Allied Telesis, Inc.; Local Area Network Micro Repeaters; LAN; Fiber Optic Inter Repeater Link; Automatic Data Processing Machine; Control or Adapter Units; HQ 952659

HQ 953210 April 30, 1993 CLA-2 CO:R:C:M 953210 MBR CATEGORY: Classification TARIFF NO.: 8471.99.15 Mr. John J. Marshall "K" Air Brokerage, Inc. 40-A Broderick Road Burlingame, CA 94010 RE: Allied Telesis, Inc.; Local Area Network Micro Repeaters; LAN; Fiber Optic Inter Repeater Link; Automatic Data Processing Machine; Control or Adapter Units; HQ 952659 Dear Mr. Marshall: This is in response to your letter of January 7, 1993, requesting classification of the local area network ("LAN") Micro Repeaters, under the Harmonized Tariff Schedule of the United States (HTSUS). FACTS: Model AT-MR116F CentreCOM Micro Repeater is a two port media converter designed for the Fiber Optic Inter Repeater Link ("FOIRL") to coaxial cable media. It provides for connection of a FOIRL segment to either a thinnet (10Base2) coaxial segment with the AT-MR117F, or to an AUI (10Base5) coaxial segment with the AT- MR116F. Segments on either side of the unit support full length, fully repeated transmission, and it provides the maximum number of nodes specified by the IEEE. Models AT-MR410T (four port with external power supply) and AT-MR820T (eight port with internal power supply), are twisted pair repeaters intended to connect up to eight IEEE 802.3 10Base-T network segments. In addition to the twisted pair interfaces, an IEEE 802.3 Attachment Unit Interface (AUI) is provided for attachment to other LAN media through an external transceiver. The AT-MR860T (eight port 10Base-T) micro repeater is a twisted pair repeater designed for connection of up to eight IEEE 802.3 10Base-T network segments to one coaxial tap. The inter- changeable taps provide for connection to both thinnet (10Base2) -2- and thicknet (10Base5) cable. They are equipped with external power supplies. The AT-MR122T (BNC to RJ45 repeater with internal power supply) is a two port media extender designed for coaxial media and unshielded twisted pair. This repeater provides for connection to UTP (10Base-T), thin coax (10Base2), and thick coax (10Base5), in any combination of media. ISSUE: Are LAN Micro Repeaters ("Repeaters") classifiable under subheading 8517.82.00, HTSUS, which provides for electrical apparatus for line telegraphy, or are they classifiable under subheading 8471.99.15, HTSUS, which provides for ADP "control or adapter units"? LAW AND ANALYSIS: Since the HTSUS came into effect there has been a great deal of controversy regarding the classification of LAN equipment. However, there is no clear classification guidance from either the HTSUS or the Harmonized Commodity Description and Coding System Explanatory Notes (ENs), primarily due to the technological advancements in this area. In HQ 952659, dated October 8, 1992, regarding LAN boards, we cited Legal Note 5(B) to chapter 84, HTSUS, which provides guidance regarding the classification of units of automatic data processing machines. It states: Automatic data processing machines may be in the form of systems consisting of a variable number of separately housed units. A unit is to be regarded as being a part of the complete system if it meets all of the following conditions: (a) It is connectable to the central processing unit either directly or through one or more other units; and (b) It is specifically designed as part of such a system (it must, in particular, unless it is a power supply unit, be able to accept or deliver data in a form (code or signals) which can be used by the system). We agree that the instant Repeaters are connectable to the CPU either directly or through one or more units. Furthermore, the Repeaters are designed to be a constituent unit of an ADP system, and are able to accept and deliver data. In HQ 952659 we also cited the Harmonized Commodity Description and Coding System Explanatory Notes (ENs), pages 1299- -3- 1300, which describe the classification scope of the ADP unit provisions, in pertinent part, as follows: This heading also covers separately presented constituent units of data processing systems. Constituent units are those defined in Parts (A) and (B) above as being parts of a complete system. Apart from central processing units and input and output units, examples of such units include: (4) Control and adaptor units such as those to effect interconnection of the central processing unit to other digital data processing machines, or to groups of input or output units which may comprise visual display units, remote terminals, etc. We agree that the principal use of the instant Repeaters is, in fact, to effectuate the interconnection of the CPU unit to other units or ADP machines, thereby serving "control" and "adaption" functions. However, it is important to note that there are certain "repeaters" whose principal use is not the interconnection of the CPU unit to other units or ADP machines. For instance, telephonic repeaters would not be classifiable under heading 8471, HTSUS. Some of the Repeaters include external power supplies. Section XVI, Legal Note 4 provides as follows: Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in chapter 84 or chapter 85, then the whole falls to be classified in the heading appropriate to that function. Therefore, since the power supplies are imported with the Repeaters, and are intended to contribute together to a clearly defined function, they are classified together in subheading 8471.99.15, HTSUS. HOLDING: The Allied Telesis, Inc., LAN Micro Repeaters (with or without power supplies), model numbers AT-MR410T, AT-MR820T, AT-MR122T, AT- MR116F, AT-MR860T, are classifiable under subheading 8471.99.15, HTSUS, which provides for: "[a]utomatic data processing machines -4- and units thereof: [o]ther: [o]ther: [c]ontrol or adapter units." The rate of duty is Free. Sincerely, John Durant, Director