CLA-2 RR:CR:GC 965637 JAS
James S. O’Kelly
Barnes, Richardson & Colburn
475 Park Avenue South
New York, NY 10016
RE: Dedicated Robot Systems; HQ 962105 Modified
Dear Mr. O’Kelly:
In HQ 962105, issued to the Port Director, Milwaukee, on April 22, 1999, as a response to Internal Advice 16/98, initiated on behalf of ABB Flexible Automation, Inc., (ABB), certain industrial robot systems imported without end-of-arm tooling, among other articles, were held to be classifiable in headings 8479 and 8537, Harmonized Tariff Schedule of the United States (HTSUS), respectively.
Pursuant to section 625(c), Tariff Act of 1930 (19 U.S.C. 1625(c)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed modification of HQ 962105 was published on June 5, 2002, in the Customs Bulletin, Volume 36, Number 23. Four (4) comments, including one from you, were received in response to that notice. All favored Customs proposal. These comments are substantially in accordance with the discussion in this ruling under LAW AND ANALYSIS. The classification both of robot systems imported with end-of-arm tooling and work piece positioners expressed in I.A. 16/98 is not at issue here.
FACTS:
As described in HQ 962105, the merchandise consists of numerous industrial robot systems, each consisting of a robot imported with a model S4C controller. The robots each consist of an articulated structure, similar to an arm, on a base with drilled bolt holes for attachment to a fixed surface. They have lifting
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capacities or load ratings from 5 kilograms (11 lbs.) to 1,200 kilograms (2460 lbs.). The robots are imported without end-of-arm tooling which dedicates them to a specific end-use service application, such as arc welding, material handling, assembling, spraying, deburring and glueing/sealing, among others. The S4C controllers are devices which utilize preprogrammed software that contains specific operating instructions for the robot’s tooling. Each is stand-alone and floor mounted and is connected to its robot by power cables and signal connectors.
ISSUE:
Whether the robot systems, as described, imported without end-of-arm tooling, constitute functional units, incomplete or unfinished, under Section XVI, Note 4, HTSUS; whether any functional unit is eligible for classification in heading 8479, HTSUS.
The provisions under consideration are as follows:
8428 Other lifting, handling, loading or unloading machinery...
* * * *
8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in [chapter 84]...
* * * *
8515 ...magnetic pulse or plasma arc soldering, brazing or welding machines and apparatus, whether or not capable of cutting...
* * * *
8537 Boards, panels, consoles, desks, cabinets and other bases...for electric control or the distribution of electricity...:
LAW AND ANALYSIS:
Under General Rule of Interpretation (GRI) 1, Harmonized Tariff Schedule of the United States (HTSUS), goods are to be classified 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) in part extends the
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terms of a heading to include incomplete or unfinished articles provided that, at importation, they have the essential character of the complete or finished article.
Section XVI, Note 4, HTSUS, states that machines (including a combination of machines) consisting of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or other devices) intended to contribute together to a clearly defined function covered by one of the headings in chapters 84 or 85, then the whole falls to be classified in the heading appropriate to that function.
ABB originally contended that each robot system consisting of a robot and its process controller with task-specific software, imported without end-of-arm tooling, is not precluded from classification as a functional unit inasmuch as the components were intended to contribute together to a clearly defined function. Alternatively, ABB asserted that under GRI 3(b), HTSUS, each robot system is a composite good, and that the essential character of each is imparted by the process controller which dedicates the whole to the specific function performed by the end-of-arm tooling.
We rejected the first contention on the basis that “the classification of goods or apparatus as an incomplete or unfinished functional unit is not supported by any HTSUS legal note [or by the ENs].” However, we have undertaken a thorough review of the matter and now conclude that this is incorrect and no longer represents Customs position on this issue. By its terms, GRI 2(a), HTSUS, extends the scope of a 4-digit heading to include an article, whether assembled or unassembled, that is imported incomplete or unfinished. The imported article, however, must be found to have the essential character of the complete or unfinished good. Section XVI, Note 4, HTSUS, is the authority under GRI 1 for classifying a series of machines or components in a 4-digit heading describing a clearly defined function performed by the goods. Given the relationship between GRI 1 and GRI 2(a) in determining the scope of headings, it logically follows, in our opinion, that GRI 2(a) may also be applied to determine whether under GRI 1 a series of machines or components may qualify for classification under Section XVI, Note 4, even if imported incomplete or unfinished.
Under GRI 2(a), the factor or factors which determine essential character will vary with the goods. It may, for example, be determined by the nature of a component or components, their bulk, quantity, weight or value, or the role of a component or components in relation to the use of the good. It is the latter factor that is the most compelling in this case. The facts here establish that each articulated arm or
manipulator is permanently configured for a particular service application by an erasable programmable read-only memory (EPROM) chip installed in the controller. In addition, it is indicated that the manipulator dedicated for material handling, for example, has a particular load rating that is suitable only for that service application. There are no
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generic or general-purpose robot systems; each is specially configured to perform one specific function. Further, the end-of-arm tooling represents a rather small percentage
of the total value of the completed robot. Under the particular facts presented, we conclude that an importation consisting of an articulated arm or manipulator and process controller, in which the end use service application of the whole is clearly identifiable, represents the aggregate of distinctive component parts that establish the identity of the good as, for example, material handling machinery of heading 8428, HTSUS, or as electric welding machines or apparatus of heading 8515, HTSUS, etc.
This conclusion renders moot any issue of whether a robot system might be a composite good.
With respect to a robot system which, in accordance with this decision, would be classifiable as a functional unit, imported incomplete or unfinished, HQ 962105 stated on p. 5, “[W]e have consistently held that functional units cannot be classified in heading 8479, HTSUS, as that heading does not describe any machine by a clearly defined function.” This statement is incorrect and no longer represents Customs position on this issue. A fair and reasonable reading of Section XVI, Note 4, HTSUS, leads us to conclude that goods qualifying as functional units, incomplete or unfinished, are eligible for classification in heading 8479, HTSUS, provided it is the heading appropriate to the function performed by the whole, and the terms and conditions for classification in heading 8479 are satisfied.
HOLDING:
Under GRI 2(a) and Section XVI, Note 4, HTSUS, industrial robot systems, each consisting of a robot and a model S4C controller, the whole dedicated to a specific end use service application which is clearly identifiable, but imported without end-of-arm tooling, constitute functional units, classifiable in the heading appropriate to the function of the whole.
EFFECT ON OTHER RULINGS:
HQ 962105, dated, April 22, 1999, is modified to recognize both the tariff concept of incomplete or unfinished functional units, and the position that functional units are eligible for classification in heading 8479, HTSUS. In all cases, the preprogrammed software the S4C controller utilizes is classified in appropriate subheadings of heading 8524, in accordance with Chapter 85, Note 6, HTSUS.
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In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Acting Director
Commercial Rulings Division