CLA-2 OT: RR: CTF: TCM H254873 DSR
Port Director, Los Angeles International Airport
U.S. Customs and Border Protection
11099 South La Cienega Blvd.
Los Angeles, CA 90045
Attn: Mary Jean Baca, Supervisory Import Specialist
Re: Application for Further Review of Protest No. 2720-14-100148; tariff classification of “NetCam” HD cameras
Dear Port Director:
This is in response to the Application for Further Review (AFR) of Protest No. 2720-14-100148 filed on February 13, 2014, on behalf of the importer, Belkin International, Inc. (Protestant), contesting U.S. Customs and Border Protection’s (CBP) classification and liquidation of a camera under the Harmonized Tariff Schedule of the United States (HTSUS). We have also considered arguments made during a teleconference with my staff on August 11, 2016. Our response follows.
FACTS:
Protestant made thirty-six (36) entries of the subject camera between October 2, 2012 and June 20, 2013. The entries were liquidated between August 23, 2014, and February 7, 2014. The protest was timely filed on February 13, 2014.
The subject camera is identified as the “Belkin Netcam HD.” It streams hi-definition (“HD”) video and digital audio from its location to remote devices such as smartphones, tablets and computers. The camera itself cannot record video, still images or audio to either its internal memory, or directly to semiconductor media that is either inserted into it or connected to it. In order for a remote mobile device to receive live stream video and audio from the camera, that mobile device must contain a downloadable mobile application (“app”). The app also allows a user to save “snapshot” and video from the live stream to the “cloud” or to the physical memory of the mobile device or computer. Additionally, the app can be used to set up the camera, adjust camera settings such as camera sharing, email alerts, and camera status, as well as adjust general settings such as auto-sign in and password resets.
CBP liquidated the cameras in subheading 8525.80.30, HTSUS, which provides for “Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; Television cameras, digital cameras and video camera recorders: Television cameras: Other.” Protestant asserts that the camera is instead classified in subheading 8525.80.40, HTSUS, which provides for “Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; Television cameras, digital cameras and video camera recorders: Digital still image video cameras.”
ISSUE:
What is the proper classification under the HTSUS of the subject camera?
LAW AND ANALYSIS:
Initially, we note that the matter is protestable under 19 U.S.C. §1514(a)(2) as a decision on a classification. The protest was timely filed, within 180 days of liquidation of the first entry for entries made on or after December 18, 2004. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub. L. 108-429, §2103 (2)(B)(ii), (iii)(codified as amended at 19 U.S.C. §1514(c) (3)(2006)).
Further Review of Protest No. 2720-14-100148 was properly accorded to the Protestant pursuant to 19 C.F.R. § 174.24(c), to the extent that this Protest involves questions of fact that have not been ruled upon by the Commissioner of CBP or any CBP Headquarters official, or by the Customs courts: specifically the proper classification of the subject camera in light of the Court of International Trade’s decision in Sony Electronics, Inc., v. United States, 35 Int’l Trade Rep. (BNA) 2395 (Ct. Int’l Trade Dec. 23, 2013).
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.
The relevant (2012 and 2013) HTSUS provisions are as follows:
8525 Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras, digital cameras and video camera recorders:
* * *
8525.80 Television cameras, digital cameras and video camera recorders:
Television cameras
* * *
8525.80.30 Other
* * *
8525.80.40 Digital still image video cameras
* * *
8525.80.50 Other
* * * *
Because the classification of the subject cameras involves an analysis beyond the four-digit heading level, GRI 6 is implicated. GRI 6 states:
For legal purposes, the classification of goods in the subheading of a heading shall be determined according to the terms of those subheadings and any related subheading notes, and mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter, and subchapter notes also apply, unless the context otherwise requires.
The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are generally indicative of the proper interpretation of the heading. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The EN to 85.25, subsection (B), provides for Television Cameras, Digital Cameras and Video Camera Recorders. Therein it states:
This group covers cameras that capture images and convert them into an electronic signal that is:
Transmitted as a video image to a location outside the camera for viewing or remote recording (i.e., television cameras); or
Recorded in the camera as a still image or as a motion picture (i.e., digital cameras and video camera recorders).
***
Television cameras … [include] (e.g., television cameras for television studios or for reporting, those used for industrial or scientific purposes, in closed circuit television (surveillance) or for supervising traffic). [Emphasis in original] These cameras do not have any inbuilt capability of recording images. [Emphasis added]
***
In digital cameras and video camera recorders, images are recorded onto an internal storage device or onto media (e.g., magnetic tape, optical media, semiconductor media or other media of heading 85.23). They may include an analogue/digital converter (ADC) and an output terminal which provides the means to send images to units of automatic data processing machines, printers, televisions or other viewing machines…
In Sony Electronics, Inc., v. United States, 35 Int’l Trade Rep. (BNA) 2395 (Ct. Int’l Trade Dec. 23, 2013), the CIT held that the proper classification of the Sony “NSC-GCI Net-Sharing Cam” is in subheading 8525.80.40, HTSUS (2007), as a “digital still image video camera.” The Sony camera was a “Handycam,” (e.g. handheld) personal device capable of capturing still images at five different resolutions and moving images (video) at two resolutions at several different frames per second rates. The camera recorded the images digitally, saving still images in .jpg format and moving images in .mp4 format. Later, the user could plug the Handycam into a personal computer (PC) via a universal serial bus (USB) cable and select which photos or video the user sought to download onto a computer or upload on the web. Additionally, the NSC-GC1 had 2MB of user accessible internal memory to store small amounts images or moving images, and was also designed to incorporate a removable flash memory stick (sold separately) for the storage of more than small numbers of still images or short durations of moving images. In other words, the Sony camera had internal storage for the images prior to their being downloaded onto a computer or uploaded onto the web.
The subject camera, however, captures images in “real time” and transmits the images to a location outside the camera for viewing or remote recording. There is no inbuilt recording or storage capacity. Protestant argues the “cloud” refers to semiconductor media and that recording onto the “cloud” is actually recording onto semiconductor media. Therefore, according to Protestant, the “cloud” is allowed “as an acceptable method of storage given the explanatory note.” We disagree. Protestant ignores that the instant camera is incapable of “recording” in its condition as imported. United States v. Citroen, 223 U.S. 407, 32 S. Ct. 259, 56 L. Ed. 486 (1911). The camera is designed to transmit video to an external location or device, where that video is remotely viewed in real time, or stored for later viewing as video or as extracted still images. It is not the camera that performs the recording function but, rather, the external device (via a mobile or web-based app) or the server upon which the “cloud” is based. Furthermore, the instant camera does not capture still images at all. Rather, the app allows the user to save a still image from the received video stream. Hence, the camera is unlike the camera in Sony, which had the ability to capture both moving and still images.
With regard to Protestant’s assertion that the camera must transmit images to televisions or automatic data processing machines (“ADPs”) in order for it to be considered a “television camera” of subheading 8525.80.30, the tariff does not require such a restrictive reading, and neither CBP nor the courts have interpreted subheading 8525.80.30, HTSUS, as requiring such a reading. As discussed supra, the central issue is whether the camera can record video and still images. CBP has consistently classified cameras that capture video images in real time, which are transmitted to locations outside the camera for viewing, as television-type cameras of subheading 8525.80.30, HTSUS. See HQ H237590, dated July 9, 2015 (classifying a camera without any inbuilt recording capability and that transmits a video feed to an external monitor for viewing or remote recording in subheading 8525.80.30, HTSUS); NY N245636, dated September 24, 2013 (classifying the “Freeway CAM Digital License Plate Recognition Camera,” which captures real-time moving images and transmits them to a location outside the camera for viewing and recording and does not have any inbuilt recording capability, in subheading 8525.80.30, HTSUS); NY N078845, dated November 3, 2009 (classifying a mobile surveillance system with a controllable digital camera that recorded images in real time but which were displayed at a remote site or recorded through a digital video recorder (DVR) but no built-in recording capability in subheading 8525.80.30, HTSUS); HQ 966172, dated June 4, 2003, (the capability of buffering (temporarily storing) still images, in sequential order to transmit them from the camera to an ADP (automatic data processing) machine, was not internally recording those images in the capacity of a digital still image video camera); NY N232616, dated September 13, 2012 (classifying a television-type camera that captured images of internal pipelines in real time and transmitted them to a location outside the camera for remote viewing and recording, with no inbuilt video recording capability in subheading 8525.80.30, HTSUS); NY N007771, dated March 19, 2007 (classifying a camera used for surveillance/security purposes in subheading 8525.80.30, HTSUS because it captured live images in real time for transmission to a video monitor. This camera had NTSC [television] signal capability, but no storage or recording capability).
Finally, with regard to Protestant’s reference to the relevance of NY N029087 (June 4, 2008), we note that the ruling does not contradict the above analysis, nor does it run counter to the holding of Sony. It correctly classifies a camera that has no recording capability in a subheading other than subheading 8525.80.40, HTSUS.
HOLDING:
By application of GRI 6, the camera at issue is classifiable in heading 8525, HTSUS, and is specifically provided for in 8525.80.30, HTSUS, as “Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras, digital cameras and video camera recorders: Television cameras, digital cameras and video camera recorders: Television cameras: Other.” The general, column one duty rate is 2.1% ad valorem.
Since the rate of duty under the classification indicated above is the same as the liquidated rate, you are instructed to DENY the protest, pursuant to the above analysis.
A copy of this ruling should be attached to the CBP Form 19 and provided to the protestant as part of the notice of action on the protest. Any re-liquidation of the entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision the Office of International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the U.S. Customs and Border Protection Home Page at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division