CLA-2 CO:R:C:M 089204 MBR
District Director
U.S. Customs Service
111 West Huron St.
Buffalo, NY 14202
RE: Internal Advice 22/91; Fire Alarm Systems; Components Shipped
in Bulk Form; GRI 2(a); Incomplete or Unfinished Articles;
Dear Sir:
A.N. Deringer, Inc., on behalf of their client, Edwards, Inc.,
has requested Internal Advice 22/91, regarding the classification
of bulk shipments of home alarm systems and component parts, under
the Harmonized Tariff Schedule of the United States Annotated
(HTSUSA).
FACTS:
The Edwards 8500 alarm control panel is a fully supervised
microprocessor based multi-processing system. The hardware and
associated software modules may be configured to provide a Fire
Alarm Control Panel, an Emergency Communication Panel or a totally
Integrated (Fire and Emergency Communication) Control Panel. The
associated components or parts are also shipped in bulk quantities.
ISSUE:
Is the merchandise classified in heading 8531, HTSUSA, which
provides for: "[e]lectric sound or visual signalling apparatus (for
example, bells, sirens, indicator panels, burglar or fire
alarms)...; parts thereof," or in heading 8537, HTSUSA, which
provides for: "[b]oards, panels....for electric control or the
distribution of electricity?"
LAW AND ANALYSIS:
The General Rules of Interpretation (GRIs) to the HTSUSA
govern the classification of goods in the tariff schedule. GRI 1
states, in pertinent part:
-2-
...classification shall be determined according to the terms
of the headings and any relative section or chapter notes...
The alarm system components are prima facie classifiable under
the following headings/subheadings:
8531 Electric sound or visual signalling apparatus (for
example, bells, sirens, indicator panels, burglar or fire
alarms), other than those of heading 8512 or 8530; parts
thereof:
* * * * * * * * * * * * *
8531.10.00 Burglar or fire alarms and similar apparatus.
* * * * * * * * * * * * *
8531.20.00 Indicator panels incorporating liquid crystal
devices (LCD's) or light emitting diodes
(LED's)
* * * * * * * * * * * * *
8531.90.00 Parts
* * * * * * * * * * * * *
8537 Boards, panels (including numerical control panels),
consoles, desks, cabinets and other bases equipped with
two or more apparatus of heading 8535 or 8536, for
electric control or the distribution of electricity,
including those incorporating instruments or apparatus
of chapter 90, other than switching apparatus of heading
8517:
* * * * * * * * * * * * *
8537.10.00 For a voltage not exceeding 1,000 v
In HQ 086460 (July 18, 1990), we addressed the classification
of the instant merchandise under the Tariff Schedules of the United
States (TSUS). We stated:
In HQ Ruling 071612 (July 25, 1985), the central components
of a burglar alarm system were entered without the remote
sensors, bells and sirens. Various indicator light panels
were incorporated in the front of each component. The
merchandise was found to be "more than" control panels and was
classified as burglar alarms and parts thereof in item 685.70.
HQ Ruling 071612 found that the articles were more than
control panels because they incorporated a substantial
proportion of the operating part of the machine controlled,
-3-
and in fact were the very essence of the burglar alarm
systems.
Like the burglar alarm components in HQ Ruling 071612,
the fire alarm components under consideration incorporate a
substantial proportion of the operating part of the machine
controlled. The articles incorporate the power supply for the
remote sensors and alarms controlled. The central cabinets
of all three models incorporate indicator light panels. The
Basic Integrated System includes an amplifier which provides
a speaker source for various alarm messages. The Basic
Multiplex System incorporates a Serial Link Controller which
interfaces the system's CPU and emergency Satellite
communicator (ESAC).
We held that the Edwards 8500 series fire alarm systems, when
entered without the remote sensors and sound signalling apparatus,
were classified as "[b]ells, sirens, indicator panels, burglar and
fire alarms...and parts thereof" in item 685.70, TSUS.
Furthermore, in HQ 088464 (September 11, 1991), we addressed
the scope of heading 8537. Heading 8537, HTSUSA, provides for
"[b]oards, panels . . . consoles, desks, cabinets and other bases,
equipped with two or more apparatus of heading 8535 or 8536, for
electric control or the distribution of electricity . . ." In HQ
088464, we held that the "Microselect system" did not satisfy this
description. We stated:
It is not used merely for the electric control or the
distribution of electricity. As discussed above, the system
is used to perform multiple tasks described in heading 8471,
HTSUSA. Accordingly, the subject system does not satisfy the
terms of this heading and is not properly classifiable
therein.
Similarly, like the burglar alarm components in HQ 071612, HQ
086460, and HQ 088595 (September 12, 1991), the Edwards 8500 Alarm
System under consideration incorporates a substantial proportion
of the operating part of the machine controlled.
The Harmonized Commodity Description and Coding System
Explanatory Notes (ENs) to heading 8573, HTSUSA, page 1391,
describe: "Programmable controllers" which are digital apparatus
using a programmable memory for the storage of instructions for
implementing specific functions such as logic, sequencing, timing,
counting and arithmetic, to control, through digital or analog
input/output modules, various types of machines."
However, as in HQ 088464, HQ 086460, HQ 071612, HQ 088595, and
HQ 950407 (November 15, 1991), the instant merchandise is not
merely a programmable controller.
-4-
Furthermore, GRI 2(a) provides direction here. It states:
2. (a) Any reference in a heading to an article shall be
taken to include a reference to that article
incomplete or unfinished, provided that, as entered,
the incomplete or unfinished article has the
essential character of the complete or finished
article. It shall also include a reference to that
article complete or finished (or falling to be
classified as complete or finished by virtue of this
rule), entered unassembled or disassembled.
The ENs, regarding the Section XVI General Notes, further
elaborate when they state the following on page 1132:
(IV) Incomplete Machines
Throughout the section any reference to a machine or
apparatus covers not only the complete machine, but also an
incomplete machine (i.e., an assembly of parts so far advanced
that it already has the main essential features of the
complete machine). Thus a machine lacking only a flywheel,
a bed plate, calendar rolls, tool holders, etc., is classified
in the same heading as the machine, and not in any separate
heading providing for parts. Similarly a machine or apparatus
normally incorporating an electric motor (e.g., electro-
mechanical hand tools of heading 85.08) is classified in the
same heading as the corresponding complete machine even if
presented without that motor.
Thus, it is Customs position that the Edwards 8500 Alarm
System, when imported as a system (or having the essential
character of a system), meets the terms of subheading 8531.10.00,
HTSUSA, which provides for: "[b]urglar or fire alarms and similar
apparatus."
However, you state that "Edwards Canada, is a large volume
shipper" and that "[t]hey export shipments of complete systems and
shipments of various parts." General Rule of Interpretation (GRI)
2(a), HTSUSA, states in part that a heading which provides for a
particular article will cover that article incomplete or unfinished
provided that, as imported, the unfinished article has the
essential character of the complete or finished article. The rule
also applies to incomplete or unfinished articles imported
unassembled or disassembled provided that they are to be treated
as complete or finished articles by virtue of the first part of GRI
2(a).
The ENs, although not dispositive, should be looked to for the
proper interpretation of the HTSUSA. See 54 Fed. Reg. 35128
(August 23, 1989). The relevant ENs, page 2, provide some guidance
-5-
on the application of GRI 2(a) to unassembled goods by stating that
"when goods are so presented it is usually for reasons such as
requirements or convenience of packing, handling or transport."
The ENs provide further that for purposes of Rule 2(a) the
expression "articles presented unassembled or disassembled" means
articles the components of which are to be assembled either by
means of simple fixing devices (screws, nuts, bolts, etc.) or by
riveting or welding, for example, provided only simple assembly
operations are involved.
You have made no statements or offered any evidence that these
proposed shipments would be anything more than bulk shipments of
numerous components and parts. This is not the type of
"convenience of packing, handling or transport" that the ENs
contemplate. We have previously addressed this issue in Internal
Advice 4/91, HQ 088595, and HQ 087888, dated December 3, 1990, and
held that these types of shipments are "nothing more than disparate
components in bulk form." Therefore, the volume shipments of
components and parts are classifiable pursuant to GRI 1, and
Section XVI Legal Note 2.
However, see also HQ 088760, dated March 18, 1991, which held
that when merchandise is shipped in "blister packs" and referred
to as "kits" which require only a "nut-and-bolt assembly
operation," they possess the essential character of a complete
article.
HOLDING:
The Edwards 8500 Alarm System, when imported as a system (or
having the essential character of a system), meets the terms of
subheading 8531.10.00, HTSUSA, which provides for: "[b]urglar or
fire alarms and similar apparatus."
The volume shipments of components and parts would not be
considered to have the essential character of a complete alarm
system, because they are apparently nothing more than disparate
components shipped in bulk form, and are therefore classifiable
pursuant to GRI 1, and Section XVI, Legal Note 2.
Sincerely,
John Durant, Director
Commercial Rulings Division