OT:RR:CTF:TCM H317791 DSR
Mr. Troy D. Crago
Import Specialist
Atico International USA, Inc.
501 South Andrews Avenue
Fort Lauderdale, FL 33301
William Viriya Netramai
Global Trade Compliance
Beats Electronics LLC
1601 Cloverfield Blvd., Suite 5000N
Santa Monica, CA 90404
Elisabeth Forrest
Plantronics
345 Encinal Street
Santa Cruz, CA 95060
Ms. Antoinette McKnight
American Shipping Company, Incorporated
250 Moonachie Rd., 5th Floor
Moonachie, NJ 07074
Mr. Eric S. C. Wang
Dynasty Customs Broker, Inc.
Dynasty U.S.A. Group
1409 San Mateo Avenue
South San Francisco, CA 94080
Mr. Steve Bonar
Global Customs Compliance Manager
Plantronics Inc.
345 Encinal Street
Santa Cruz, CA 95060
RE: Tariff classification of Bluetooth enabled wireless headphone sets from China, Mexico and an undisclosed country of origin; Revocation of NY N012174 (June 12, 2007), NY N012171 (June 12, 2007), NY N022197 (February 19, 2008), NY N022195 (February 20, 2008), NY N022204 (February 20, 2008), NY N170023 (July 8, 2011), NY N220756 (June 28, 2012), NY N240329 (April 22, 2013), and NY N269695 (October 30, 2015)
Dear Mses. McKnight and Forrest, and Messrs. Banar, Wang, Netramai, and Crago,
This letter is in reference to the tariff classification of retail sets containing certain wireless headphones. We have identified nine published rulings that need to be reconsidered so that we do not have in force rulings that may be inconsistent with our current views.
Each of the rulings classified the subject merchandise in subheading 8517.62.00, Harmonized Tariff Schedule of the United States (HTSUS), which provides for "Other apparatus for transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network): Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus." After reviewing the rulings, CBP has determined that the classifications of the subject articles are incorrect and CBP is therefore revoking them for the reasons set forth herein.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. § 1625(c)(1)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. No. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed action was published on April 24, 2024, in Volume 58, Number 16, of the Customs Bulletin. One comment, addressed herein, was received in response to this notice.
FACTS:
The subject of NY N269695 is described as follows:
The item concerned is referred to as the Blackwire C720. It is described as a versatile Unified Communications (UC) headset. This device is a telecommunication type headset with two speakers (one for each ear) and a microphone within a wraparound style mouthpiece. It also incorporates a Bluetooth transceiver and a USB port.
The Bluetooth transceiver enables the Blackwire C720 headset to wirelessly connect to mobile phones and tablets while the USB port allows it to alternatively connect, via a USB cable, to a personal computer (PC). This headset uses smart sensor technology that automatically answers a call when the user puts on the headset. The inline controls with Bluetooth functionality are used to answer mobile calls and PC calls, control volume, and mute volume. Inline indicator lights and voice prompts alert the user to connection status, mute, and volume status. Lights on the ear pad let colleagues know when the user is on a call.
The subjects of NY N220756 are described as follows:
The merchandise subject to this ruling is five Bluetooth headsets. They are identified within your ruling letter as Model Numbers XP500, PX5, Delta, XP300, and XP400. Your letter states that the headsets are primarily designed for gaming purposes for utilization with such electronic games as the Sony PlayStation 3 and the Microsoft Xbox 360. Within your submission you also state that the headsets can also transmit radio frequency (RF) not only from a game console, but also to the game console enabling the user to speak with others within a local or wide area network. Additionally, these headsets can communicate with any other device capable of receiving RF signals using Bluetooth technology, such as phones, computers, and other consumer electronic devices. As such, although they are designed for gaming purposes, it is not solely or principally used with a gaming system. Samples of each of the five Bluetooth headsets were furnished for classification purposes and are being returned to you as per your request.
Each of the headsets has a transceiver microchip which provides 2-way communication that allows the user to communicate with other online video game players. The headsets receive and transmit RF signals from and to a video game console. The headsets receive an RF signal and convert it to sound waves for a player to hear. When a player speaks, the sound waves are converted to RF signals and sent back to the video game console, enabling all players on the PlayStation network to hear the audio and to speak to one another. The headsets utilize Bluetooth, which is an open wireless protocol for exchanging data over short distances using radio waves, which enables the headsets to communicate wirelessly with other devices that they are “paired” up with, such as a cell phone and other Bluetooth devices. The XP500, PX5, and Delta headsets use wireless CD-quality game sound via digital 2.404-2.475 GHz RF that communicates with a transmitter that is included in each headset. The XP300 and XP400 use wireless CD-quality game sound via digital 5.160-5.280 GHz RF that communicates with a transmitter that is included with each headset.
The subjects of NY N170023 are described as follows:
… Model EX-01 is referred to as a Bluetooth headset. Model EX-02s is referred to as a next generation Bluetooth headset. Both models contain a transceiver microchip which provides two-way communication. They receive and transmit using a 2.4 GHz radio frequency (RF) signal from and to a video game console. The headsets receive an RF signal and convert it to sound waves for a player to hear. When a player speaks, the sound waves are converted to RF signals and sent back to the video game console, enabling all players on a PlayStation network to hear the audio and to speak to one another. Although your submission states that the Gioteck Bluetooth headsets are designed for home video game consoles, such as PS3, XBOX360, they are not exclusively for use with a gaming console. There is nothing about these products that prevent them from being used with other devices, such as a cellular telephone for 2-way communication, so long as the headsets are “paired” with the other devices.
Model EX-01 is a Bluetooth headset. It is an over-the-ear earphone (speaker) combined in the same housing with a microphone and radio reception/transmission apparatus (transceiver microchip), enabling the headset to communicate wirelessly with other apparatus. It contains an ear hook, an LED feedback indicator, buttons for volume increase/decrease and power/mute, and a rechargeable Lithium-ion polymer battery. It is imported with two spare over-the-ear hooks and a USB cable to recharge the battery. The headset utilizes Bluetooth (an open wireless protocol for exchanging data over short distances using radio waves), which enables the headset to communicate wirelessly with other devices that it is “paired” up with.
Model EX-02s is a next generation Bluetooth headset is an over-the-ear earphone (speaker) combined in the same housing with a microphone and radio reception/transmission apparatus (transceiver microchip), enabling the headset to communicate wirelessly with other apparatus. It contains an ear hook, an LED feedback indicator, buttons for volume increase/decrease and power/mute, and a rechargeable Lithium-ion polymer battery. It is imported with a spare over-the-ear hook and a USB cable to recharge the battery. The headset utilizes Bluetooth (an open wireless protocol for exchanging data over short distances using radio waves), which enables the headset to communicate wirelessly with other devices that it is “paired” up with.
The subject of NY N022197 is described as follows:
The merchandise is identified in your letter as a Slim Size Bluetooth Wireless headset, which weighs only 9 grams, has Bluetooth V2.0 + EDR (Enhanced Data Rate). The Bluetooth Wireless headset is identified within your letter as Item # A015DA00070. It is built with a transceiver microchip that receives and transmits using radio frequency (RF) signals with a cellular phone within a 30 feet operating range. The cellular phone transmits a Bluetooth signal to the headset. The headset receives the RF signals and converts the signal to sound waves for the user to hear. When the user speaks into the headset the sound waves are converted to a signal and sent back to the corresponding cellular phone. Among its many features are 6 hours of talk time, 100 hours standby time, easy switching between headset and hands free, volume control, support voice dial, and last number redial. An alternating current (AC) adapter for recharging the battery and three different size earpieces are included with the headset.
The subject of NY N012174 is described as follows:
The merchandise subject to this ruling is a CS70N wireless headset system. The CS70N is Plantronic’s new office headset system, which allows the user to wear it over the ear. It incorporates a noise canceling microphone for clarity and clear speech in noisy environments. This wireless headset system is put up for retail sale as a product comprised of a base unit that connects to a lined telephone, a wireless headset that transmits and receive radio frequency at 1.9 GHz, a power cord for the base unit, ear-tips of different sizes for the user’s comfort, and a handset lifter.
The base unit plugs into the headset jack on the telephone to receive and transmit sound waves into a modulated current to feedback to the telephone. Once the modulated current is received by the base unit, it encrypts the current and sends it to the wireless headset via a radio frequency at 1.9 GHz. Once the headset receives the signal from the base unit, it decodes the transmission and regenerates the signal into voice. When the user speaks into the headset the process is reversed. The voice from the user is encrypted and is transmitted back to the base unit. The base unit then decodes the signal and converts it to a modulated current, which is then sent to the telephone. The CS70N features a control button to answer/end/make calls and a volume control including mute. The base unit can fully recharge the headset.
The subject of NY N012171 is described as follows:
The merchandise subject to this ruling is a Discovery 655 Bluetooth headset. The Discovery 655 is Plantronic’s mobile headset which allows the user to wear it over the ear. It incorporates digital signal processing (DSP), the latest audio technology for enhanced sound for clear conversations. The Discovery 655 is put up for retail sale as a product comprised of a Bluetooth wireless headset that transmits and receives with a cellular phone, a AAA battery charger, an AC charger, a mini-USB to USB charging cable used for charging by a computer, ear-tips of different sizes for the user’s comfort, and an ear stabilizer for secure positioning on the ear.
The Bluetooth headset is built with a transceiver microchip which receives and transmits using radio frequency (RF) signals, 2.4 GHz ISM, with a cellular phone within 33 feet. The cellular phone transmits a Bluetooth signal to the headset. The headset receives the RF, coverts the signal to sound waves for the user to hear. When the user speaks into the headset the sound waves are converted to a signal and sent back to the corresponding cellular phone. The Discovery 655 features a control button to answer/end/make calls and volume control including mute. The headset can utilize voice dialing when the cellular phone has enabled the voice dialing.
The subject of NY N022195 is described as follows:
This Bluetooth wireless stereo headphone features Bluetooth V2.0 + EDR (Enhanced Data Rate), support profiles of hands-free headset A2DP & AVRCP, a LI-ION rechargeable battery, which provides 12 hours of talk time, 10 hours of music time, and 260 hours of standby time, and has an operating range up to 30 feet. It has a built-in microphone, volume control with up/down/mute modes, a music control that enables the user to play music backward and forward, supports voice dial, last number redial, an LED for line-in-use & battery level check indication, and auto-switching between listening to music and making phone calls. A foldable headband and USB charger is included.
The subject of NY N022204 is described as follows:
The Bluetooth wireless stereo headphone features Bluetooth V2.0 + EDR (Enhanced Data Rate), supports HS, HF, A2DP, & QVRCP profile, 8 hours of talk time, 170 hours of standby time, and has an operating range up to 30 feet. It has a music control that enables the user to play music backward and forward, supports voice dial, and last number redial. An AC adapter and detachable earpiece are included.
The subject of NY N240329 is described as follows:
The merchandise in question is referred to as the “Beats Wireless Over Ear Headphone” set (Model # 810-00012-00) The retail package includes a pair of Beats wireless headphones, a USB charging cable, a remote microphone cable, an audio cable, an audio plug adapter, and a uniquely shaped fitted case. The ear cups are cushioned, and one ear cup incorporates a microphone, a power/answer/hang-up button, a power LED indicator, a play/pause button, back and next buttons, and volume control buttons. There is a jack located at the base of this ear cup for the audio or microphone cable. The other ear cup incorporates a mini-USB jack at the base which is used to charge the item. It is retail packaged upon importation.
The headphones incorporate the “BlueCore5 Multimedia Bluetooth Chip.” This chip allows for wireless two-way communication between the headset and any Bluetooth enabled device. The user can access Bluetooth enabled cellular telephones for wireless two-way communications and wirelessly receive streaming audio from an iPod, iPhone, iPad, laptop, or any other Bluetooth enabled device. The buttons on the ear cup let you manage the volume, skip tracks, and answer telephone calls with a single touch.
ISSUE:
Whether the headphone sets are classified under heading 8517, HTSUS, which provides for, in pertinent part, apparatus for the reception, conversion and transmission or regeneration of voice, images or other data, or under heading 8518, HTSUS, which provides for, in pertinent part, headphones and earphones, whether or not combined with a microphone.
LAW AND ANALYSIS:
Classification under the HTSUS is determined 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. If the goods cannot be classified solely based on GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
The HTSUS provisions under consideration in this ruling are as follows:
8517 Telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or
other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528; parts thereof:
* * *
8518 Microphones and stands therefor; loudspeakers, whether or not mounted in their
enclosures; headphones and earphones, whether or not combined with a
microphone, and sets consisting of a microphone and one or more loudspeakers; audio-frequency electric amplifiers; electric sound amplifier sets; parts thereof:
In addition, in interpreting the HTSUS, the Explanatory Notes (“ENs”) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. Likewise, decisions in the Compendium of Classification Opinions should be treated in the same manner as the ENs. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
The EN to heading 85.17 states, in pertinent part, the following:
This heading covers apparatus for the transmission or reception of speech or other sounds, images or other data between two points by variation of an electric current or optical wave flowing in a wired network or by electromagnetic waves in a wireless network. The signal may be analogue or digital. The networks, which may be interconnected, include telephony, telegraphy, radio-telephony, radio-telegraphy, local and wide area networks.
…
(II) OTHER APPARATUS FOR TRANSMISSION OR RECEPTION OF VOICE, IMAGES OR OTHER DATA, INCLUDING APPARATUS FOR COMMUNICATION IN A WIRED OR WIRELESS NETWORK (SUCH AS A LOCAL OR WIDE AREA NETWORK)
…
(F) Transmitting and receiving apparatus for radio-telephony and radio-telegraphy.
This group includes:
(1) Fixed apparatus for radio-telephony and radio-telegraphy (transmitters, receivers and transmitter-receivers)….
Classification Opinion 8517.62/20 describes the following:
Wireless headset with an AC charger and two ear-hooks of different sizes (headset dimensions : 41.5 mm (L) x 18.9 mm (W) x 25.9 mm (H); weight : 8 grams), consisting of a single (monaural) over-the-ear earphone combined in the same housing with a microphone, a radio transceiver, a rechargeable lithium polymer battery, a power input, a LED (light emitting diode) indicator light and controls. The radio transceiver utilizes an open wireless technology standard (wireless protocol for exchanging data within a Personal Area Network (PAN) using short length radio waves over short distances (up to 10 meters)) with Enhanced Data Rate (EDR) technology, which enables the headset to communicate wirelessly with fixed and mobile devices, such as a mobile telephone for cellular networks. The indicator light provides information on transmission/reception status and state of the battery charge. The power input is designed to accept a 5-pin, B-type plug, permitting recharging from a charger, a USB port on an automatic data processing machine or a motor vehicle accessory plug charger. The controls are used for powering the apparatus on and off, voice dialing, answering and ending incoming calls, rejecting calls, placing calls on hold, call waiting, redial of the last number, if supported by the apparatus with which it is "paired" (transmitting to and receiving from). The product is put up in a set for retail sale in a box with a quick start manual. Application of GIRs 1 (Note 3 to Section XVI), 3 (b) and 6. Adoption : 2011
The EN to heading 85.18 provides, in pertinent part, the following:
This heading covers microphones, loudspeakers, headphones, earphones and audio-frequency electric amplifiers of all kinds presented separately, regardless of the particular purpose for which such apparatus may be designed (e.g., telephone microphones, headphones and earphones, and radio receiver loudspeakers).
The heading also covers electric sound amplifier sets.
. . .
(C) HEADPHONES AND EARPHONES, WHETHER OR NOT COMBINED WITH A MICROPHONE, AND SETS CONSISTING OF A MICROPHONE AND ONE OR MORE LOUDSPEAKERS
Headphones and earphones are electroacoustic receivers used to produce low intensity sound signals. Like loudspeakers, described above, they transform an electrical effect into an acoustic effect; the means used are the same in both cases, the only difference being in the powers involved.
The heading covers headphones and earphones, whether or not combined with a microphone, for telephony or telegraphy; headsets consisting of a special throat microphone and permanently fixed earphones (used, for example, in aviation); line telephone handsets which are combined microphone/speaker sets for telephony and which are generally used by telephone operators; headphones and earphones for plugging into radio or television receivers, sound reproducing apparatus or automatic data processing machines….
We find that the instant headphones are composite machines described in Note 3 to Section XVI, HTSUS, and therefore classified as consisting only of the component that performs their principal function. Specifically, Note 3 states the following:
Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.
The General ENs to Section XVI, provide, in relevant part, as follows:
(VI) MULTI FUNCTION MACHINES AND COMPOSITE MACHINES
(Section Note 3)
In general, multi-function machines are classified according to the principal function of the machine.
…
Composite machines consisting of two or more machines or appliances of different kinds, fitted together to form a whole, consecutively or simultaneously performing separate functions which are generally complementary and are described in different headings of Section XVI, are also classified according to the principal function of the composite machine.
…
For the purposes of the above provisions, machines of different kinds are taken to be fitted together to form a whole when incorporated one in the other or mounted one on the other, or mounted on a common base or frame or in a common housing.
Here, each of the subject headphones incorporate a Bluetooth transceiver that allows for wireless two-way communication between the headphones and other Bluetooth-enabled devices. For instance, the headphones’ users can access Bluetooth-enabled cellular telephones for wireless two-way communications or also wirelessly receive streaming audio from another Bluetooth-enabled device. Also, in the cases of the Beats headphones of NY N240329 and the Blackwire C720 of NY N269695, a user can choose to connect the devices directly to an audio source via an audio cable, or USB connection, respectively. Each device under consideration also possesses buttons that allow a user to manage functions such as incoming audio volume, audio track control and answering telephone calls.
Similar to the ENs, T.D. 89-80, supra, indicates that a classification opinion in the Compendium of Classification Opinions constitutes the official interpretation of the Harmonized System. Although generally indicative of the proper interpretation of the various provisions in the HS, classification opinions are not legally binding on the contracting parties. They should be consulted for guidance but should not be treated as dispositive.
In this case, we have consulted Classification Opinion 8517.62/20, but find that is not dispositive. In applying the legal text of Note 3 to Section XVI, we note that the transmission and reception functions of the Bluetooth transceivers in the subject headphones are not indicative of a principal function based on the reception or transmission of voice, images, or other data. Rather, in the case of the subject headphones, the wireless connectivity facilitated by the Bluetooth transceivers is analogous to the connectivity found in wired headphones. See NY N302512, dated February 9, 2019 (where CBP classified wired headphones with similar control functionality under heading 8518, HTSUS). In other words, the transmission and reception functions inherent to the subject devices are intermediate steps or ancillary features that complement the devices’ ultimate principal function, which is to convert incoming and outgoing signals into sound – that is, to function as headphones combined with microphones. Therefore, we find that the subject headphone sets of NY N012174, NY N012171, NY N022197, NY N022195, NY N022204, NY N170023, NY N220756, NY N240329 and NY N269695 are properly classified as headphones of heading 8518, HTSUS.
Finally, with regard to the comment submitted in response to the notice of proposed action, we note that the commenter supports the revocation of the subject rulings but also proposes that the analysis contained in this action be applied to the product considered in HQ H251033 (July 31, 2014), and that HQ H251033 be revoked as well. In that ruling, CBP considered the classification of a retail set consisting of, in relevant part, a wireless stereo headset containing a pair of full-size earphones combined in the same housing with a microphone and a radio transceiver microchip mounted on a printed circuit board. In addition, the set contains a USB dongle transceiver that is to be connected to a Playstation®3 videogame console or other automatic data processing (ADP) machine. The headset transceiver utilizes a wireless connection with the USB dongle transceiver to transmit voice and audio content between a videogame console (or ADP machine) and the headset, thereby allowing a user to listen to audio content from the videogame console or ADP machine and communicate with fellow gamers via the headset’s incorporated microphone. While the merchandise at issue in HQ H250133 bears similarities with the merchandise at issue in this ruling, we conclude that the facts of that case differ enough such that HQ H251033 should be addressed under separate cover. As such, we are declining to revoke HQ H251033 in this action.
HOLDING:
By application of GRIs 1 (Note 3 to Section XVI), 3(b) and 6, the subject headphone sets are classified in heading 8518, HTSUS, specifically in subheading 8518.30.20, HTSUS, which provides for “Microphones and stands therefor; loudspeakers, whether or not mounted in their enclosures; headphones and earphones, whether or not combined with a microphone, and sets consisting of a microphone and one or more loudspeakers; audio-frequency electric amplifiers; electric sound amplifier sets; parts thereof: Headphones and earphones, whether or not combined with a microphone, and sets consisting of a microphone and one or more loudspeakers: Other.” The column one, general rate of duty is free.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the internet at www.usitc.gov/tata/hts/.
EFFECT ON OTHER RULINGS:
NY N012174, NY N012171, NY N022197, NY N022195, NY N022204, NY N170023, NY N220756, NY N240329 and NY N269695 are revoked in accordance with this decision. In accordance with 19 U.S.C. §1625(c), this ruling will become effective 60 days after publication in the Customs Bulletin.
Sincerely,
Gregory Connor
for Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division