The tariff classification of a laptop computer with an unloaded BIOS chip from Japan.

NY C86235 April 9, 1998 CLA-2-84:RR:NC:1:110 C86235 CATEGORY: Classification TARIFF NO.: 8471.30.0000 Ms. Susan Gleason Fujitsu America, Inc. 3055 Orchard Drive San Jose, CA 95134-1318 RE: The tariff classification of a laptop computer with an unloaded BIOS chip from Japan. Dear Ms. Gleason: In your letter dated April 6, 1998, you requested a tariff classification ruling. The merchandise under consideration involves a prototype laptop computer that will be imported into the U.S. fully assembled but with an unloaded BIOS chip. The BIOS chip contained in this otherwise complete laptop computer, contains a preparation program with a capacity of approximately 10K bytes in flash memory. The capacity of the full BIOS instruction program will be around 500K bytes and will be loaded onto the BIOS chip after importation in a manufacturing facility. The BIOS instructions will be loaded onto the chip by either downloading it to the laptop via local area network (LAN) or a floppy drive using a keyboard or mouse. Finally, a test program will be run to ensure the full functionality of the laptop including the interaction with the operating system. ISSUE: Whether a notebook computer with a processor unit, keyboard, display unit and unloaded BIOS chip is classifiable as an unfinished ADP machine or as a part of an ADP machine under the HTS? LAW AND ANALYSIS: Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes. To be classified as an ADP machine, merchandise must meet the criteria in Legal Note 5 (A) to Chapter 84 of the HTS. In previous HQ rulings such as 957524, dated March 28, 1995, Customs determined that the lack of a ROM BIOS chip prevents the motherboard of a processor unit from performing input/output functions with the keyboard. Logic and control functions also cannot be performed under this scenario. Based on the information provided, the subject laptop computer contains an unloaded BIOS chip. After the full BIOS instruction program is loaded onto the BIOS chip, either through a LAN or floppy drive, the laptop computer will be a fully operational data processing machine. Legal Note 5 (A)(a) to Chapter 84, HTS, only requires that the merchandise is "capable" of performing the functions listed. Customs has consistently held that the presence of the hardware and/or firmware was a crucial factor in determining whether or not the terms of LN 5 (A)(a) to Chapter 84 have been met. It is our opinion therefore that the subject laptop computer satisfies the terms of heading 8471, HTS. GRI2(a) provides that any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or unfinished article. The subject laptop computer is an incomplete or unfinished digital processing unit, needing only the introduction of the full BIOS instruction code. In its imported condition, this notebook computer has the essential character of a complete or finished digital processing unit because it possesses the essential elements required for data processing. Please note HQ 957287 of August 9, 1995, which ruled on a similar issue. The applicable subheading for the laptop computer with an unloaded BIOS chip will be 8471.30.0000, Harmonized Tariff Schedule of the United States (HTS), which provides for portable digital automatic data processing machines, weighing not more than 10 kg, consisting of at least a central processing unit, a keyboard, and a display. The rate of duty will be 1.4 percent ad valorem. This ruling is being issued under the provisions of Part 177 of the Customs 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, contact National Import Specialist Art Brodbeck at 212-466-5490. Sincerely, Robert B. Swierupski Director, National Commodity Specialist Division