OT:RR:CTF:EMAIN H312223 SKK
Eric Segal
Panasonic Corporation of North America
Two Riverfront Plaza
Newark, NJ 07102
Re: Revocation of NY N304264; NY N213872; NY N108329, NY N300201, NY N301862, NY N201495, NY N108330, and NY N148555; Modification of NY N168766; Telematics device; Telemetry device; Fleet management device; Fleet tracker; Asset tracker; Cargo tracker.
This ruling is in reference to New York Ruling Letter (NY) N304264, dated May 22, 2019, in which U.S. Customs and Border Protection (CBP) classified a telematics device under heading 8517, Harmonized Tariff Schedule of the United States (HTSUS), specifically subheading 8517.62.00, HTSUS, which provides for “[T]elephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528; parts thereof: Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network): Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus:.” Upon reconsideration, we have determined that the tariff classification of the merchandise at issue in NY N304264 is incorrect.
CBP has also reviewed NY N213872, dated May 16, 2012, NY N108329, dated June 28, 2010, NY N300201, dated September 11, 2018, and NY N301862, dated December 11, 2018, which also involve the classification of telemetry devices in heading 8517.62.00, HTSUS. CBP has also undertaken the review of telemetry devices classified in NY N201495, dated February 14, 2012, NY N168766, dated June 21, 2011, NY N108330, dated June 22, 2010, and NY N148555, dated March 3, 2011, under heading 8526, HTSUS, specifically subheading 8526.91.00, HTSUS, which provides for “[R]adar apparatus, radio navigational aid apparatus and radio remote control apparatus: Other: Radio navigational aid apparatus.” We have also determined that the tariff classification of the merchandise at issue in these rulings is incorrect.
Upon reconsideration, we have determined that the tariff classification of the subject merchandise at issue in the above rulings is incorrect or partially incorrect. Accordingly, pursuant to the analysis set forth below, CBP is revoking NY N304264, NY N213872, NY N108329, NY N300201, NY N301862, NY N201495, NY N108330, and NY N148555 and modifying NY N168766.
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, a notice proposing to revoke NY N304264, NY N213872, NY N108329, NY N300201, NY N301862, NY N201495, NY N108330, and NY N148555, and to modify NY N168766, was published on September 29, 2021, in Volume 58, Number 38 of the Customs Bulletin. No comments were received in response to the proposed action.
FACTS:
CBP rulings classifying telematics devices in heading 8517, HTSUS:
NY N304264: The subject articles are identified as "Telematic Control Units," referenced item numbers 51986538 and 519865390. The devices are designed for installation in vehicles and connect to a Controller Area Network (CAN bus). They communicate vehicle data to a backend server. They feature an internal battery, BLE 4.2 connectivity, LTE/4G/3G/2G cell modem, GPS/GLOANASS functionality, and internal cellular and GPS antennas. The GPS functionality provides mobile phone access via the device to a vehicle’s position and routes the phone to that vehicle. The GPS functions to provide location data.
NY N213872: The subject article is a telemetry device, identified as the “XT6000G.” The device mounts on a refrigerated ship container. It collects GPS location data and transmits/receives data (i.e., alarms, changes in power or environmental conditions) between the container’s microcontroller and the external server. The device features an integrated 3G modem and GPS to provide location data.
NY N108329: The subject articles are identified as the “Communicator 500” and “Communicator 1000.” Both items are used for fleet management telemetry communications. The “Communicator 500” is a cellular CDMA/EvDO (transmission and reception) communications platform for vehicle fleets and includes an integrated GPS for location tracking. The unit mounts inside a vehicle and offers multiple input and output ports for monitoring vehicle functions and status. The “Communicator 1000” is a high speed, secure mobile hotspot available with GSM of CDMA cellular (transmission and reception) technology. This device integrates a 3G cellular modem, GPS, and wireless LAN technologies in a single vehicle-mounted platform. The “Communicator 1000” reduces fleet operational costs by tracking and improving vehicle-centric metrics, such as driver performance and safety behavior.
NY N300201: The subject articles are identified as the “Flex OBD-II asset tracker,” the “TT600 solar powered asset tracker with Cat-M,” and the “TT603 solar powered asset tracker with Cat-M.” These devices enhance fleet management by collecting, recording and transmitting/receiving location and other data pertaining to vehicles, trailers or containers. All three models feature a cellular modem. The “Flex OBD-II” also features an OBD-II code reader. Although NY N300201 does not specify whether the subject devices feature a GPS component, internet research on these products indicates that they possess a GPS component that collects location data. CBP classified the subject articles in subheading 8517.62.00, HTSUS.
NY N301862: The articles at issue consist of two externally mounted asset management/tracking devices, identified as the “Falcon GXT5002C” and the “GXT5002.” They are used to track/report various data elements from (generally) a tractor-trailer. They perform remote data collection that provides location information of assets and cargo status. They operate on a battery pack that recharges from an integrated solar panel. The devices feature a LTE network cellular modem. The ruling requester submitted to CBP that the subject devices do not feature a GPS. However, the product installation specifications for the “Falcon GXT5002C” describe the model as follows: “[T]he GXT5002C is a SkyBitz GPS tracking device used to determine the location as well as the loaded status of a trailer. It communicates via cellular technology and has a wireless interface capability for connectivity to other SkyBitz wireless devices.” The product specifications for the “Falcon GXT5002” do not reference a GPS and indicate that it features an accelerometer to collect start/stop data. CBP classified both products under subheading 8517.12.00, HTSUS.
CBP rulings classifying telematics devices in heading 8526, HTSUS:
NY N201495: The article at issue is a Micro-Electro-Mechanical device, identified as item “CTDOBD1.” The device is designed for installation in a vehicle and contains a cellular modem, GPS, accelerometer, gyroscope, and magnetometer. It transmits the data from the GPS and sensors via a cellular modem to company servers. The device is used to assist in fleet management. Pursuant to Note 3 to Section XVI and Note 3 to Chapter 90, HTS, CBP determined that the subject article was classified under subheading 8526.91.00, HTSUS, on the basis that the GPS imparted the article’s principal function.
NY N168766: Two articles were classified in this ruling, “GPS Personal Trackers” (referenced item numbers CR-GT80MT, CR-GT30GT, CR-GT30XGT, and CR-GT60GT), and “GPS Vehicle Trackers,” (referenced item numbers CR-GT300VT, CR-GT310VT, and CR-GT400MVT). Only the “GPS Vehicle Trackers” are subject to this reconsideration. The “GPS Vehicle Trackers” are designed for real-time tracking and fleet management. An integrated GPS collects location data and the data is transmitted to a specified mobile phone or server base through GPS, GSM, and GPRS capabilities. Pursuant to Note 3 to Section XVI, HTS, CBP classified the subject article under subheading 8526.91.00, HTSUS, and determined that the principal function of the composite machine was performed by the GPS.
NY N108330: The articles at issue are identified as the “Wireless Matrix Reporter 101” and the “Wireless Matrix Reporter 112.” These devices track mobile assets such as trucks. The tracking devices mount to a vehicle’s windshield or under the dashboard and are equipped with USB device ports for interface with USB-equipped devices. The “Wireless Matrix Reporter 101” consists of a GPS and cellular modem. The “Wireless Matrix Reporter 112” integrates a transceiver with a GPS receiver. CBP determined that subject articles were composite machines classified under subheading 8526.91.00, HTSUS, in accordance with Note 3 to Section XVI, HTS.
NY N148555: The subject article is identified as the “TAG-150 GPS/GPRS Tracking Kit.” The device is a tracking unit consisting of a printed circuit board assembly with integrated GPS, GPRS modem, SIM card, Li-Polymer battery and firmware, all housed within a waterproof enclosure. The device is a fleet management tool used to monitor golf carts, utility vehicles and turf equipment by communicating location data to the TAG server through the cellular network. CBP determined that subject article is a composite machine classified under subheading 8526.91.00, HTSUS, in accordance with Note 3 to Section XVI, HTS.
In summary, the articles at issue in the above-referenced rulings are telematics devices, also commonly referred to as telemetry devices or fleet/asset/cargo management devices or trackers. The subject telematics devices measure and/or collect data at remote points and transmit/receive data via integrated cellular modems to the end user. The subject articles are telematics devices specifically used in fleet management applications.
LAW AND ANALYSIS:
Classification under the HTSUS is in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods will 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 will then be applied in order.
GRI 3(a) provides that “the heading which provides the most specific description shall be preferred to headings providing a more general description.” GRI 3(b) states, in pertinent part, that composite goods that cannot be classified by reference to GRI 3(a), are to be classified as if they consisted of the component that gives them their essential character. GRI 3(c) provides that when goods cannot be classified by reference to GRI 3(a) or 3(b), they are to be classified in the heading that occurs last in numerical order among the competing headings that equally merit consideration.
The articles in the rulings identified above feature cellular modems, described by heading 8517, HTSUS, which provides for, inter alia, apparatus for the wireless transmission or reception of data. All of the articles, with the exception of the “GXT5002” model the subject of NY N301862, also feature a GPS component for collecting location data, described by heading 8526, HTSUS. Some of the articles also feature measuring devices such as an OBD-II code reader (the “Flex OBD-II asset tracker” at issue in NY N300201) and accelerometer (NY N201495 and NY N301862), described by heading 9031, HTSUS. Therefore, the following HTSUS headings are under consideration for all the rulings the subject of this reconsideration:
8517 Telephone sets, including telephones for cellular networks or for other wireless
networks; other apparatus for the transmission or reception of voice, images or
other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission apparatus of
heading 8443, 8525, 8527 or 8528; parts thereof:
8526 Radar apparatus, radio navigational aid apparatus and radio remote control
apparatus:
In addition, for NY’s N300210, N201495 and N301862, the following HTSUS heading is also under consideration:
9031 Measuring or checking instruments, appliances and machines, not specified or
included elsewhere in this chapter; profile projectors; parts and accessories
thereof:
Note 3 to Section XVI, HTSUS, provides:
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.
Note 3 to Chapter 90 states that the provisions of Note 3 to section XVI also apply to this chapter.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs)
constitute the official interpretation of the Harmonized System. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The ENs to Note 3 to Section XVI provide:
(VI) MULTI FUNCTION MACHINES
AND COMPOSITE MACHINES
(Section Note 3)
In general, multi-function machines are classified according to the principal function of the machine.
Multi-function machines are, for example, machine-tools for working metal using interchangeable tools, which enable them to carry out different machining operations (e.g., milling, boring, lapping).
Where it is not possible to determine the principal function, and where, as provided in Note 3 to the Section, the context does not otherwise require, it is necessary to apply General Interpretative Rule 3 (c); such is the case, for example, in respect of multi function machines potentially classifiable in several of the headings 84.25 to 84.30, in several of the headings 84.58 to 84.63 or in several of the headings 84.70 to 84.72.
The ENs to heading 85.26 state that this heading includes the following:
(1) Radio navigational aid equipment (e.g., radio beacons and radio buoys, with fixed or rotating aerials; receivers, including radio compasses equipped with multiple aerials or with directional frame aerial). It also includes global positioning system (GPS) receivers.
As explained above, the subject articles are telematics devices used in fleet management applications. Fleet telematics devices function to monitor a variety of vehicle/cargo information (i.e., location, driver behaviour, vehicle activity, engine diagnostics, environmental conditions) and transmit that data in real time to fleet operators to enable them to manage their resources. Fleet telematics devices are designed in various configurations. Simpler devices may feature only a cellular modem and GPS; other devices may include additional integrated components that function to obtain data that is specific to the needs of the end-user. The articles at issue feature key components such as a cellular modem, GPS, code reader, and accelerometer. Data relating to location (GPS), vehicle diagnostics (code reader) and changes in velocity, orientation and driving habits (accelerometer) all provide essential information in the context of fleet management, and the cellular modem transmits that data to end-users in real-time. Each of these components (modem, GPS, code reader, accelerometer) contributes equally to the device’s function, i.e., obtaining and transmitting real-time data for fleet management purposes. In this regard, we note that the importance of components that monitor essential data elements is dependent upon that data being able to reach the end user in real time. Similarly, the importance of the modem is negated if there is no data to transmit. Accordingly, we conclude that no single key component of the subject telematics devices imparts the principal function.
As it is not possible to determine which component imparts the principal function to the subject merchandise, classification is determined pursuant to GRI 3(c), which provides that goods are to be classified in the heading that occurs last in numerical order among the competing headings that equally merit consideration. As noted supra, all the subject articles contain a cellular modem described in heading 8517, HTSUS. All of the subject articles, with the exception of the “GXT5002” at issue in NY N301862, also feature a GPS component for collecting location data, described by heading 8526, HTSUS. The “Flex OBD-II asset tracker” at issue in NY N300201 also features an OBD-II code reader, described by heading 9031, HTSUS. The “CTDOBD1” at issue in NY N201495 and the “Falcon GXT5002” at issue in NY N301862 also feature an accelerometer, described by heading 9031, HTSUS. Accordingly, the articles the subject of this reconsideration are classified as follows:
NY N304264: The "Telematic Control Units" (item numbers 51986538 and 51986539) feature a cellular modem (heading 8517, HTSUS) and GPS (heading 8526, HTSUS). Pursuant to GRI 3(c), the subject articles are classified in heading 8526, HTSUS, specifically subheading 8526.91.00, HTSUS, which provides for “[R]adar apparatus, radio navigational aid apparatus and radio remote control apparatus: Other: Radio navigational aid apparatus:.”
NY N213872: The subject telemetry device identified as the “XT6000G” features a cellular modem and GPS. Pursuant to GRI 3(c), the subject article is classified in heading 8526, HTSUS, specifically subheading 8526.91.00, HTSUS.
NY N108329: The subject articles identified as the “Communicator 500” and “Communicator 1000” feature a cellular modem and GPS. Pursuant to GRI 3(c), the subject articles are classified in heading 8526, HTSUS, specifically subheading 8526.91.00, HTSUS.
NY N300201: The subject articles are identified as the “Flex OBD-II asset tracker,” the “TT600 solar powered asset tracker with Cat-M,” and the “TT603 solar powered asset tracker with Cat-M.” The “Flex OBD-II asset tracker” features a cellular modem, GPS, and OBD-II code reader. Pursuant to GRI 3(c), the “Flex OBD-II asset tracker” is classified in heading 9031, HTSUS, specifically subheading 9031.80.80, HTSUS, which provides for “[M]easuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter; profile projectors; parts and accessories thereof: other instruments, appliances and machines: other.” The “TT600 solar powered asset tracker with Cat-M” and the “TT603 solar powered asset tracker with Cat-M” feature a cellular modem and GPS. Pursuant to GRI 3(c), the “TT600 solar powered asset tracker with Cat-M” and the “TT603 solar powered asset tracker with Cat-M” are classified in heading 8526, HTSUS, specifically subheading 8526.91.00, HTSUS.
NY N301862: The subject articles are identified as the “Falcon GXT5002C” and the “GXT5002.” The “Falcon GXT5002C” features a cellular modem and GPS. Pursuant to GRI 3(c), the “Falcon GXT5002C” is classified in heading 8526, HTSUS, specifically subheading 8526.91.00, HTSUS. The “Falcon GXT5002” features a cellular modem and an accelerometer. Pursuant to GRI 3(c), the “Falcon GXT5002” is classified in heading 9031, HTSUS, specifically subheading 9031.80.80, HTSUS.
NY N201495: The “CTDOBD1” features a cellular modem, GPS, accelerometer, gyroscope, and magnetometer. CBP classified the subject article under subheading 8526.91.00, HTSUS, pursuant to Note 3 to Section XVI and Note 3 to Chapter 90, HTS. The subject article is properly classified, pursuant to GRI 3(c), under subheading 9031.80.80, HTSUS.
NY N168766: Two articles are at issue in this ruling, “GPS Personal Trackers” (referenced items CR-GT80MT, CR-GT30GT, CR-GT30XGT, and CR-GT60GT), and “GPS Vehicle Trackers,” (referenced items CR-GT300VT, CR-GT310VT, and CR-GT400MVT). Only the “GPS Vehicle Trackers” are subject to this reconsideration. The “GPS Vehicle Trackers” feature a cellular modem and GPS. Although CBP correctly classified the subject “GPS Vehicle Trackers” under subheading 8526.91.00, HTSUS, the legal basis for such classification pursuant to Note 3 to Section XVI, HTS, is incorrect. The subject “GPS Vehicle Trackers” are properly classified under subheading 8526.91.00, HTSUS, pursuant to GRI 3(c).
NY N108330: The subject articles are identified as the “Wireless Matrix Reporter 101” and the “Wireless Matrix Reporter 112.” The devices consist of a cellular modem and GPS. Although CBP correctly classified these articles under subheading 8526.91.00, HTSUS, the legal basis for such classification pursuant to Note 3 to Section XVI, HTS, is incorrect. The subject articles are properly classified under subheading 8526.91.00, HTSUS, pursuant to GRI 3(c).
NY N148555: The “TAG-150 GPS/GPRS Tracking Kit” features a cellular modem and GPS. Although CBP correctly classified this article under subheading 8526.91.00, HTSUS, we note that the legal basis for such classification pursuant to Note 3 to Section XVI, HTS, is incorrect. The subject article is properly classified under subheading 8526.91.00, HTSUS, pursuant to GRI 3(c).
HOLDING:
By application of GRIs 1, 3(c) and 6, the subject fleet telematics devices at issue in NY N304264, NY N213872, NY N108329, NY N300201 (only the “TT600 solar powered asset tracker with Cat-M” and “TT603 solar powered asset tracker with Cat-M”), N301862 (only the “Falcon GXT5002C”), NY N201495, NY N108330, NY N148555 and NY N168766 (only the “GPS Vehicle Trackers”) are classified under heading 8526, HTSUS, specifically subheading 8526.91.00, HTSUS, which provides for “[R]adar apparatus, radio navigational aid apparatus and radio remote control apparatus: Other: Radio navigational aid apparatus:.” The applicable rate of duty is free.
By application of GRIs 1, 3(c) and 6, the subject fleet telematics devices at issue in NY N201495, NY N300201 (only the “Flex OBD-II asset tracker”), and NY N301862 (only the “Falcon GXT5002”) are classified under heading 9031, HTSUS, specifically subheading 9031.80.80, HTSUS, which provides for “[M]easuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter; profile projectors; parts and accessories thereof: other instruments, appliances and machines: other.” The applicable rate of duty is free.
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.
EFFECT ON OTHER RULINGS:
NY N304264, dated May 22, 2019, NY N213872, dated May 16, 2012, NY N108329, dated June 28, 2010, NY N300201, dated September 11, 2018, NY N301862, dated December 11, 2018, NY N201495, dated February 14, 2012, NY N108330, dated June 22, 2010, and NY N148555, dated March 3, 2011, are hereby REVOKED.
NY N168766, dated June 21, 2011, is hereby MODIFIED.
In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Craig T. Clark, Director
Commercial and Trade Facilitation Division
CC: Ms. Angela M. Santos
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt, LLP
399 Park Avenue, 25th Floor
New York, NY 10022-4877
Mr. Karl F. Krueger
Regulatory Compliance Consultant
Radix Group International/Dba DHL Global Forwarding
2660 20th Street
Port Huron, MI 48060
Brenda A. Jacobs
Sidley Austin LLP
1501 K Street, N.W.
Washington, D.C. 20005
Michael J. Femal
Much Shelist P.C.
191 N. Wacker Dr., Suite 1800
Chicago, IL 60004
Mr. John M. Walters
Crimson Informatics, Inc.
4435 Waterfront Drive, Suite 306
Glen Allen, VA 23060
Mr. Karl F. Krueger
Radix Group Int’l dba /DHL Global Forwarding
2660 20th Street
Port Huron, MI 48060
Mr. Michael Theodore
Livingston Consulting
1925-18 Avenue NE, Suite 320
Calgary, Alberta T2E 7T8
Canada
Mr. Karim W. Fournier
KF Logistics Inc.
480 S. Americas Ave., Suite B1-B2
El Paso, TX 79907