CLA-2 OT:RR:CTF:TCM H098958 CKG
Melvin S. Schwechter
Dewey & LeBoeuf, LLP
1101 New York Avenue, NW
Washington, DC 20005-4213
RE: Revocation of Headquarters Ruling Letter (HQ) 962445 concerning the tariff classification of fiber optic ribbon
Dear Mr. Schwechter:
This letter is in relation to Headquarters Ruling Letter (HQ) 962445 issued to you on April 3, 2001, on behalf of your client Alcoa Fujikura Ltd. In HQ 962445, CBP determined that fiber optic ribbon of various counts from 4-12 fibers was classified in subheading 8544.70 of the Harmonized Tariff Schedule of the United States (HTSUS), as optical fiber cable. It has come to our attention that our decision in HQ 962445 was incorrect. For the reasons set forth below, HQ 962445 is hereby revoked.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. §1625(c)(1)), as amended by section 623 of Title VI, notice proposing to revoke HQ 962445 was published on August 2, 2017, in Volume 51, Number 31 of the Customs Bulletin. One comment was received in opposition to the proposed action, and is addressed below.
FACTS:
CBP described the merchandise in HQ 962445 as follows:
Fujikura provides that its optical fibers are approximately 250 microns in diameter, with glass core and cladding, and dual UV acrylate coatings, in keeping with industry standards. The documentation provided shows that an additional layer, a thin coating of color is also added to the dual acrylate coating. The dual acrylate coating provides important protection and structural integrity to the bare glass fibers, responsible for each optical fiber’s tensile strength, to the extent that bare glass fibers could not be used without it. The application of dual UV acrylate coatings/sheathing provides significant protection against abrasion of the optical fibers, enhances tensile strength and reduces the effects of long-term stress, in particular exposure to humid environments which can lead to failure due to a phenomenon called “static fatigue.” Fujikura’s sample, and documentation, show that after the optical fibers are manufactured, individual optical fibers are placed into a horizontal configuration, laid side-by-side, using highly controlled tensions and geometric alignment fixtures. The optical fibers with dual acrylate coatings are then subjected to a further coating process whereby a plastic resin material (“matrix”) is applied to bond the entire grouping of fibers together. Fujikura states that “the matrix coating covers the entire outside edge of each individual fiber, such that the circumference of each of the fibers is coated with the plastic material. The matrix material also forms the outer casing and shape of the finished ribbon cable. The matrix material is cured and cooled to solidify the cable structure into its final shape. The finished optical fiber ribbon cable is then imported.
LAW AND ANALYSIS:
Merchandise is classifiable under the HTSUS in accordance with the General Rules of Interpretation (GRIs). The systematic detail of the HTSUS is such that most goods are classified by application of GRI 1, that is, according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
The HTSUS headings under consideration are:
8544 Insulated (including enameled or anodized) wire, cable (including coaxial cable) and other insulated electric conductors, whether or not fitted with connectors; optical fiber cables, made up of individually sheathed fibers, whether or not assembled with electric conductors or fitted with connectors:
9001 Optical fibers and optical fiber bundles; optical fiber cables other than those of heading 8544; sheets and plates of polarizing material; lenses (including contact lenses), prisms, mirrors and other optical elements, of any material, unmounted, other than such elements of glass not optically worked:
In addition to the headings under consideration, Note 1(m) to Section XVI, HTSUS, the section in which heading 8544, HTSUS, is located, provides that articles of Chapter 90, HTSUS, are excluded from Section XVI, HTSUS. Further, Note 1(h) to Chapter 90, HTSUS, excludes fiber optic cable of heading 8544, HTSUS.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the HTSUS. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of the headings. It is Customs and Border Protection (CBP) practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUS. See, T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
EN 85.44 provides, in pertinent part, as follows:
Provided they are insulated, this heading covers electric wire, cable and other conductors (e.g., braids, strip, bars) used as conductors in electrical machinery, apparatus or installations. Subject to this condition, the heading includes wiring for interior work or for exterior use (e.g., underground, submarine or aerial wires or cables). These goods vary from very fine insulated wire to thick cables of more complex types.
…
The heading also covers optical fibre cables, made up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors. The sheaths are usually of different colours to permit identification of the fibres at both ends of the cable. Optical fibre cables are used mainly in telecommunications because their capacity for the transmission of data is greater than that of electrical conductors.
EN 90.01 provides, in pertinent part:
This heading covers :
(A) Optical fibres and optical fibre bundles, as well as optical fibre cables other than those of heading 85.44.
Optical fibres consist of concentric layers of glass or plastics of different refractive indices. Those drawn from glass have a very thin coating of plastics, invisible to the naked eye, which renders the fibres less prone to fracture. Optical fibres are usually presented on reels and may be several kilometers in length. They are used to make optical fibre bundles and optical fibre cables.
Optical fibre bundles may be rigid, in which case the fibres are agglomerated by a binder along their full length, or they may be flexible, in which case they are bound only at their ends. If coherently bundled, they are used for transmission of images, but if randomly bundled, they are suitable only for transmission of light for illumination.
Optical fibre cables of this heading (which may be fitted with connectors) consist of a sheath containing one or more optical fibre bundles, the fibres of which are not individually sheathed.
Optical fibre bundles and cables are used primarily in optical apparatus, particularly in endoscopes of heading 90.18.
Heading 9001, HTSUS, provides for optical fibers, optical bundles, and optical fiber cables other than those of heading 8544, HTSUS. The term “bundle” is not defined in the HTSUS. When a term is not defined by the HTSUS or the legislative history, its correct meaning is its common, or commercial, meaning. See Rocknel Fastener, Inc. v. United States, 267 F.3d 1354, 1356 (Fed. Cir. 2001). The Oxford English Dictionary (2nd Ed. 1989) defines the term “bundle” as “[a] collection of things bound or otherwise fastened together; a bunch; a package, parcel.” In addition, the fiber optic industry has defined “bundle” as “[m]any individual fibers contained within a single jacket or buffer tube. Also a group of buffered fibers distinguished in some fashion from another group in the same cable core.” See OFS Fitel, Inc., 2002, Glossary of Optical Fiber Terms. Thus, based on the common and commercial definitions a fiber optic bundle is a collection of fiber optic fibers that are either completely or partially bound together within a single jacket or buffer.
In this case, the product is described as optical fiber ribbon ranging in counts from 4 to 12 individually sheathed optical fibers. The fibers are aligned side by side and are then coated with a plastic resin matrix which makes the products appear to be similar to a flat ribbon. With respect to this product, the individually sheathed fibers are bound together using the plastic matrix, which acts as a buffer. The product falls squarely within the meaning of bundle provided by the fiber optic industry as well as EN 90.01. Therefore, CBP finds that this product is described eo nomine in heading 9001, HTSUS. As such it is an article of Chapter 90, HTSUS, thereby excluding it from Section XVI, HTSUS.
Furthermore, the optical fiber bundle is not fiber optic cable of heading 8544, HTSUS. The phrase “fiber optic cable” is not defined in the HTSUS. However, CBP has historically defined fiber optic cable as “[o]ne or more optical fibers enclosed within protective covering(s) and strength members.” See HQ 966619, dated October 21, 2003; quoting The Fiber Optic Reference Guide, David R. Goff, Focal Press, (1996) at p. 153. This definition is in accord with a more recent definition in the Glossary of Optical Fiber Terms by OFS Fitel, dated January 18, 2002, which defines the phrase “fiber optic cable” as “[a]n optical fiber, multiple fiber, or fiber bundle which includes a cable jacket and strength members, fabricated to meet optical, mechanical, and environmental specifications.”
CBP has therefore held repeatedly that classification in heading 8544, as an optical fiber cable made up of individually sheathed fibers, requires the following: one or more individually sheathed optical fibers, and additional materials, including buffers, strengthening members, and jackets for protection. See e.g., HQ 964883, dated September 14, 2001 (finding that merchandise consisting of single strand optical fibers individually jacketed, without the inclusion or use of any other protective buffers, coatings, or strengthening materials was properly classified in heading 9001); HQ 966619 (finding that individually sheathed optical fibers that do not possess additional protective materials, strengtheners, or jacketing are not cables within the meaning of heading 8544); HQ W968251, dated October 3, 2007 (revoking the classification of individually sheathed optical fibers without an outer jacket or strength members in heading 8544, and reclassifying them in heading 9001); NY N132435 December 10, 2010 (finding that optical fiber assemblies with a protective buffer and outer jacket but without strength members are classified in heading 9001).
Thus, without insulating jackets and strengthening members, you have optical fibers, but even when multiple, individually sheathed optical fiber strands are bundled together, you do not yet have optical fiber cable of heading 8544 without the additional strength members and outer jacket. See HQ 964883 (“It is clear, then, that the dual acrylate or thermoplastic coating, even to a thickness of 900 microns, is not sufficient to create a cable. Additional materials, such as strengthening or protective members and jacketing are required. Buffers that are protective coatings applied directly to the fibers would not constitute such materials. Buffered fibers must be further protected by some sort of strength members and/or jackets to qualify as cable.”)
Applying these criteria to the subject merchandise, CBP finds that the instant optical fiber product does not meet the commercial definitions of fiber optic cables of heading 8544, HTSUS, because it lacks strength members and a protective outer jacketing.
One comment was received in response to the proposed notice, arguing for CBP to withdraw the proposed revocation and maintain the classification of the instant optical fiber bundles in heading 8544, HTSUS. The comment argues that there is no support in the tariff for the requirement that cables of heading 8544, HTSUS, must have strength members, and cites to HQ H251018 (the proposed revocation of New York Ruling Letter (NY) N247006, published in Volume 50, Number 33 of the Customs Bulletin on August 17, 2016) and HQ 965593 in support of that argument. The comment additionally argues that, pursuant to the ENs of each heading, products of heading 9001, HTSUS, are not used in telecommunications, but rather in medical and optical devices.
We note that the optical fiber cables described in HQ 965593 and the other rulings it affirmed (HQ 964632, HQ 963256, HQ 963213, and HQ 963016) were composed of two or more strands of glass optical fibers, with each fiber individually covered in a polymer coating similar to the instant optical fibers, but also all grouped within buffered tubes or similar coverings, accompanied by different types of insulation, and all contained within an outermost layer or jacket. Thus, in all of those cases, multiple individually sheathed optical fibers and/or bundles of such optical fibers were jacketed together with other materials providing mechanical and environmental protection and optical insulation.
The optical fibers imported by Fujikura are, by contrast, optical fibers covered in only a dual acrylate coating of unspecified thickness, then bound together in an additional plastic matrix. The subject merchandise may be considered ‘‘individually sheathed,’’ but it is readily distinguishable from the optical fiber cables described in HQ 965593 and related cases in which individually sheathed optical fibers and/or bundles of such optical fibers were jacketed together with other materials providing mechanical and environmental protection and optical insulation. As discussed above, lacking strength members and outer jacketing, individually sheathed optical fibers, whether imported in single strands or assembled together, are not optical fiber cables of heading 8544, HTSUS. While EN 90.01 does provide that, “[t]he heading . . ., excludes optical fibre cables made up of individually sheathed fibres (heading 85.44),” contrary to protestant’s assertion neither heading 9001 nor the ENs provide that individual sheathed optical fibers alone constitute an optical fiber cable under EN 8544.
In HQ H251018, CBP determined that plastic optical fiber cables, made up of individually sheathed plastic fibers, do not need to employ strength members in order to be classifiable in heading 8544, HTSUS, as such a requirement is not supported by the text of the tariff, nor does it reflect commercial realities associated with plastic optical fiber. As specifically noted in the ruling, this conclusion does not apply to glass optical fiber cables, because the plastic optical fibers are usually employed over relatively short distances and are flexible enough to withstand greater amounts of bending stress than glass optical fiber and, thus, typically do not employ or need strength members.
Finally, we note that the determining factor in the classification of optical fiber cables or bundles in heading 8544 or heading 9001 is the physical characteristics of the article; their use is secondary to their construction in determining whether heading 8544 or heading 9001 applies. Although EN 85.44 and EN 90.01 state that cables and optical fiber bundles of these headings are used in telecommunications and optical equipment, respectively, neither Explanatory Note limits the use of these products exclusively to telecommunications for cables of heading 8544 or optical apparatus for products of heading 9001. See e.g., HQ W968251, dated October 3, 2007.
HOLDING:
By application of GRIs 1 and 6, the optical fiber ribbons are classified in heading 9001, HTSUS, more specifically in subheading 9001.10.00, HTSUS, which provides for “[o]ptical fibers and optical fiber bundles; optical fiber cables other than those of heading 8544; sheets and plates of polarizing material; lenses (including contact lenses), prisms, mirrors and other optical elements, of any material, unmounted, other than such elements of glass not optically worked: [o]ptical fibers, optical fiber bundles and cables.” The 2017 column one, general rate, of duty is 6.7% ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usitc.gov/tata/hts/.
EFFECT ON OTHER RULINGS:
HQ 962445, dated April 3, 2001, is hereby revoked.
In accordance with 19 U.S.C. §1625(c), this ruling will become effective 60 days
after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division