CLA-2 CO:R:C:M 951713 DWS
Michael P. Maxwell, Esq.
Suite 250
10100 Santa Monica Boulevard
Los Angeles, CA 90067
RE: Component Parts for Automatic Data Processing Machines;
Printed Circuit Boards; CPUs; Chapter 84, Note 5(A)(a);
HQ 950922; HQ 951443; HQ 950672; HQ 951065; Essential
Character; GRI 2(a); Explanatory Notes (V) and (VIII),
GRI 2(a); Unassembled Digital Processing Unit
Dear Mr. Maxwell:
This is in response to your letters of April 21, 1992, and
June 18, 1992, written on behalf of AST Research, Inc., concerning
the classification of component parts for automatic data processing
(ADP) units under the Harmonized Tariff Schedule of the United
States (HTSUS).
FACTS:
The subject merchandise consists of various component parts
for automatic data processing units, including printed circuit
boards both with and without central processing units (CPUs). It
is claimed that the components are imported for inventory purposes.
ISSUE:
Whether, for classification purposes, the subject merchandise
imparts the essential character of finished digital processing
units under the HTSUS?
LAW AND ANALYSIS:
Classification of merchandise under the HTSUS is in accordance
with the General Rules of Interpretation (GRI's), taken in order.
GRI 1 provides that classification is determined according to the
terms of the headings and any relative section or chapter notes.
It is claimed that the printed circuit boards with CPUs are
classifiable as unfinished Digital processing units under
subheading 8471.91.00, which provides for: "[a]utomatic data
processing machines and units thereof: [o]ther: [d]igital
processing units, whether or not entered with the rest of a system,
which may contain in the same housing one or two of the following
types of units: storage units, input units, output units." It is
also claimed that the rest of the components, including the printed
circuit boards without CPUs, are classifiable under subheading
8473.30.40, HTSUS, which provides for: "[p]arts and accessories
suitable for use solely or principally with machines of headings
8469 to 8472: [p]arts and accessories of the machines of heading
8471: [n]ot incorporating a cathode ray tube."
Chapter 84, Note 5(A)(a), HTSUS, states that:
(A) For purposes of heading 8471, the expression "automatic
data processing machines" means:
(a) Digital machines, capable of (1) storing the processing
program or programs and at least the data immediately
necessary for execution of the program; (2) being freely
programmed in accordance with the requirements of the
user; (3) performing arithmetical computations specified
by the user; and, (4) executing, without human
intervention, a processing program which requires them
to modify their execution, by logical decision during
the processing run.
GRI 2(a) provides that:
[a]ny 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.
In HQ 950221, dated November 22, 1991, it was held that
"'[m]otherboards' for ADP systems have been consistently deemed to
possess the essential character of an ADP processing unit.
Therefore, the 'motherboard' containing a CPU is properly
classifiable under subheading 8471.91.00, HTSUS . . . " Also in
that ruling, it was held that a motherboard, imported without a CPU
unit, did not have the essential character of a finished ADP
processing unit. See HQ 950672, dated February 20, 1992, and
HQ 951443, dated April 13, 1992.
Therefore, under HQ 950221, it is our position that the
printed circuit boards with CPU units are classifiable under
subheading 8471.91.00, HTSUS, and the printed circuit boards
without CPU units are classifiable as parts under subheading
8473.30.40, HTSUS.
There is no question that the rest of the components are
imported for inventory purposes and do not impart the essential
character of finished ADP processing units.
In understanding the language of the HTSUS, the Harmonized
Commodity Description and Coding System Explanatory Notes may be
utilized. The Explanatory Notes, although not dispositive, are to
be used to determine the proper interpretation of the HTSUS. 54
Fed. Reg. 35127, 35128 (August 23, 1989). Explanatory Notes (V)
and (VII), GRI 2(a) (p. 2), HTSUS, state that:
(V) The second part of Rule 2(a) provides that complete or
finished articles presented unassembled or
disassembled are to be classified in the same heading
as the assembled article. When goods are so
presented, it is usually for reasons such as
requirements or convenience of packing, handling or
transport.
(VII) For the purposes of this Rule, "articles presented
unassembled or disassembled" means articles the
components of which are to be assembled either by
means of simple fixing devices (screws, nuts, bolts,
etc.) or by riveting or welding, for example, provided
only simple assembly operations are involved.
First, the subject component parts were not shipped
unassembled for convenience of packing, handling, or transport, but
as inventory for a manufacturing operation. Second, the creation
of the computers in the United States is not a simple assembly
operation. Complex operations are performed in the United States
after importation. See HQ 951065, dated February 21, 1992.
Therefore, under the Explanatory Notes to GRI 2(a), the
component parts are clearly not unassembled digital processing
units for classification purposes.
HOLDING:
The printed circuit boards with CPU units are classifiable
under subheading 8471.91.00, HTSUS. The general, column one rate
of duty is 3.9 percent ad valorem.
The rest of the components, including the printed circuit
boards without CPU units, are classifiable under subheading
8473.30.40, HTSUS. Merchandise classifiable under this provision
receives duty free treatment.
Sincerely,
John Durant, Director