Internal Advice Request No. 09/036; Tariff classification of pipetting systems.

HQ H203655 October 19, 2012 CLA-2 OT:RR:CTF:TCM H203655 RES CATEGORY: Classification TARIFF NO.: 8479.89.98 U.S. Customs and Border Protection Boston Service Port Room 603 10 Causeway Street Boston, MA 02222 ATTN: Norman Burger, Senior Import Specialist RE: Internal Advice Request No. 09/036; Tariff classification of pipetting systems. Dear Port Director: On February 25, 2009, you requested internal advice with regard to the tariff classification of the Platemate and Wellmate fluid dispensing systems under the Harmonized Tariff Schedule of the United States (“HTSUS”). Your request was limited to future/prospective transactions. Your request was initiated by a submission dated February 19, 2009, on behalf of Matrix Technologies LLC (“Matrix”). This letter responds to your request. FACTS: The two articles at issue in this request for internal advice are assemblies for the Platemate and the Wellmate fluid dispensing systems. Both systems perform essentially the same three functions: (1) aspirate or draw fluids from a larger source, (2) move a pre-determined amount of fluid to another container, and (3) dispense the fluid. Matrix refers to the merchandise collectively as pipetting systems. The assemblies for both systems are manufactured in Japan for Matrix by an unrelated subcontractor. The Platemate assembly is imported into the U.S. without the pipetting head. The pipetting head is the part of the machine that aspirates and dispenses fluid. The operating software that controls the operation of the Platemate is manufactured in the U.S. and is loaded on a separate personal computer which controls the functions of the instrument. According to Matrix, it custom manufactures the pipetting heads pursuant to the end-customer’s specifications and then installs the heads and some sensors and solenoids into the imported assemblies. The price of a custom-made head varies, but Matrix stated that the average cost of a pipetting head contributes approximately 27% to the overall cost of the finished Platemate system. The Wellmate does not use pipetting heads; rather, it uses nozzle heads. It is imported assembled without the nozzle heads and some other components. Matrix installs the heads along with a tube set in the imported Wellmate assemblies in the U.S. post-importation. Matrix stated that the nozzle assembly and tube set make up approximately 13% of the overall cost of the finished Wellmate system. U.S. Customs and Border Protection (“CBP”) has classified both systems as a machine having an individual function under subheading 8479.89.98, HTSUS. Matrix asserts that because both of the imported assemblies do not have the dispensing heads installed, they lack the essential character of finished or complete machines. Thus, Matrix argues that the machines should be classified as parts and not as complete fluid dispensing systems. ISSUE: Whether the subject fluid dispensing systems are classified under subheading 8479.89.98, HTSUS, or 8479.90.94, HTSUS? LAW AND ANALYSIS: Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRI). GRI 1 provides that the classification of goods shall be “determined according to the terms of the headings 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 GRI 2 through 6 may be applied in order. In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System, which constitute the official interpretation of the Harmonized System at the international level, 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. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989). The following HTSUS provisions are under consideration: 8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other Machines and mechanical appliances: 8479.89 Other: 8479.89.98 Other 8479.90 Parts: 8479.90.94 Other The articles at issue in the instant request for internal advice are categorized by the importer as fluid dispensing systems. As detailed below, fluid dispensing systems are properly classified under subheading 8479.89.98, HTSUS, through the straightforward application of GRI 1 and GRI 2(a). Resort to subsequent GRIs is therefore unnecessary. Both products at issue here are discussed concurrently. Both the Platemate and Wellmate assemblies are classified under heading 8479, HTSUS, as “[m]achines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof:” See New York Ruling Letter (“NY”) L80994, dated December 20, 2004, (Classifying pipetting systems that aspirate and dispense fluids under heading 8479, HTSUS). See also Rainin Instrument Co., Inc., v. United States 288 F. Supp. 2d 1360, 1366-69 (Ct. Int’l Trade 2003) (Finding that CBP properly classified a mechanical pipetting system that aspirated and dispensed fluids under heading 8479, HTSUS). Matrix’s primary contention is that both assemblies as imported are unfinished and not complete articles and should be classified under subheading 8479.90.94, HTSUS, as a part of a pipetting system. CBP maintains that both of the assemblies should be classified as complete articles and thus fall under subheading 8479.89.98, HTSUS, as “[m]achines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: [o]ther: [o]ther”. Because the issue to be resolved is whether the assemblies are parts or whether they are completed goods for classification purposes, the classification of the articles is determined pursuant to GRI 2(a), which provides in relevant part: [a]ny 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 finished article. It shall also be taken to include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), presented unassembled or disassembled. In previous rulings—HQ H017695, dated June 20, 2008; HQ H019603, dated February 20, 2008; and HQ 967975, dated March 24, 2006—CBP defined the term “essential character” for purposes of GRI 2(a) as the attribute which strongly marks or serves to distinguish what an article is; that which is indispensable to the structure, core or condition of the article; the aggregate of distinctive component parts that establishes the identity of an article as what it is, its very essence. These rulings are discussed below. In HQ H017695, the merchandise at issue was a hand operated power tool designed for the specific use of cleaning drains. The tool was imported in a plastic casing assembly that contained the electric motor, plastic case, and other various parts; however the tool lacked the attachment that actually performed the cleaning of the drains. This attachment was added to the tool post-importation. The incomplete imported merchandise was designed to function within specific parameters as a power drill for use in the cleaning of drains and the merchandise was limited in its ability to do anything else beyond being used only with the added attachment. CBP determined that the plastic-encased motor at the time of importation was advanced beyond a mere electric motor and had the essential character of a power drill. In HQ H019603, the merchandise at issue was a light fixture. The imported item was a subassembly consisting of a housing comprised of a metal frame, side reflector, light blocking strip, two rubber gaskets, lamp-holder bracket, two lamp holders, top reflector, ballast, and various wiring. The importer asserted that the subassembly was a part of a light fixture, because additional components, such as a lens, diffuser, and side panels, were added to the imported fixture subassembly. CBP determined that the essential character of the finished product was to provide light. The imported subassembly fixture could provide light without the additional components that were added post-importation. Therefore, the subassembly was deemed to be a complete fixture pursuant to GRI 2(a). CBP stated that the additional components that were added post-importation merely enhanced the ability of the fixture to provide light. In HQ 967975, the articles at issue were crimping presses. The presses processed a wide range of cables and other insulated copper wire products by cutting the wire, stripping off insulation, and then crimping contacts, connectors or terminals to the exposed end of the wire. The presses were imported without the crimping component that is necessary to crimp the metal contacts to the wire ends. CBP determined that under a GRI 2(a) analysis, the imported presses, even without the crimping component, were substantially complete machine tools. CBP stated that the aggregate of distinctive component parts of the presses established the identity of the articles as complete machines that were metal wire bending and folding machine tools. With the GRI 2(a) analytical principles established in these CBP rulings in mind, we apply them to the analysis of the articles at issue here. By themselves, the imported Platemate assembly lacks the commercially useful function of the pipetting heads and the Wellmate assembly lacks the same function of the nozzle heads. However, this does not automatically mean that the GRI 2(a) analysis ends because an incomplete article lacks a component that actually performs the primary ability and function of a complete article at importation. The analysis turns on whether the aggregate of the components that make up the imported Platemate and Wellmate assemblies is enough to establish/set the essence or nature of the assemblies as that of complete articles at importation and whether the imported incomplete Platemate and Wellmate assemblies require some kind of transformative additional manufacturing in order for the identity of them as complete articles to be established post-importation. Neither of the imported Platemate and Wellmate assemblies are simply a collection of random components assembled together in a substantial manufacturing process. Instead, the assemblies are an assembled collection of distinctive parts, in which each component has been designed, manufactured to specific dimensions, and built for the specific purpose to be part of a machine that is a liquid dispensing system. And this collection of individual components has gone through a substantial manufacturing process to be assembled together into a machine that has a singular purpose that is established at the time of importation: that of a liquid dispensing system. The imported assemblies are designed to function within specific parameters as liquid dispensing machines and are to be used only with their respective installed liquid dispensing components. Furthermore, the assemblies are not being imported as spare parts but are intended to be their own fully complete machine upon the installation of their respective missing components. As a result, the identity of the assemblies as either a finished Platemate or Wellmate machine is established (fixed and certain) at the time of importation, even without the specific components (the pipetting or the nozzle heads) that actually perform the aspirating and dispensing of liquid function. See The Pomeroy Collection, Ltd., v. United States, 559 F. Supp. 2d 1374, 1387-88 (Ct. Int’l Trade 2008) (Court finding that the identity of the ability to provide illumination was fixed and certain at importation because the candles, which were part of the unassembled package, by definition are things that provide illumination). Accordingly, pursuant to GRI 2(a), both the Platemate and Wellmate assemblies are considered complete articles. Matrix argues that both of the assemblies are not complete articles because the pipetting heads and nozzle heads are installed after importation. Matrix claims that without these additional components, the articles are unable to perform their primary functions of fluid aspirating and dispensing. In regard to the Platemate assembly, Matrix stated that the additional manufacturing involved in installing the pipetting heads into the Platemate assembly makes up 27% of the total cost of a complete Platemate machine and that additional manufacturing involved in installing the nozzle heads into the Wellmate assembly makes up 13% of the total cost of a complete Wellmate machine. Matrix cites HQ 954820, dated December 13 1993, to support its contention that the percentage cost of the pipetting heads or nozzle heads in relation to the value of the completed article, is a factor that favors finding that the imported assemblies lack the essential character of complete Platemate and Wellmate machines. Matrix asserts that HQ 954820, which involved printing press machine parts, is a comparative situation by arguing that the printing press head provides the primary ability and function of a complete printing press, in the same way that the pipetting heads or nozzle heads provide the ability and function of a liquid dispensing system. In HQ 954820, the merchandise at issue, when fully assembled, was a flexographic printing press. All of the parts of the printing press were imported unassembled and together in the same shipment except for the main printing head part, which was imported in a separate shipment. CBP determined that without the main printing head part in the same shipment as all the other parts, the shipment of the unassembled other parts did not constitute an unfinished flexographic printing press and thus the merchandise was classifiable as parts. The ruling stated that the printing press head imparts the essential character on the printing press and that without the main printing head the printing press would not function without it. The situation in HQ 954820 is not analogous to the instant case. First, the printing press was shipped as parts, unassembled, and in different shipments. In contrast, the Platemate and Wellmate assemblies underwent substantive manufacturing and assembly prior to importation. Second, because the printing press was imported as a collection of parts, CBP relied upon U.S. v. Baldt Anchor, Chain & Forge Division of Boston metals Co., 429 F.2d 1403 (C.C.P.A. 1972), in its analysis. Baldt stood for the proposition that articles which are not imported together are precluded from being an entirety, which was the exact situation in regard to the printing press because the parts of the press arrived on two different dates. Overall, Matrix’s reliance on the value of the pipetting and nozzle heads to argue that the assemblies do not have the essential character of complete liquid dispensing systems is misplaced. The cost or value of the imported merchandise may be relevant to the extent that it validates the role of the imported component in relation to the overall function of the completed article. See HQ 967390, dated April 1, 2005 (Explaining that the cost or value of a component in comparison to the cost or value of a complete article is a relevant factor for determining whether a component imparts the essential character in a GRI 3(b) context). However, in Matrix’s case here, which is a GRI 2(a) essential character analysis and not a GRI 3(b) analysis, the assemblies have undergone sufficient manufacturing so as to have obtained the essential character of liquid dispensing machines. Accordingly, in Matrix’s case, further consideration of the value of the pipetting and nozzle heads which were not yet installed into the assemblies at the time of importation, is not required. Thus, HQ 954820 is not persuasive in Matrix’s situation. Matrix also cites NY L84615, dated May 25, 2005, as an analogous situation where merchandise was imported as an assembly that required additional parts to be installed post-importation. The articles at issue were two automatic data processing (“ADP”) system base server units (“server assemblies”). Essentially, the server assemblies were imported partially complete in a metal-framed housing, power supply, various circuit boards and internal circuitry, fans, cables, and non-removable memory. The server assemblies were not imported with the central processing unit (“CPU”) installed. The CPU and operating system software would be installed post-importation. Based on the 2005 Legal Note 5(A)(a) to Chapter 84, HTSUS, defining what constitutes a complete ADP machine, CBP determined that the essential character of an ADP machine was the ability to perform critical processing functions and that the CPU is the part that provides this ability. Because the server assemblies were not imported with the CPU’s installed, they did not possess the essential character of a complete ADP machine and thus were classifiable as parts of ADP machines and not as complete articles. Matrix asserts that the pipetting heads and nozzle heads are similar to the CPU in that they are the heart of the imported Platemate and Wellmate assemblies. However, NY L84615 is not applicable in the instant case. The abilities and functions that define the essential character of an ADP machine are explicitly provided for in the legal note of chapter 84, HTSUS. The functional qualities of ADP machines were specifically defined in the HTSUS, while there is no equivalent section, chapter, general, or explanatory notes in the HTSUS that defines the abilities and functions for pipetting or liquid dispensing systems. Because the essential character of the ADP machine was explicitly defined in the HTSUS, further analysis of whether the incomplete imported ADP assemblies had the essential character of a complete article was not necessary. In the alternative, Matrix asserts that a complete Wellmate machine should be classified under heading 8424, HTSUS, as a “[m]echanical appliances (whether or not hand-operated) for projecting, dispersing or spraying liquids or powders; fire extinguishers, whether or not charged; spray guns and similar appliances; steam or sand blasting machines and similar jet projecting machines; parts thereof.” Matrix based its assertion on NY N035872, dated August 20, 2008, where CBP classified four bench-top liquid dispensing machines that used a pipetting system which, as described in the ruling, could aspirate and dispense liquids at different volumes. CBP revoked this ruling on January 31, 2012. See HQ H103965. The function of dispensing a liquid that pipetting and other similar liquid dispensing systems perform, such as the nozzle heads in the Wellmate machine, is a function encompassed by heading 8479, HTSUS, and not heading 8424, HTSUS. As explained in HQ H103965, the definition of disperse is to spread or distribute widely from a fixed or constant source, to scatter, to distribute more or less evenly throughout a medium while the definition of dispense is to deal out in portions. Thus, a machine that takes a pre-selected fixed volume from a larger reservoir of liquid and then transfers that smaller fixed volume to a different receiving receptacle, such as a vial tray, clearly performs the function of dispensing and not dispersing. Furthermore, CBP has consistently classified pipetting and other similar systems that aspirate and dispense liquids under heading 8479. See Rainin Instrument. See also NY L80994; NY J87394, dated August 8, 2003 (classifying an electronic pipetting machine under heading 8479); and HQ 957301, dated January 18, 1995 (classifying a pipetting machine under heading 8479). Thus, heading 8424, HTSUS, is not applicable to the articles at issue here. Therefore, the imported Platemate and Wellmate assemblies are considered complete articles as imported and are classified under the specific subheading of 8479.89.98, HTSUS, as “[m]achines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: [o]ther: [o]ther.” HOLDING: Pursuant to GRI 1 and GRI 2(a), the Platemate and Wellmate assemblies are classified under subheading 8479.89.98, HTSUS, as “[m]achines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: [o]ther: [o]ther”. The column one, rate of duty, is 2.5 percent 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 on the World Wide Web at www.usitc.gov/tata/hts/. You are to mail this decision to the internal advice requestor no later than sixty days from the date of the decision. At that time, Regulations and Rulings of the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution. Sincerely, Myles B. Harmon, Director Commercial and Trade Facilitation Division