CLA-2 OT:RR:CTF:TCM H213705 TNA
Stephanie Park
U.S. Customs Compliance Assistant Manager/ Logistics
L.G. Electronics U.S.A., Inc.
1000 Sylvan Avenue
Englewood Cliffs, NJ 07632
Re: Tariff Classification of docking stations for the iPhone, iPad, and iPod
Dear Ms. Park:
This is in response to your request on behalf of LG Electronics U.S.A., Inc. (“LG Electronics”), dated March 9, 2012 to U.S. Customs and Border Protection (“CBP”), National Commodity Specialist Division, for a binding ruling on the tariff classification of two models of docking stations with speakers for the iPod, iPad, and iPhone under the Harmonized Tariff Schedule of the United States (HTSUS). Your ruling request was forwarded to this office for a response.
FACTS:
The subject merchandise consists of two types of docking stations with speakers intended for exclusive use with the iPod, iPad, and iPhone. Each docking station is a single unit that contains both loudspeakers and a base for the iPod, iPad or iPhone. The electronic device is inserted into this base, and the docking stations serve both to charge the device, and to play the music files on it through the loudspeakers.
The two models at issue are the ND3520 and the ND4520, neither of which contain radios. Both the ND3520 and the ND4520 contain loudspeakers and a built-in dock for the iPod, iPad, and iPhone. The dock allows users to charge the device, while the loudspeakers allow the user to play the music that is saved on the iPod, iPad or iPhone. The ND3520 and the ND4520 contain audio input that allows connection to MP3 players, laptops, etc. The ND3520 and the ND4520 contain Bluetooth, which allows them to play music directly from a laptop or mobile phone. The ND3520 and the ND4520 also contain a USB port, which allows the speakers to broadcast music from USB devices.
ISSUE:
Where are the subject docking stations classified?
LAW AND ANALYSIS:
As an initial matter, we are unable to rule on the ND1520, the docking station with a built-in radio. Section 177.7, Customs and Border Protection Regulations (19 CFR 177.7), provides that rulings will not be issued in certain circumstances. Section 177.7(a) states, in relevant part, that “no rulings will be issued in any instance in which it appears contrary to the sound administration of the Customs and related laws to do so.” After reviewing your request, it has come to our attention that certain published rulings need to be reconsidered so that we do not have rulings in force that may be inconsistent with our current views. Accordingly, we are unable to issue a ruling at this time.
We intend to initiate a notice and comment procedure pursuant to 19 U.S.C. §1625(c) to reconsider one or more rulings. In this manner, we believe we can best meet our obligations regarding the sound administration of the HTSUS and other Customs and related laws. We invite you to comment on the relevant proposed reconsideration, which we will publish soon in an issue of the Customs Bulletin, available at www.cbp.gov. On publication of the final ruling, if you still wish, you may resubmit your request for a prospective ruling to Customs and Border Protection, National Commodity Specialist Division, One Penn Plaza, 10th Floor, New York, NY 10119.
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined 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 the following:
8504 Electrical transformers, static converters (for example, rectifiers) and inductors; parts thereof:
8518 Microphones and stands therefor; loudspeakers, whether or not mounted in their enclosures; headphones and earphones, whether or not combined with a microphone, and sets consisting of a microphone and one or more loudspeakers; audio-frequency electric amplifiers; electric sound amplifier sets; parts thereof
8527 Reception apparatus for radiobroadcasting, whether or not combined, in the same housing, with sound recording or reproducing apparatus or a clock:
Note 3 to Section XVI, HTSUS, of which Chapters 84 and 85 are a part, states, in pertinent part, the following:
Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.
In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System, which constitute the official interpretation of the Harmonized System at the international level, may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
The EN for heading 8504 states, in pertinent part, the following:
(II) ELECTRICAL STATIC CONVERTERS
The apparatus of this group are used to convert electrical energy in order to adapt it for further use. They incorporate converting elements (e.g., valves) of different types. They may also incorporate various auxiliary devices (e.g., transformers, induction coils, resistors, command regulators, etc.). Their operation is based on the principle that the converting elements act alternately as conductors and non conductors.
The fact that these apparatus often incorporate auxiliary circuits to regulate the voltage of the emerging current does not affect their classification in this group, nor does the fact that they are sometimes referred to as voltage or current regulators.
The EN for heading 8518 states, in pertinent part, the following:
This heading covers microphones, loudspeakers, headphones, earphones and audio frequency electric amplifiers of all kinds presented separately, regardless of the particular purpose for which such apparatus may be designed (e.g., telephone microphones, headphones and earphones, and radio receiver loudspeakers).
The heading also covers electric sound amplifier sets….
(B) LOUDSPEAKERS, WHETHER OR NOT MOUNTED IN THEIR ENCLOSURES
The function of loudspeakers is the converse of that of microphones : they reproduce sound by converting electrical variations or oscillations from an amplifier into mechanical vibrations which are communicated to the air. They include the following types :
(1) Moving iron or moving coil loudspeakers. In the moving iron loudspeaker an armature or reed of soft iron is placed in the field of a permanent magnet and under the influence of the coils in which the current passes. The field varies in accordance with this current, and a diaphragm fixed to the armature or reed sets up corresponding vibrations in the air. Moving coil loudspeakers consist essentially of a coil which is placed in the field of a permanent or electro magnet and which is energised by the varying current. The coil is rigidly connected to a diaphragm.
(2) Piezo electric loudspeakers, based on the principle that certain natural or artificial crystals are subject to mechanical distortion when an electric current is applied to them. Such loudspeakers are usually known as “ crystal loudspeakers ”.
(3) Electrostatic loudspeakers (also known as condenser-type loudspeakers). These depend on the electrostatic reactions between two plates (or electrodes), one plate serving as a diaphragm.
Matching transformers and amplifiers are sometimes mounted together with loudspeakers. Generally the electrical input signal received by loudspeakers is in analogue form, however in some cases the input signal is in digital format. Such loudspeakers incorporate digital to analogue converters and amplifiers from which the mechanical vibrations are communicated to the air.
Loudspeakers may be mounted on frames, chassis or in cabinets of different types (often acoustically designed), or even in articles of furniture. They remain classified in this heading provided the main function of the whole is to act as a loudspeaker. Separately presented frames, chassis, cabinets, etc., also fall in this heading provided they are identifiable as being mainly designed for mounting loudspeakers; articles of furniture of Chapter 94 designed to receive loudspeakers in addition to their normal function remain classified in Chapter 94.
The heading includes loudspeakers designed for connection to an automatic data processing machine, when presented separately.
The EN for heading 8527 states, in pertinent part, the following:
The sound radio broadcasting apparatus falling in this heading must be for the reception of signals by means of electro magnetic waves transmitted through the ether without any line connection.
This group includes:
(1) Domestic radio receivers of all kinds (table models, consoles, receivers for mounting in furniture, walls, etc., portable models, receivers, whether or not combined, in the same housing, with sound recording or reproducing apparatus or a clock)….
(5) Stereo systems (hi-fi systems) containing a radio receiver, put up in sets for retail sale, consisting of modular units in their own separate housing, e.g., in combination with a CD player, a cassette recorder, an amplifier with equaliser, loudspeakers, etc. The radio receiver gives the system its essential character.
In beginning our analysis, we note that similar merchandise- i.e., docking stations without FM radios that are designed for use solely with iPods- have been classified in heading 8522, HTSUS, which provides for “Parts and accessories suitable for use solely or principally with the apparatus of headings 8519 or 8521.” See, e.g., NY L88357, dated October 28, 2005; NY M80063, dated February 9, 2006; NY L87329, dated October 6, 2005; NY R03181, dated February 10, 2006; NY M80417, dated March 2, 2006. In these cases, we reasoned that the iPods are apparatus of either heading 8519 or heading 8521, HTSUS, a conclusion that was supported by prior CBP rulings. See, e.g., HQ H012561, dated April 28, 2009. Thus, we found that heading 8522, HTSUS, fully described the docking stations at GRI 1, and was therefore preferable to headings such as 8504 and 8518, HTSUS, which only described the charging function and the speaker function, respectively.
In the present case, however, the subject merchandise is not designed solely or principally for use with the iPod. To the contrary, it is designed for use with the iPod of heading 8519, HTSUS, the iPad of heading 8471, HTSUS, and the iPhone of heading 8517, HTSUS. See, e.g., HQ H122342, dated April 12, 2011. As a result, the terms of heading 8522, HTSUS, do not fully describe the subject merchandise.
The ND3520 and the ND4520 meet the definition of a composite machine of Note 3 to Section XVI. Thus, we look to determine their principal function. Both models serve to charge the device that is docked therein, but also to convey the music on them through their loudspeakers. The loudspeakers allow users to relay their music to a wider audience in a larger space, making the subject merchandise suitable for use throughout a whole house or at a party.
Furthermore, the Bluetooth audio relay feature on both these models allows the consumer to use the docking station to play music that is stored on a computer or smart phone. The input jack allows another source of music to be broadcast over the loudspeakers because it makes the ND3520 and the ND4520 compatible with music on MP3 players and other devices. In each of these uses, the loudspeakers allow a greater volume and range of sound. Lastly, both models are advertised as “docking speakers” that deliver quality sound, emphasizing the function of the speakers. See, e.g., http://www.lg.com/uk/tv-audio-video/home-audio/LG ND4520.jsp.
By contrast, there are simple docking stations on the market that do not contain loudspeakers, and whose sole function is to charge such electronic devices as the iPod, iPad and iPhone. See, e.g., http://www.walmart.com/ip/ Premiertek-Cradle-Dock-Station-for-iPod-iPhone-iPad-and-iPad-2/20551737. Thus, a consumer who simply wanted to charge one of these devices could purchase one of these docking stations or a power cord. A consumer is not likely to buy a docking station with loudspeakers, such as the subject merchandise, simply for its charging capacity. It is more likely that a consumer will buy the ND3520 or the ND4520 for the loudspeakers or for the combination of the two features. Furthermore, the subject docking stations can only charge the device when it is connected to electrical power. The ND4520 is imported with a battery pack that allows it to broadcast music without an electrical connection. As a result, we find that the loudspeakers function is the principal function of the ND3520 and the ND4520. As such, the ND3520 or the ND4520 are classified in heading 8518, HTSUS, as “loudspeakers, whether or not mounted in their enclosures.”
HOLDING:
By operation of GRI 1, LG’s Model ND 3520 iPod Docking Station and Model ND 4520 iPod Docking Station are classified in heading 8518, HTSUS. They are specifically provided for in subheading 8518.22.00, HTSUS, which provides for “Microphones and stands therefor; loudspeakers, whether or not mounted in their enclosures; headphones and earphones, whether or not combined with a microphone, and sets consisting of a microphone and one or more loudspeakers; audio-frequency electric amplifiers; electric sound amplifier sets; parts thereof: Loudspeakers, whether or not mounted in their enclosures: Multiple loudspeakers, mounted in the same enclosure.” The 2012 column one, general rate of duty is 4.9% ad valorem.
Duty rates are provided for your convenience and subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov.
A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Ieva O’Rourke, Chief
Tariff Classification and Marking Branch