CLA-2 OT:RR:CTF:EMAIN H302169 SKK
Ms. Sarah M. Nappi
Latham & Watkins LLP
555 Eleventh Street, N.W., Suite 1000
Washington, D.C. 20004-1304
RE: Request to reconsider NY N301117; Classification of monitor calibration kit
Dear Ms. Nappi:
This is in response to your correspondence of November 15, 2018 in which you request
reconsideration of New York Ruling Letter (NY) N301117, dated November 2, 2018, and issued to you on behalf of your client, Datacolor, Inc. In NY N301117, U.S. Customs and Border Protection (CBP) classified two monitor calibration kits (“SpyderX Pro” and “SpyderX Elite”) under heading 9027, Harmonized Tariff Schedule of the United States (HTSUS), specifically subheading 9027.50.40, HTSUS, which provides for “[I]nstruments and apparatus for physical or chemical analysis (for example, polarimeters, refractometers, spectrometers, gas or smoke analysis apparatus); instruments and apparatus for measuring or checking viscosity, porosity, expansion, surface tension or the like; instruments and apparatus for measuring or checking quantities of heat, sound or light (including exposure meters); microtomes; parts and accessories thereof: Other instruments and apparatus using optical radiations (ultraviolet, visible, infrared): Other: Electrical.” No sample was submitted with your reconsideration request. In an email to this office dated December 3, 2020, you withdrew your request to discuss this matter per Section 177.4 of Title 19 of the Code of Federal Regulations (19 C.F.R. §177.4). For the reasons set forth below, we are affirming NY N30117.
The articles at issue in NY N301117 are described as monitor color calibration kits, identified as the “SpyderX Pro” and “SpyderX Elite.” The kits are comprised of a colorimeter device and a universal serial bus (USB) flash drive loaded with Datacolor’s calibration software. The colorimeter and software function together to color calibrate a computer monitor to an industry color reference standard. To use the calibration kit, the Datacolor software is loaded onto a computer and the colorimeter is plugged into the computer’s USB port. The downloaded software guides the user through the calibration process. The colorimeter measures the output of the monitor and relays this information to the software program. The components of the SpyderX kits work in conjunction with one another to allow a user to calibrate their computer monitors. According to the information provided, the SpyderX Pro and SpyderX Elite kits differ from one another only in respect to the version of the Datacolor calibration software loaded onto the USB drive (the SpyderX Elite contains the software version with more advanced features than that of the SpyderX Pro).
Classification under the HTSUS is in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods will 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 2 through 6 will then be applied in order.
GRI 3(a) provides that “the heading which provides the most specific description shall be preferred to headings providing a more general description.” GRI 3(b) states, in pertinent part,
that goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character. GRI 3(c) provides that when goods cannot be classified by reference to GRI 3(a) or 3(b), they are to be classified in the heading that occurs last in numerical order among the competing headings that equally merit consideration.
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 HTSUS and are generally indicative of the proper interpretation of the headings. It is CBP’s practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The ENs to GRI 3(b) provide, in pertinent part:
(VII) In all these cases the goods are to be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable.
(VIII) The factor which determines essential character will vary as between different
kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods.
In NY N301117, CBP determined that the Datacolor software and accompanying colorimeter constituted a kit for tariff classification purposes, packaged together to perform the specific function of calibrating a computer monitor by optically analyzing certain variables (luminance, brightness, white balance, color output, etc.). CBP determined that the software, if imported separately, was classified under heading 8523, HTSUS, specifically subheading 8523.51.00, HTSUS, which provides for “[D]iscs, tapes, solid-state non-volatile storage devices, "smart cards" and other media for the recording of sound or of other phenomena, whether or not recorded, including matrices and masters for the production of discs, but excluding products of
Chapter 37: Semiconductor media: Solid-state non-volatile storage devices.” See Headquarter Ruling Letter (HQ) Hl68206 (March 12, 2014); NY N264692 (May 29, 2015), and; NY N214920 (May 7, 2012). CBP further determined that the colorimeter, if imported separately, was classified under subheading 9027.50.40, HTSUS. See NY 184843 (August 28, 2002). In NY N301117, CBP noted, “The Datacolor software does play an important role in the calibration process, guiding a user through the necessary steps and analyzing the data collected by the colorimeter. However, the calibration process does require the use of the colorimeter to measure the aforementioned variables to effectively perform the calibration activity.” For this reason, CBP determined that as neither the software nor the colorimeter components imparted the essential character to the monitor calibration kit, classification fell to subheading 9027.50.40, HTSUS, pursuant to GRI 3(c).
In your request for consideration, you express agreement with CBP’s determination that the subject articles are kits for classification purposes. You also agree with CBP’s assessment that, if imported separately, the Datacolor software is properly classified under subheading 8523.51.00, HTSUS, and the colorimeter under subheading 9027.50.40, HTSUS. You disagree, however, with CBP’s determination that neither the Datacolor software nor the colorimeter impart the essential character to the subject calibration kits. Specifically, you argue that the software component imparts the essential character in accordance with GRI 3(b) and therefore classification of the kit is proper under subheading 8523.51.00, HTSUS. In support of this argument, you note the following:
The software performs the calibration function for which a consumer would purchase this merchandise.
Color calibration products are offered for sale in software-only formats (they rely on the user's own visual perception of the colors on the display monitor to provide input into the calibration function).
The colorimeter cannot function without the software, but the software can be used for other related functions that do not require the colorimeter.
A user typically performs hardware calibration using the colorimeter approximately once per month, but the software functions could be used more frequently.
The colorimeter can be used with either version of the Datacolor calibration software.
The value of the software component in Datacolor's retail kits is significantly greater than the colorimeter component.
The components comprising the subject kits are put up together to meet the specific activity of calibrating the color display on a computer monitor to an industry color reference standard. To perform this function, the Datacolor software guides the user through the process and performs the calibration using the data collected and input by the colorimeter. Although the software performs the actual calibration, the accuracy and quality of the calibration is dependent
on the optical data measured and input by the colorimeter. You note that some monitor calibration software is sold without colorimeters, with the implication being that the colorimeter is therefore not essential to the process of calibration. We note initially that this is not relevant to the instant merchandise, which relies on the data obtained by colorimeter. Likewise, in such instances where a monitor calibration software is sold separately, it is not known if the software sold individually will ultimately be used in conjunction with a separately purchased colorimeter. However, we consider it unlikely that monitor color calibration to an industry standard can be achieved without use of a colorimeter and by means of “the user's own visual perception of the colors on the display monitor.” In this regard, we note that several industry sources recognize the importance of a colorimeter to achieve optimal results:
Camera manufacturers go to great lengths to ensure the cameras we buy faithfully capture color… . To ensure that your computer screen is displaying colours accurately, it pays to regularly calibrate its brightness, contrast and colour. The most accurate way to do this is with a monitor calibrator. By using a monitor calibration tool – a colorimeter is the technical name – on your screen and ?ring a selection of colors at it, any discrepancies can be detected and your computer then programmed to compensate for the color inaccuracy of your monitor. See https://www.digitalcameraworld.com/buying-guides/best-monitor-calibrators (site last visited November, 2020).
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There is a way to get your screen to a known standard, and doing this means that you know you have good representative color and brightness on your screen, and that you’ve made a step toward better prints. This is screen or monitor calibration. To calibrate your screen, you need a puck-like device that sits on your screen, and measures the color being displayed. This is called a spectrophotometer. … Don’t worry, you don’t need to buy one of these specifically, and match software to it, they come as kits, with the required software bundled with it… . First you install the software, and run it. Next you attach the device. See https://digital-photography-school.com/why-is-monitor-calibration-important-and-how-to-do-it/ (site last visited November, 2020).
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Monitor calibration is the process of measuring and adjusting the colors on your computer monitor to match a common standard. To measure the color, you’ll use a device called a spectrophotometer or colorimeter that hangs off your screen. The device works through computer software to maintain the color of your images. See https://www.colesclassroom.com/what-is-monitor-calibration-and-why-do-i-need-it/ (site last visited November, 2020).
We do not agree with your argument that the software imparts the essential character to the kit because the software performs the actual calibration function. Industry sources, cited supra, indicate that monitor color calibration to a standard requires input data from a colorimeter (also referred to as a “spectrophotometer”). We also do not find the fact that the “software can be used for other related functions” without the colorimeter to be germane. The components are put up together specifically to effect color calibration. The fact that the software can perform other “related functions” does not mean it is more important to the function of color calibration than the colorimeter. For this same reason we do not find your argument that as the software could be used more frequently than the typical monthly use of the colorimeter, it imparts the essential character to the kit. Again, we note that both components are equally necessary to effect color calibration. The fact that the software will be used more often for other related tasks is not relevant in this GRI 3(b) analysis. Similarly, we do not view the fact that the colorimeter can be used with different versions of the Datacolor software to be relevant to the instant analysis as all versions of the software will require a colorimeter to achieve accurate color calibration. Lastly, although the issue of the relative value of components may be relevant in some GRI 3(b) analyses, it is not determinative in this instance. Rather, it is the respective roles of the components as they relate to the function or activity for which the kit is put up for retail sale that controls in this case. Regardless of their respective values, both the Datacolor software and the colorimeter are necessary to achieve monitor color calibration to an industry standard.
As such, neither the Datacolor software component nor the colorimeter component imparts the essential character to the subject monitor color calibration kits. As it is not possible to determine which component imparts the essential character, classification is determined pursuant to GRI 3(c), which provides that goods are to be classified in the heading that occurs last in numerical order among the competing headings that equally merit consideration. As between the two headings under consideration, heading 9027, HTSUS, occurs last in numerical order.
For the reasons set forth above, we hereby affirm NY N301117. Accordingly, the
subject SpyderX Pro and SpyderX Elite kits are classified in subheading 9027.50.40, HTSUS, which provides for “[I]nstruments and apparatus for physical or chemical analysis (for example, polarimeters, refractometers, spectrometers, gas or smoke analysis apparatus); instruments and apparatus for measuring or checking viscosity, porosity, expansion, surface tension or the like; instruments and apparatus for measuring or checking quantities of heat, sound or light (including exposure meters); microtomes; parts and accessories thereof: Other instruments and apparatus using optical radiations (ultraviolet, visible, infrared): Other: Electrical.” The general, column one rate of duty is free.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 9027.50.40, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.01, in addition to subheading 9027.50.40, HTSUS, listed above.
The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china respectively.
The tariff is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Notice cited above and the applicable Chapter 99 subheading. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at https://hts.usitc.gov/current.
Sincerely,
Craig T. Clark, Director
Commercial and Trade Facilitation Division