CLA-2 CO:R:C:G 086553 CMS

Mr. John Montoya
Import/Export Specialist
Canon U.S.A., Inc.
One Canon Plaza
Lake Success, NY 11042-1113

RE: Integrated Telephone/Facsimile Machine/Personal Computer described as Canon "Navigator"

Dear Mr. Montoya,

Your request dated January 12, 1990, for a classification ruling on the Canon "Navigator" has been referred by the Regional Commissioner of Customs, New York to Customs Headquarters for a reply. Our ruling follows.

FACTS:

The merchandise consists of an integrated telephone/ facsimile machine/personal computer designated as the Canon "Navigator". The apparatus is comprised of a monitor, telephone handset and keyboard. The monitor incorporates a monochrome CRT display screen, facsimile input scanner and thermal output printer, and data processing components for the telephone/ facsimile/personal computer functions. The telephone handset is connected to the monitor by a cord; the cradle for the handset is situated on the front of the monitor to the left of the display screen. The display screen can be used as an input device when the user touches the screen in the place where a character associated with a certain command appears.

The telephone function works in conjunction with certain data processing operations. With the telephone directory feature the user can record up to 300 names and telephone numbers on a floppy disc. When the handset is lifted from its cradle a telephone directory menu appears on the display screen. The call is automatically dialed when the user touches the screen in the place where the name of the person to be called appears. The -2-

user can organize the telephone directory in business/personal categories or in other ways which suit the needs of the user. The Navigator functions as a telephone answering machine by storing up to 12 incoming messages ranging in length from 15 to 50 seconds. The stored messages can be accessed from an outside push-button phone or by touching the display screen at the appropriate place. The Navigator's telephone function features on-hook dialing, re-dialing, hold melody, and a wake-up feature with which the user can program the Navigator to call a particular person at a particular time.

The facsimile input feeder is situated on the top rear of the monitor. The user accesses the feeder by flipping up a panel on top of the monitor. The Navigator features document file direct sending. Facsimile copies of documents stored on a floppy disc can be transmitted to 100 different places at pre- programmed times. With the Navigator's "confidential transmission" feature, facsimile copies can be transmitted to the memory of a remote Navigator and the copy can only be displayed or printed when a security access code is input in the remote Navigator. The Navigator will automatically store incoming facsimile transmissions when the output printer runs out of paper. The facsimile function utilizes the same telephone directory and touch-screen input features as the telephone function.

The Navigator's personal computer function maintains IBM PC/XT personal computer compatibility to allow the use of existing software such as word processing, data base, spread sheet, scheduling and business graphics. Such software is not imported with the Navigator. The Navigator has a built-in "message board" feature which allows the user to communicate with other Navigator operators regarding telephone or other messages. The Navigator's built-in "memo pad" feature allows limited word processing of memos. The personal computer function can be used with a user-friendly touch-screen input, and a digital clock can be called up on the screen.

The Navigator's telephone/facsimile/personal computer functions can be used simultaneously. While on the telephone a user can send a facsimile transmission. The user does not have to exit a personal computer program during telephone or facsimile operation.

ISSUE:

Is the Navigator classified as a data processing machine in Heading 8471, as a telephone apparatus in Heading 8517 or as a facsimile apparatus in Heading 8517?

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LAW AND ANALYSIS:

The Navigator is a Section XVI Note 3 composite machine. The General Explanatory Notes to Section XVI, p. 1133, provide that composite machines which consecutively or simultaneously perform separate functions which are generally complementary are classified according to the machine's principal function. The Navigator is not classifiable according to the principal physical component (i.e., monitor, handset, keyboard), but falls in the heading which describes its principal function.

Because the personal computer function is principally based on data processing operations, and certain data processing operations are also associated with the telephone/facsimile functions (e.g., programmable telephone directory, delayed transmission), it might appear that data processing is the principal function of the Navigator. However, the particular data processing operations associated with the telephone/ facsimile functions would be attributed to those functions for classification purposes. Chapter 84 Note 5 in pertinent part provides that "Heading 8471 does not cover machines incorporating or working in conjunction with an automatic data processing machine and performing a specific function. Such machines are classified in the headings appropriate to their respective functions...". The particular data processing operations associated with the telephone/facsimile functions are performed by components which are incorporated in the Navigator's monitor and would not be considered as separate articles for classification purposes. The personal computer function would thus encompass personal computer uses (e.g., data base, word processing, scheduling, business graphics), but would not include the particular data processing operations associated with the telephone/facsimile functions (e.g., telephone directory, delayed transmission); these particular operations would be attributed to the telephone/facsimile functions when determining the principal function of the Navigator.

The degree of physical and functional integration of the Navigator's telephone/facsimile/personal computer functions makes it difficult to isolate one of the functions and identify it as the principal function. Many of the Navigator's components are used in all three functions. The display screen is used as an input/output device for all three functions. The keyboard is used as an additional input device for all functions. The electronic components of the telephone/facsimile functions are incorporated in the Navigator's motherboard along with the personal computer components. The Navigator's CPU is used in all three functions.

The Navigator's telephone/facsimile/personal computer functions are not just physically integrated; they are -4-

complementary functions which can be used with each other. A facsimile transmission can be made directly from the Navigator's memory on which documents or graphics processed with the personal computer are stored. The user can make or receive a telephone call without exiting the computer program being used. At the same time a facsimile transmission is being sent or received the user can conduct a telephone conversation with the sender or receiver to discuss the document or alert them that a facsimile transmission is underway.

The Navigator is marketed as an integrated office machine and no one of the three complementary functions is significantly emphasized over the others. The statement on the cover of the product brochure submitted by the importer reads: "Canon NAVIGATOR":"Multiform Integration":"Integrated Telephone/FAX/PC efficiency is just a touch away". The statement on the second page of the brochure reads: "Which is the most valuable office tool? A) The Telephone B) The Facsimile Machine C) The Personal Computer D) All of the above The Answer: D) All of the above".

The Navigator's telephone/facsimile/personal computer functions are complementary under the Section XVI Explanatory Notes, p. 1133. The telephone/facsimile functions utilize data processing operations and are similar to the personal computer function in terms of complexity and functional sophistication. Designating one of the functions as the principal function would result in the other two functions falling as subordinate functions; the three functions are physically and functionally integrated to an extent that it is not possible to single out a single function and identify it as the principal function.

The Navigator cannot be classified according to the terms of the headings and the relative section or chapter notes and thus is not classified under GRI 1. GRI 2 is inapplicable. The Navigator cannot be classified according to the relative specificity provision of GRI 3(a) because all applicable headings describe only part of the article and are thus considered equally specific.

The merchandise cannot be classified as a GRI 3(b) composite good consisting of different components because the single component which gives the Navigator its essential character cannot be determined. Under the terms of the GRI's, goods which cannot be classified according to GRI's 1 through 3(b) are classified under GRI 3(c). (The General Explanatory Notes to -5-

Section XVI, p. 1133 provide that where it is not possible to determine the principal function of a Section XVI composite good, it is necessary to apply GRI 3(c)).

It is not often that the classification of merchandise is determined by a GRI other than GRI 1 through 3(b). Under the facts particular to the Navigator, however, no single function can be determined to be the principal function and no single component gives the article its essential character. Under GRI 3(c), the merchandise is classified under the heading which occurs last in numerical order among those which equally merit consideration. Of these provisions, Heading 8517 is last in numerical order. The Navigator is classified as telegraphic apparatus in subheading 8517.82.00, which is the last subheading among the subheadings within Heading 8517 that equally merit consideration. Although the Navigator incorporates a digital clock which is displayed on the CRT display, the Navigator is not classified as a clock in Heading 9105 because the clock function is subordinate to the telephone/facsimile/personal computer functions and thus Heading 9105 does not equally merit consideration with Headings 8471 or 8517.

HOLDING:

The Canon Navigator is classified as telegraphic apparatus in subheading 8517.82.00, HTSUSA.

Sincerely,

Jerry Laderberg
Acting Director
Commercial Rulings Division