such that the country of origin is Thailand. In many cited rulings CBP did note that the “ assembly of components is necessary for the ATV to function, and that the assembly results in a substantial transformation”. The assembly process of the Segway is similar as described above. You state that the following key assembly steps take place in Thailand: Engine, axle, and rear stabilizer bar assembly Installation of the rocker arm subassemblies, the brake calipers and shock absorbers Assembly the radiator, fuel tank, steering wheel, air filter, drive shaft, and exhaust Installation of the instrument panel and headlights Numerous subassemblies are assembled in Thailand, along with the assembly of hundreds of parts. Some of these subassemblies include the exhaust pipe, steering knuckle, wheel support, muffler subassembly, fuel tank, seat brackets, radiator, bumpers, brake pedal, and the vehicle frame bottom plate assembly. This office sees no reason to not apply the same rationale from ruling N320280, the assembly process resulted in an article with a new name, character, and use. The assembly of the components is necessary for the off-road vehicle to function, and the assembly process is sufficiently complex to result in a substantial transformation of the components. Similarly, in Headquarters ruling H330647 (October 5, 2023) CBP determined the country of origin of electric passenger vehicles assembled in Country A from globally sourced components, 75% of which were from China. The full vehicle assembly, including the power train, will be completed in Country A. The assembly includes, but is not limited to: Removal of doors from painted body and glazing; primary seal to doors and assembly of external doors finisher; latches and mirrors assembly; door glasses fitting; doors harness routing and modules fitting; speakers and door closing finisher assembly; Retractor and tailgate weatherstrip assembly; tailgate harness connection to the main harness; instrument panel fitting; anti-lock brake system subassembly and assembly. Center console subassembly; underbody assemblies (e.g., braking systems). Headlamp fitting; fluid fill; seats row fitting; steering wheels; 12v battery fit; door fitting; windshield washer reservoir filling. Rear knuckle subassembly; damper assembly, assembly of rear electric drive unit; rear suspension assembly; main harness and coupling. Motor dropped onto the front subframe, mounting of front comer assembly and suspension system parts fixing. Connection of upper and lower body; rear axle and coupling; vehicle configuration; calibration and testing. CBP noted that the China components, including the body shell, battery pack, and electric drive unit, cannot operate as an electric vehicle and need to be assembled in Country A with other necessary components and assemblies to function as an electric vehicle. “Applying the name, character and use test to the instant merchandise, we find a change in name from body shell and bulk components into a passenger vehicle because of the assembly operation in Country A, which involves more than 60 workstations. We also find a change in character and use. The Chinese metal body shell, battery pack, and electric drive unit lose their individual functions and identities as component parts shipped in bulk and become an integral part of the passenger vehicle with a new character and use. In sum, the assembly of the body shell and the other components in Country A constitutes a substantial transformation resulting in an article with a new name, character, and use.” Like the Segway at issue, the assembly process in Thailand is complex, with 33 workstations, and 34 workers taking an average of 15.55 hours per vehicle. The parts imported into Thailand cannot operate as an ATV until they are assembled in Thailand. Many of the parts are first pre-assembled into subassemblies and then installed in the vehicle. The individual parts lose their identities as bulk components and become essential parts of the ATV with a new character and use. You state that the raw materials imported into Thailand and used to manufacture Segway are not part of a knock down operation. Based on the foregoing analysis and consistent with CBP rulings, it is the opinion of this office that the country of origin of the Segway, model # SGW1000F-U4, is Thailand. The holding set forth above applies only to the specific factual situation and merchandise description as identified in the ruling request. This position is clearly set forth in Title 19, Code of Federal Regulations (CFR), Section 177.9(b)(1). This section states that a ruling letter is issued on the assumption that all of the information furnished in the ruling letter, whether directly, by reference, or by implication, is accurate and complete in every material respect. In the event that the facts are modified in any way, or if the goods do not conform to these facts at time of importation, you should bring this to the attention of U.S. Customs and Border Protection (CBP) and submit a request for a new ruling in accordance with 19 CFR 177.2. Additionally, we note that the material facts described in the foregoing ruling may be subject to periodic verification by CBP. This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection 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, please contact National Import Specialist Matthew Sullivan at matthew.sullivan@cbp.dhs.gov. Sincerely, (for) Steven A. Mack Director National Commodity Specialist Division