CLA-2 CO:R:C:M 952673 MBR
Mr. Richard Brown
Yamato Customs Brokers USA, Inc.
1180 McLester St., Suite 1
Elizabeth, NJ 07201
RE: Sega Of America, Inc.; Sega CD; Mega CD; Genesis; Video Game
Equipment; Compact Disc; Read Only Memory; ROM
Dear Mr. Brown:
This is in reply to your letter of September 21, 1992,
requesting classification of the Genesis video game component
called the "SEGA CD" or "MEGA CD," under the Harmonized Tariff
Schedule of the United States (HTSUS).
FACTS:
The "SEGA CD" or "MEGA CD" (hereafter "Sega CD") is described
as a high intensity CD-ROM (compact disc read only memory) machine
to be used in conjunction with the Genesis video game system. The
submitted literature states that the Sega CD "is a complete system
that lets you enjoy outstanding audio, video, and games on compact
disc. It connects to your Sega Genesis to play sharp, clean sound
and brilliant graphics with up to 64 colors from a palette of 512
colors on your TV. You can even enjoy rich stereo sound by adding
headphones, a portable cassette player or stereo speakers." The
Sega CD contains a 16 bit processor that operates in conjunction
with the 16 bit processor in the Genesis system. Each compact disc
contains 500 times the amount of information as one regular game
cartridge.
The Sega CD also includes 5 compact discs (3 game CDs, 1 music
CD with graphics, and one music only CD).
ISSUE:
What is the classification of the Sega CD video game and
compact disc player imported with compact discs, under the
Harmonized Tariff Schedule of the United States (HTSUS)?
-2-
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...
The Sega CD is a video game and a music compact disc player.
Therefore, it is a multi-function machine that is prima facie
classifiable under the following provisions:
* * * * * * * * * * * * * *
8519 Turntables, record players, cassette players and other
sound reproducing apparatus, not incorporating a sound
recording device:
8519.99.00 Other sound reproducing apparatus: Other
* * * * * * * * * * * * * *
9504 Articles for arcade, table or parlor games, including
pinball machines:
9504.10.00 Video games of a kind used with a television
receiver and parts and accessories thereof
The Harmonized Commodity Description Coding System Explanatory
Notes (ENs) to the HTSUS, regarding multi-function machines, page
1132, state in pertinent part: "[i]n general, multi-function
machines are classified according to the principal function of the
machine." The Sega CD is designed and marketed principally for its
video game function. It has special connections for the Genesis
system, and its control functions are primarily operated by viewing
on a television screen. Thus, while the Sega CD is capable of
playing standard music compact discs, it is Customs opinion that
the principal function is that of the video game function. This
is not akin to a standard music CD player that would be purchased
principally for music CD operation.
Chapter 85, Legal Note 6, provides as follows: "[r]ecords,
tapes and other media of heading 8523 or 8524 remain classified in
those headings, whether or not they are entered with the apparatus
for which they are intended." Therefore, the compact discs that
are imported with the Sega CD are classifiable separately in
subheading 8524.90.40, HTSUS, which provides for: "[r]ecords, tapes
and other recorded media for sound or other similarly recorded
phenomena...: [o]ther: [o]ther."
-3-
HOLDING:
The Sega CD multi-function video game system and music compact
disc player is classifiable in subheading 9504.10.00, HTSUS, which
provides for: "[a]rticles for arcade, table or parlor games,
including pinball machines: [v]ideo games of a kind used with a
television receiver and parts and accessories thereof." The rate
of duty is 3.9 percent ad valorem.
The compact discs that are imported with the Sega CD are
classifiable separately in subheading 8524.90.40, HTSUS, which
provides for: "[r]ecords, tapes and other recorded media for sound
or other similarly recorded phenomena...: [o]ther: [o]ther." The
rate of duty is 9.7 cents per square meter of recording surface.
Sincerely,
John Durant, Director