CLA-2 CO:R:C:M 951438 MBR
Mr. S. Richard Shostak
Stein Shostak Shostak & O'Hara
1620 L St., N.W., Suite 807
Washington, D.C. 20036-5605
RE: Tandon; Automatic Data Processing Machine; ADP; Parts;
Daughter Board; Without CPU; Floppy Disc Drive; Power Supply;
Cabinet Assemblies; Subassemblies; HQ 950221; HQ 088118; HQ
087695
Dear Mr. Shostak:
This is in response to your letter of February 10, 1992, on
behalf of the Tandon Corp., requesting classification of certain
subassemblies and parts for automatic data processing (ADP)
machines, under the Harmonized Tariff Schedule of the United States
(HTSUS).
FACTS:
You state that Tandon intends to import the SL III Systems
Housing Subassembly configurations consisting of the following:
chassis and cover, battery pack, power supply, input/output
expansion printed circuit board assembly (PCBA), SL III PCBA (logic
and control), floppy disk drive, fixtures (bezel, bracket, shield,
etc.), and packing material.
A second type of importation will be the same as above but
will also include an EPROM or flash memory chip.
After importation, the following components will be added: the
CPU daughter board module, the hard disk drive, the SIMMs
(additional memory storage), the EPROM or flash memory (added to
the first configuration), and additional brackets and bezels.
ISSUE:
What are the classifications of the above referenced ADP
machine subassemblies/parts, under the Harmonized Tariff Schedule
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of the United States (HTSUS)?
LAW AND ANALYSIS:
The General Rules of Interpretation (GRI's) to the HTSUS
govern the classification of goods in the tariff schedule. GRI 1
states, in pertinent part:
...classification shall be determined according to the terms
of the headings and any relative section or chapter notes...
A "motherboard" is the main interconnecting circuit board in
an electronic device, to which the various subassemblies, as
printed circuit boards, are plugged or wired. See Webster's New
World Dictionary, Third College Edition (1988), page 886. See HQ
085894, dated February 14, 1990.
"Motherboards" for ADP systems have been consistently deemed
to possess the essential character of an ADP processing unit.
Therefore, a "motherboard" containing a CPU is properly
classifiable in subheading 8471.91.00, HTSUS, which provides for:
"[a]utomatic data processing machines and units thereof: [o]ther:
[d]igital processing units, whether or not entered with the rest
of a system...."
The classification of a "motherboard" without a CPU was
addressed in HQ 088118, dated February 22, 1991, which held that
it was classifiable under subheading 8473.30.40, HTSUS, which
provides for: "[p]arts and accessories (other than covers, carrying
cases and the like) suitable for use solely or principally with the
machines of headings 8469 to 8472: [p]arts and accessories of the
machines of heading 8471: [n]ot incorporating a cathode ray tube."
However, the instant subassemblies are imported without the
Central Processing Unit (CPU) which will be assembled on a
"Daughter Board," and added after importation. A "Daughter Board"
is defined by The Computer Glossary, Alan Freedman (1989), as: "a
small printed circuit board that is attached to or plugs into a
removable printed circuit board."
Additionally, the instant importations are missing the hard
disk drive, the SIMMs (additional memory storage), the EPROM or
flash memory (missing in the first configuration), and additional
brackets and bezels. GRI 2(a) provides direction regarding
unfinished and incomplete articles. 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
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article complete or finished (or falling to be
classified as complete or finished by virtue of this
rule), entered unassembled or disassembled.
The Harmonized Commodity Description and Coding System
Explanatory Notes (ENs) although not dispositive, should be looked
to for the proper interpretation of the HTSUS. See 54 Fed. Reg.
35128 (August 23, 1989). The relevant ENs, page 2, provide some
guidance 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. However, the instant importations are
missing more than half of the necessary parts.
The Harmonized Commodity Description and Coding System
Explanatory Notes (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.
The submitted literature states that the number, cost, and
significance of the parts added after importation is much greater
than the parts that are the subject of the instant importations.
Therefore, the SL III Systems Housing Subassemblies do not have
"the main essential features of the complete machine."
Although the instant importations do not arise to the level
of incomplete processor units, in their imported state as
subassemblies, they also do not have the essential character of any
of their constituent components/parts.
In determining whether an item is a part of an article, the
courts look to the "nature, function, and purpose of an item in
relation to the article to which it is attached or designed to
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serve...." Ideal Toy Corp. v. United States, 58 CCPA 9, 13, C.A.D.
996, 433 F.2d 801, 803 (1979). See Clipper Belt Lacer Co., Inc.
v. United States, Slip Op. 90-22 (March 13, 1990).
The instant subassemblies are clearly necessary to the
completion of the ADP system, as integral, constituent, and
component parts. Therefore, for tariff purposes, they should be
considered "parts" of the machines of 8471, HTSUS. They are
classifiable in subheading 8473.30.40, HTSUS, which provides for:
"[p]arts and accessories (other than covers, carrying cases and the
like) suitable for use solely or principally with the machines of
headings 8469 to 8472: [p]arts and accessories of the machines of
heading 8471: [n]ot incorporating a cathode ray tube."
HOLDING:
The instant importations, imported together as ADP processor
unit subassemblies, are classifiable as "parts" of the machines of
8471, HTSUS, in subheading 8473.30.40, HTSUS, which provides for:
"[p]arts and accessories (other than covers, carrying cases and the
like) suitable for use solely or principally with the machines of
headings 8469 to 8472: [p]arts and accessories of the machines of
heading 8471: [n]ot incorporating a cathode ray tube."
Sincerely,
John Durant, Director