CLA-2-85:OT:RR:NC:N2:212
Michael Dahm
Cole International USA Inc.
1775 Baseline Rd Grand Island, NY 14072
RE: The tariff classification of a perception system from Canada
Dear Mr. Dahm:
In your letter dated December 21, 2022, you requested a tariff classification ruling on behalf of your client, Hexagon.
The merchandise under consideration is identified as the Hexagon Perception Development System, which you state is a kit involving multiple individual components used in autonomous vehicle operation and development in agricultural vehicles. The system consists of a stereo camera module, multiple mono cameras, and an electronic control unit (ECU). Per the information provided, these items are packaged and intended to be used together.
In use, the stereo and mono cameras are mounted on the outside of an agricultural machine while the ECU is incorporated within the vehicle. The cameras record the surrounding area and send the information to the ECU. The ECU uses deep-learning artificial intelligence algorithms to map out where the obstructions are located and instructs the vehicle to navigate the area. This information is viewable on a separate computer device, which is not a part of the subject system.
General Rules of Interpretation (GRI) 1, Harmonized Tariff Schedule of the United States (HTSUS), states, in part, that for legal purposes, classification shall be determined according to the terms of the headings, any relative section or chapter notes and, unless otherwise required, according to the remaining GRI’s taken in order. Goods that are, prima facie, classifiable under two or more headings, are classifiable in accordance with GRI 3.
GRI 3(a) states that the heading that provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings refer to only part of the items in a composite good, those headings are to be regarded as equally specific in relation to the goods, even if one of them gives a more complete or precise description of the good. As such, they are regarded as equally specific and classification of the composite good is to be determined by GRI 3(b) or GRI 3(c) taken in the appropriate order in which they are set out in GRI 3. GRI 3(b) states, in part, that composite goods, which cannot be classified by reference to GRI 3(a), are to be classified as if they consisted of the component that 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 which equally merit consideration. Inasmuch as no essential character can be determined, GRI 3(b) does not apply.
Upon examination of the facts presented in this case relevant to the subject system, it is our opinion that neither the cameras nor the ECU impart an essential character and are both considered equally important in the system’s function. Accordingly, classification will be derived pursuant to GRI 3(c). A thorough review of the competing headings finds that the ECU is classified under heading 8543, HTSUS, which occurs numerically last in the tariff.
The applicable subheading for the Hexagon Perception Development System will be 8543.70.9860, HTSUS, which provides for “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus: Other: Other: Other: Other.” The general rate of duty will be 2.6% ad valorem.
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 at https://hts.usitc.gov/current
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, please contact National Import Specialist Luke LePage at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division