CLA-2 CO:R:C:M 088595 MBR
District Director
U.S. Customs Service
111 West Huron St.
Buffalo, New York 14202
RE: Internal Advice 4/91; Burglar and Fire Alarm Systems;
Unfinished; Essential Character; Control Panel
Dear Sir:
This is our response regarding Internal Advice request 4/91,
on behalf of Harman Security Products, regarding the
classification of electronic "burglar alarm control panels"
("basic alarm systems"), under the Harmonized Tariff Schedule of
the United States Annotated (HTSUSA).
FACTS:
The merchandise that is the subject of IA 4/91 is described
on the invoices as "electronic burglar alarm control panels."
This description was intended to include nine different models,
which are described as: PC 1000, PC 1500, PC 1550, PC 2500, PC
2530, PC 2550, PC 3000, TC 5000, and CP 5ML. The entries also
include variations of several of these models.
The "electronic burglar alarm control panels" are now
described by the importer's counsel as "basic alarm systems."
This basic alarm system includes a control unit and a remote
keypad. The two items are packaged together for shipment. These
two items form a basic alarm system for residential, retail, and
office installations. When installed on site, the control unit
is mounted on a wall out of sight, generally in a closet or in
the basement. The keypad is then mounted in a convenient
location inside the protected premises close to an entry/exit
point. The keypad is connected to the control unit using a four
conductor cable. Although the basic system is shipped with only
one keypad, as many as five keypads (depending on the model) may
be connected to the control unit.
-2-
The remote keypad unit consists of a case containing the
keypad buttons, a built-in sounder, and a multi-functional LED
indicator panel.
The control unit consists of a metal cabinet housing a
printed circuit board, fuses, EEPROM memory, and the power supply
for the system. The circuit board contains: (a) a built-in
digital communicator which connects to a telephone line and
transmits alarm signals and system status information to a remote
monitoring station; (b) the system circuitry which operates the
internal timers, accepts input from the keypad and other remote
sensors, and stores the programming information for controlling
the signalling mechanisms in the keypad, the digital
communicator, and other remote warning devices; and (c) circuitry
for operating a siren or bell. The siren or bell is not included
in the basic system.
The keypad and control unit perform the following four basic
functions even without the addition of auxiliary sensors or
alarms: manual emergency alarm signalling, monitoring and display
of the system's status and condition, programming, and control.
Twenty percent of the importations at issue are "Intro"
models which are shipped with one or more DI-50 motion detectors.
The DI-50 is a passive infrared motion detector which detects
movement by measuring changes in the background radiation of a
protected zone.
The affected entries also include nine hundred models
identified as "PC 1000 ND" (out of a total of 20,160) systems,
which were shipped without built-in digital communicators.
Six hundred and forty-two of the systems were imported
without remote keypads. These systems are designated "NK."
ISSUE:
What are the classifications of the "electronic burglar
alarm control panels" consisting of nine different models,
described as: PC 1000, PC 1500, PC 1550, PC 2500, PC 2530, PC
2550, PC 3000, TC 5000, and CP 5ML, under the Harmonized Tariff
Schedule of the United States Annotated (HTSUSA)?
LAW AND ANALYSIS:
The General Rules of Interpretation (GRIs) to the HTSUSA
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...
-3-
The alarm system components are prima facie classifiable
under the following headings/subheadings:
8531 Electric sound or visual signalling apparatus (for
example, bells, sirens, indicator panels, burglar or
fire alarms), other than those of heading 8512 or 8530;
parts thereof:
* * * * * * * * * * * * *
8531.10.00 Burglar or fire alarms and similar apparatus.
* * * * * * * * * * * * *
8531.20.00 Indicator panels incorporating liquid crystal
devices (LCD's) or light emitting diodes
(LED's)
* * * * * * * * * * * * *
8531.90.00 Parts
* * * * * * * * * * * * *
8537 Boards, panels (including numerical control panels),
consoles, desks, cabinets and other bases equipped with
two or more apparatus of heading 8535 or 8536, for
electric control or the distribution of electricity,
including those incorporating instruments or apparatus
of chapter 90, other than switching apparatus of
heading 8517:
* * * * * * * * * * * * *
8537.10.00 For a voltage not exceeding 1,000 v
In HQ 086460 (July 18, 1990), we addressed the
classification of the central components of a burglar alarm
system. We stated:
In HQ Ruling 071612 (July 25, 1985), the central components
of a burglar alarm system were entered without the remote
sensors, bells and sirens. Various indicator light panels
were incorporated in the front of each component. The
merchandise was found to be "more than" control panels and
was classified as burglar alarms and parts thereof in item
685.70. HQ Ruling 071612 found that the articles were more
than control panels because they incorporated a substantial
proportion of the operating part of the machine controlled,
and in fact were the very essence of the burglar alarm
systems.
-4-
Like the burglar alarm components in HQ Ruling 071612,
the fire alarm components under consideration incorporate a
substantial proportion of the operating part of the machine
controlled. The articles incorporate the power supply for
the remote sensors and alarms controlled. The central
cabinets of all three models incorporate indicator light
panels. The Basic Integrated System includes an amplifier
which provides a speaker source for various alarm messages.
The Basic Multiplex System incorporates a Serial Link
Controller which interfaces the system's CPU and emergency
Satellite communicator (ESAC).
We held that the Edwards 8500 series fire alarm systems,
when entered without the remote sensors and sound signalling
apparatus, were classified as "[b]ells, sirens, indicator panels,
burglar and fire alarms...and parts thereof" in item 685.70,
TSUS.
Furthermore, in HQ 088464, we addressed the scope of heading
8537. Heading 8537, HTSUSA, provides for "[b]oards, panels . . .
consoles, desks, cabinets and other bases, equipped with two or
more apparatus of heading 8535 or 8536, for electric control or
the distribution of electricity . . ." In HQ 088464, we held
that the "Microselect system" did not satisfy this description.
We stated:
It is not used merely for the electric control or the
distribution of electricity. As discussed above, the system
is used to perform multiple tasks described in heading 8471,
HTSUSA. Accordingly, the subject system does not satisfy
the terms of this heading and is not properly classifiable
therein.
In the instant case, the "basic alarm system" consists of a
remote keypad and a control unit. The remote keypad unit
consists of a case containing the keypad buttons, a built-in
sounder, and a multi-functional LED indicator panel.
The control unit consists of a metal cabinet housing a
printed circuit board, fuses, EEPROM memory, and the power supply
for the system. The circuit board contains: (a) a built-in
digital communicator which connects to a telephone line and
transmits alarm signals and system status information to a remote
monitoring station; (b) the system circuitry which operates the
internal timers, accepts input from the keypad and other remote
sensors, and stores the programming information for controlling
the signalling mechanisms in the keypad, the digital
communicator, and other remote warning devices; and (c) circuitry
for operating a siren or bell.
-5-
The Harmonized Commodity Description and Coding System
Explanatory Notes (ENs) to heading 8573, HTSUSA, page 1391,
describe: "Programmable controllers" which are digital apparatus
using a programmable memory for the storage of instructions for
implementing specific functions such as logic, sequencing,
timing, counting and arithmetic, to control, through digital or
analog input/output modules, various types of machines."
However, as in HQ 088464, the instant merchandise is not
merely a programmable controller. In its condition at
importation, the "basic alarm system" is capable of performing
manual alarm functions, contains a digital communicator which
connects to a telephone line and transmits alarm signals and
system status information to a remote monitoring station, and
contains a remote keypad unit which consists of a case containing
the keypad buttons, a built-in sounder, and a multi-functional
LED indicator panel.
GRI 2(a) provides direction here. It states:
2. (a) Any reference in a heading to an article shall be
taken to include a reference to that article
incomplete or unfinished, provided that, as
entered, the incomplete or unfinished article has
the essential character of the complete or
finished article. It shall also include a
reference to that article complete or finished (or
falling to be classified as complete or finished
by virtue of this rule), entered unassembled or
disassembled.
The Section XVI, chapter 85 (includes heading 8537, HTSUSA),
General Notes further elaborate when they state the following,
ENs page 1132:
(IV) Incomplete Machines
Throughout the section any reference to a machine or
apparatus covers not only the complete machine, but also an
incomplete machine (i.e., an assembly of parts so far
advanced that it already has the main essential features of
the complete machine). Thus a machine lacking only a
flywheel, a bed plate, calendar rolls, tool holders, etc.,
is classified in the same heading as the machine, and not in
any separate heading providing for parts. Similarly a
machine or apparatus normally incorporating an electric
motor (e.g., electro-mechanical hand tools of heading 85.08)
is classified in the same heading as the corresponding
complete machine even if presented without that motor.
-6-
Thus, it is Customs position that the "basic alarm systems"
(inappropriately invoiced as "electronic burglar alarm control
panels") and the "intro" systems meet the terms of subheading
8531.10.00, HTSUSA, which provides for: "[b]urglar or fire alarms
and similar apparatus." It is further Customs position that the
incomplete or unfinished articles (the "PC 1000 ND" which were
shipped without built-in digital communicators) have the
essential character of the complete or finished articles,
provided for in subheading 8531.10.00, HTSUSA.
The remote keypad unit consists of a case containing the
keypad buttons, a built-in sounder, and a multi-functional LED
indicator panel. The remote keypad incorporates substantial and
essential features to the alarm systems. Therefore, the units
designated as "NK," which are imported without the remote
keypads, do not impart the essential character of the complete or
finished article. Therefore, they are properly classifiable
under subheading 8531.90.00, HTSUSA, which provides for:
"[e]lectric sound or visual signalling apparatus (for example,
bells, sirens, indicator panels, burglar or fire alarms)...:
[p]arts."
HOLDING:
The "basic alarm systems" (inappropriately invoiced as
"electronic burglar alarm control panels") and the "intro"
systems meet the terms of subheading 8531.10.00, HTSUSA, which
provides for: "[b]urglar or fire alarms and similar apparatus."
The rate of duty is 2.7% ad valorem. The rate of duty is Free if
all of the requirements of the United States - Canada Free Trade
Agreement are met.
The incomplete or unfinished articles (the "PC 1000 ND"
which were shipped without built-in digital communicators) have
the essential character of the complete or finished articles,
provided for in subheading 8531.10.00, HTSUSA. The rate of duty
is 2.7% ad valorem. The rate of duty is Free if all of the
requirements of the United States - Canada Free Trade Agreement
are met.
The units designated as "NK," which are imported without the
remote keypads, do not impart the essential character of the
complete or finished article. Therefore, they are properly
classifiable under subheading 8531.90.00, HTSUSA, which provides
for: "[e]lectric sound or visual signalling apparatus (for
example, bells, sirens, indicator panels, burglar or fire
alarms)...: [p]arts." The rate of duty is 2.7% ad valorem. The
rate of duty is Free if all of the requirements of the United
States - Canada Free Trade Agreement are met.
-7-
You should advise the Internal Advice applicant of this
decision.
Sincerely,
John Durant, Director
Commercial Rulings Division