CLA-2 RR:CR:GC 964874TPB
Donald L. Fischer
PriceWaterhouse Coopers LLP
333 Market Street
San Francisco, CA 94105
RE: Optical Repeaters
Dear Mr. Fischer:
This is in response to your letter dated September 22, 1999, to the Director, National Commodity Specialist Division, New York, on behalf of Southern Cross Cables, Ltd. (“Southern Cross”), requesting classification of Fibre Optic Cables and Optical Repeaters under the Harmonized Tariff Schedule of the United States (“HTSUS”). Your request was forwarded to this office for consideration. On February 26, 2001, you confirmed Southern Cross’s decision to bifurcate your initial request and be issued two separate rulings. On April 3, 2001, Customs issued Headquarters Ruling Letter (“HRL”) 963213, classifying Southern Cross’s Fibre Optic Cable under subheading 8544.70.00, HTSUS. The present ruling pertains to the classification of the Optical Repeaters. In making this determination, we have taken into account arguments presented at a conference that was held with you on August 8, 2002, as well as supplemental information submitted on August 26, 2002. We regret the delay in responding.
FACTS:
The merchandise at issue are optical repeaters used in long-haul telecommunications systems. The repeater is a sealed, high-pressure, water resistant housing that is suitable for installation on the sea bed at a depth of up to 8,000 meters and is ready for splicing onto submarine cable. Repeaters are located approximately every 73 kilometers along the submarine cable route. Encased within the repeaters are several electrical and optical devices. Among these devices are an active amplifier
mounted onto “gain control supervisory circuits,” whose electronics contain all of the required firmware, software and integrated circuit (“IC”) chips by which the circuit pack operates. There is also a communications card, which serves as the key internal performance monitoring device.
The active amplifier portion of the circuit pack consists of the passive section plus the pump lasers and diodes. The pump lasers provide the energy to the passive section in order to amplify the telecommunication signal in the C-band portion of the telecommunication band. These pump lasers are mounted on to a printed circuit assembly (“PCA”). The dimensions of the pump laser printed circuit board are 3.5 inches by 6 inches.
The dimensions of the passive section are 7.25 inches by 7.25 inches. The passive amplifier portion contains the isolators, couplers, taps and mux devices for routing the telecommunication signal through the amplifier. There are no IC chips on this portion.
The repeaters operation is described as follows:
As a telecommunication signal is introduced into the amplifier, it enters the coupler (a small tube) which splits the signal into two: one part of the signal is directed to a photodiode, which lets the amplifier know that a signal is being received; the other to an isolator, which preserves the signal for onward transmission.
From the isolator, the signal passes through the erbium doped fiber (“EDF”). The signal is boosted as it passes through the EDF. The EDF, which can be from 3m to 30m long, consists of optical fiber doped with erbium. As the signal continues through the EDF, laser light from a “pump” laser excites the erbium ions, which are then stimulated by the incoming signal to release their stored energy. The pump lights one and only purpose is to excite the erbium.
The “excited” particles release or transfer their energy to the incoming signal by relaxing or becoming de-excited. As the incoming signal induces the relaxation, the transfer of energy is synchronized to that of the incoming signal, resulting in an increase or power boost of the signal data. The signal continues through the length of the EDF where the process is repeated continuously. Thus, as the signal continues through the fiber, the signal grows stronger….
Once amplified, the signal enters a multiplexing component within the amplifier which guards against unwelcome signals or noise as the signal leaves the amplifier and isolates a portion of the signal to control the amplifier output power level. The module operates from power fed through the cable from the land based terminal stations.
The subject optical amplifier module… contains a coupler; pump laser; erbium doped fiber; and a multiplexer….
To summarize, the optical repeater used in a long-haul digital line system is a device that contains several components, including pump lasers, diodes’ erbium doped fibers, line cards, and communications cards. The repeaters meet all Telecommunications Industry of America (“TIA”) and Telcordia standards.
ISSUE:
What is the classification of the optical repeaters?
LAW AND ANALYSIS:
Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1 states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6. GRI 2(a) states in part that incomplete or unfinished articles are to be classified as complete or finished if, as imported, they have the essential character of the complete or finished article. GRI 6 permits the comparison of same-level subheadings within the same heading, in part by application of Rules 1 through 5, applied by appropriate substitution of terms.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While not legally binding, the ENs provide a commentary on the scope of each heading of the Harmonized System and are thus useful in ascertaining the classification of merchandise under the HTSUS. Customs believes the ENs should always be consulted. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989).
The HTSUS headings under consideration are as follows:
Section XVI, note 1(m), HTSUS, provides, in pertinent part, as follows:
This section does not cover:
…
(m) Articles of chapter 90;
…
Electrical apparatus for line telephony or line telegraphy, including line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones; parts thereof:
Liquid crystal devices not constituting articles provided for more specifically in other headings; lasers, other than laser diodes; other optical appliances and instruments, not specified or included elsewhere in this chapter; parts and accessories thereof:
The ENs for 85.17 read, in pertinent part, as follows:
APPARATUS FOR CARRIER-CURRENT LINE SYSTEMS OR FOR DIGITAL LINE SYSTEMS
These systems are based on the modulation of… a light beam by… digital signals. …. These systems are used for the transmission of all kinds of information (words, data, images, etc.)
These systems include all categories of multiplexers and related line equipment for metal or optical-fibre cables.
The optical repeaters are finished devices that are ready for splicing onto submarine cable at the time of their importation. Heading 8517, HTSUS, captures goods principally used for digital line system transmission.
As demonstrated in our meeting of August 8, 2002, the optical repeaters are used exclusively with long-haul digital telecommunication equipment. The repeaters house the apparatus necessary for the amplification of light signals traveling through the spliced fiber optic cables. This apparatus includes an erbium doped fiber amplifier, a laser diode module with a monitor PIN diode (laser pump), gain control and level control, monitor photodiode, Wavelength Division Multiplexer (“WDM”) coupler, monitor coupler and optical isolator.
Although the repeaters contain optical appliances and instruments, they are only part of the apparatus, while the terms of heading 8517, HTSUS, capture the product in its entirety at the time of importation. As a result, heading 9013, HTSUS, is not reached because the repeaters are specifically provided for in heading 8517, as apparatus for digital line systems.
HOLDING:
By application of GRI 1, for the reasons stated above, the optical repeaters are classified under subheading 8517.50.9000, HTSUS, which provides for: “Electrical apparatus for line telephony or line telegraphy, including line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones; parts thereof: Other apparatus, for carrier-current line systems or for digital line systems: Other: Telegraphic: Other.”
Sincerely,
Myles B. Harmon, Acting Director
Commercial Rulings Division