HS 870360 Other vehicles, with both spark-ignition internal combustion piston engine and electric motor as motors for propulsion, capable of being charged by plugging to external source of electric power

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What products does HS 870360 cover?

This subheading covers vehicles designed for the transport of persons, specifically those equipped with both a spark-ignition internal combustion piston engine and an electric motor for propulsion, and crucially, capable of being recharged by connecting to an external source of electric power. According to the World Customs Organization's Harmonized System Nomenclature, these are commonly known as plug-in hybrid electric vehicles (PHEVs). The USITC Harmonized Tariff Schedule and the EU TARIC database confirm this scope, encompassing passenger cars and other vehicles of a kind principally used for the transport of persons that meet these dual-motor and external charging criteria.

What falls outside HS 870360?

The following products are excluded from HS 870360: vehicles powered solely by an internal combustion engine (classified under 8703.21-8703.24 or 8703.31-8703.33), vehicles powered solely by an electric motor without an internal combustion engine (classified under 8703.80), and hybrid vehicles that cannot be charged from an external source (often classified under 8703.90 or other relevant subheadings depending on their primary propulsion). For instance, a standard hybrid electric vehicle (HEV) that regenerates power internally but cannot be plugged in would not fall under this specific subheading.

What are common classification mistakes for HS 870360?

A common error is misinterpreting the "capable of being charged by plugging to external source of electric power" requirement. Importers may mistakenly classify vehicles with regenerative braking systems that do not allow for external charging under this code. Furthermore, confusion can arise between vehicles with a spark-ignition engine and those with a compression-ignition (diesel) engine; the latter, when combined with an electric motor and external charging capability, would fall under a different subheading, such as 8703.70. Adherence to General Rule of Interpretation (GRI) 1 is paramount, focusing on the specific wording of the heading and subheading.

How should importers classify products under HS 870360?

The correct procedure for classifying vehicles under HS 870360 involves a thorough review of the vehicle's technical specifications. Importers and customs brokers must verify the presence of both a spark-ignition internal combustion piston engine and an electric motor for propulsion. Crucially, they must confirm the vehicle's ability to be recharged by plugging into an external electrical outlet, as documented by the manufacturer's specifications or vehicle manuals. Consulting the official tariff schedules of the importing country, such as the USITC HTS or EU TARIC, is essential for confirming the precise classification and any associated notes or legal texts.

How is the duty calculated for products under HS 870360?

A 2023 Toyota RAV4 Prime Plug-in Hybrid Electric Vehicle, weighing 1,950 kg and declared at a customs value of $35,000 USD, would attract a US duty of $1,050. This is calculated using the Most Favored Nation (MFN) duty rate of 6% ad valorem, applied to the declared customs value ($35,000 USD × 0.06 = $2,100 USD). However, for vehicles under 8703, the USITC Harmonized Tariff Schedule often applies a specific duty based on weight or a combination of value and weight. For this example, assuming a specific duty rate of $0.54 per kg, the duty would be $1,053 (1,950 kg × $0.54). The higher of the two rates would apply, so the duty is $2,100. (Note: This is a simplified example; actual duty calculations can be more complex and may involve additional fees or specific trade agreement considerations.)

Which trade agreements reduce duties for HS 870360?

Several free trade agreements may reduce the applicable duty rate for HS 870360, including the United States-Mexico-Canada Agreement (USMCA), which can provide for a duty rate of Free for qualifying vehicles originating from Canada or Mexico. Additionally, the Generalized System of Preferences (GSP) may offer reduced or Free duty rates for eligible vehicles from certain developing countries. To claim these preferences, importers typically require a self-certified origin statement for USMCA or a GSP Form A for GSP beneficiaries, depending on the specific agreement and the exporting country's eligibility. Documentation requirements are jurisdiction-specific.

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