Internal Advice Request 13/013; classification of printed circuit board assemblies

HQ H247306 December 12, 2014 CLA-2 OT:RR:CTF:TCM HQ H247306 TNA CATEGORY: Classification TARIFF NO.: 8504.90.65, 8536.69.40, 9018.19.95 Port Director, Service Port-Seattle U.S. Customs and Border Protection 1000 Second Ave., Suite 2100 Seattle, WA 98104 Attn: Brett Ewing, Supervisory Import Specialist RE: Internal Advice Request 13/013; classification of printed circuit board assemblies Dear Port Director: This is in response to your letter, dated October 1, 2013, forwarding with comments the Request for Internal Advice submitted by counsel on behalf of Spacelabs Healthcare Inc. (“Spacelabs”), on September 5, 2013, concerning the proper classification of printed circuit board assemblies (“PCBAs”) used in patient monitoring systems under the Harmonized Tariff Schedule of the United States (“HTSUS”). FACTS: The subject merchandise consists of five types of PCBAs that are used with patient monitoring systems. These patient monitoring systems are a type of diagnostic medical equipment that measures and monitors patients’ vital signs. The subject PCBAs cannot function unless they are connected to other PCBAs, electrical components, and other devices within the patient monitoring systems with which they are used. Spacelabs is a manufacturer that specializes in medical products such as the patient monitoring systems of which the subject PCBAs are components. Many of these products are used in anesthesia delivery and ventilation, and diagnostic cardiology. Spacelabs only sells its products to hospitals, clinics and physicians’ offices, and does not sell its products to general consumers. The first item at issue is Part Number 670-9033-01, which is the PCBA for a telemetry receiver module. This module is an external power supply for Spacelabs’ products, and it supplies 20 volts of direct current power. Spacelabs’ submitted literature states that “the external power supply provides regulated +20 volt DC power to Spacelabs products. The external power supply shall be powered from AC mains voltage.” This submitted literature did not specify any specific equipment with which this external power supply is used. To the contrary, according to the literature, this power supply is generally bulk packaged for importation, although it can be shipped individually packaged at the vendor’s option. Part Number 670-0933-01 mates to the other circuit boards within the receiver module via multi-pin connectors, and is screwed into the unit assembly inside the receiver module housing. In particular, Part Number 670-0933-01 is the radio frequency circuit board portion of the telemetry receiver module. It contains a 608-614 MHz radio receiver that tunes to match and sync with a specific patient-worn device’s transmitting frequency. The port takes the position that Part Number 670-9033-01 should be classified in subheading 8517.62.00, HTSUS, which provides for “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: 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.” The second item at issue here is Part Number 670-1513-00. This is a PCBA for the Xprezzon patient Monitor System, which is a bedside monitor that monitors a patient’s vital signs. This monitoring system provides interactive viewing, reviewing, and recording capabilities for parameters, trends and calculations for any monitored patient. Part Number 670-1513-00 routes power to the central processing unit (“CPU”) board from an external power supply. It also routes the synchronous data link control signals from the CPU board to a backplane PCBA, and provides external USB and DSB connection through an on-board USB host controller. Part Number 670-1513-00 also connects to an on/off switch board, providing a switch input to turn the patient monitoring system off. Part Number 670-1513-00 does not act as a power source by itself and only functions as a router to the power source and other PCBAs. The port takes the position that Part Number 670-1513-00 is classified in subheading 8504.40.95, HTSUS, which provides for “Electrical transformers, static converters (for example, rectifiers) and inductors; parts thereof: Static converters: Other.” The third item at issue here is Part Number 670-1274-05, the CPU PCBA for Spacelabs’ Ultraview Telemetry Patient Monitor, a portable patient monitor that allows medical personnel to monitor a patient’s vital signs from a distance. Part Number 670-1274-05 is screwed into the chassis housing and attached to electrical connectors. It runs the system software, updates the display, and communicates with peripheral devices. The port takes the position that Part Number 670-1274-05 is classified in subheading 8471.90.00, HTSUS, which provides for “Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included: Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included: Other.” The fourth item at issue here is Part Number 670-1488-00, another PCBA for the Xprezzon patient Monitor System. Part Number 670-1488-00 is the CPU printed circuit board for this system. It is screwed into the chassis housing of the patient monitoring system and attached via electrical system connectors. Part Number 670-1488-00 runs the system software, updates the display, and communicates with peripheral devices through the synchronous data link control PCBAs within the patient monitor. The port takes the position that Part Number 670-1488-00 is classified in subheading 8471.90.00, HTSUS, which provides for “Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included: Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included: Other.” The fifth item at issue here is Part Number 670-1310-00, which is a PCBA for Spacelabs’ Ultraview Command Module, the CPU for Spacelabs’ Ultraview SL line of Patient Monitors. Part Number 670-1310-00 provides standard cable connection to the patient monitoring system modules on one end, while providing the signal processing electronics connections to the command module on the other end. The port takes the view that Part Number 670-1310-00 is classified in subheading 8536.69.40, HTSUS, which provides for “Electrical apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits (for example, switches, relays, fuses, surge suppressors, plugs, sockets, lamp-holders and other connectors, junction boxes), for a voltage not exceeding 1,000 V; connectors for optical fibers, optical fiber bundles or cables: Lamp-holders, plugs and sockets: Other: Coaxial connectors; cylindrical multicontact connectors; rack and panel connectors; printed circuit connectors; ribbon or flat cable connectors.” Spacelabs takes the position that all of the PCBAs at issue here should be classified in subheading 9018.19.75, HTSUS, which provides for “Instruments and appliances used in medical, surgical, dental or veterinary sciences, including scintigraphic apparatus, other electro-medical apparatus and sight-testing instruments; parts and accessories thereof: Electro-diagnostic apparatus (including apparatus for functional exploratory examination or for checking physiological parameters); parts and accessories thereof: Other: Other: Printed circuit assemblies for parameter acquisition modules.” ISSUE: Where are the subject printed circuit board assemblies classified? LAW AND ANALYSIS: Classification under the HTSUS is made 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. 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, GRIs 2 through 6 may then be applied in order. The HTSUS provisions under consideration are as follows: 8471 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included: 8504 Electrical transformers, static converters (for example, rectifiers) and inductors; parts thereof: 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: 8536 Electrical apparatus for switching or protecting electrical circuits, or for making connections to or in electrical circuits (for example, switches, relays, fuses, surge suppressors, plugs, sockets, lamp-holders and other connectors, junction boxes), for a voltage not exceeding 1,000 V; connectors for optical fibers, optical fiber bundles or cables: 9018 Instruments and appliances used in medical, surgical, dental or veterinary sciences, including scintigraphic apparatus, other electro-medical apparatus and sight-testing instruments; parts and accessories thereof: Note 1(m) to Section XVI, HTSUS, which consists of Chapters 84 and 85, HTSUS, states, in pertinent part, the following: This section does not cover:… Articles of chapter 90 Note 2 to Section XVI, HTSUS, states the following: Subject to note 1 to this section, note 1 to chapter 84 and to note 1 to chapter 85, parts of machines (not being parts of the articles of heading 8484, 8544, 8545, 8546 or 8547) are to be classified according to the following rules: Parts which are goods included in any of the headings of chapter 84 or 85 (other than headings 8409, 8431, 8448, 8466, 8473, 8487, 8503, 8522, 8529, 8538 and 8548) are in all cases to be classified in their respective headings; Other parts, if suitable for use solely or principally with a particular kind of machine, or with a number of machines of the same heading (including a machine of heading 8479 or 8543) are to be classified with the machines of that kind or in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate. However, parts which are equally suitable for use principally with the goods of headings 8517 and 8525 to 8528 are to be classified in heading 8517; All other parts are to be classified in heading 8409, 8431, 8448, 8466, 8473, 8503, 8522, 8529 or 8538 as appropriate or, failing that, in heading 8487 or 8548 Note 5 to Chapter 84, HTSSU, provides, in pertinent part, the following: For the purposes of heading 8471, the expression “automatic data processing machines” means machines capable of: Storing the processing program or programs and at least the dat immediately necessary for the execution of the program; (ii) Being freely programmed in accordance with the requirements of the user; (iii) Performing arithmetical computations specified by the user; and (iv) Executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run. Note 2 to Chapter 90, HTSUS, provides the following: Subject to note 1 above, parts and accessories for machines, apparatus, instruments or articles of this chapter are to be classified according to the following rules: Parts and accessories which are goods included in any of the headings of this chapter or of chapter 84, 85 or 91 (other than heading 8487, 8548 or 9033) are in all cases to be classified in their respective headings; Other parts and accessories, if suitable for use solely or principally with a particular kind of machine, instrument or apparatus, or with a number of machines, instruments or apparatus of the same heading (including a machine, instrument or apparatus of heading 9010, 9013 or 9031) are to be classified with the machines, instruments or apparatus of that kind; (c) All other parts and accessories are to be classified in heading 9033. The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While not legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127 (Aug. 23, 1989). The EN to heading 8471, HTSUS, provides, in pertinent part, the following: (I) AUTOMATIC DATA PROCESSING MACHINES AND UNITS THEREOF Data processing is the handling of information of all kinds, in pre-established logical sequences and for a specific purpose or purposes. Automatic data processing machines are machines which, by logically interrelated operations performed in accordance with pre-established instructions (program), furnish data which can be used as such or, in some cases, serve in turn as data for other data processing operations. This heading covers data processing machines in which the logical sequences of the operations can be changed from one job to another, and in which the operation can be automatic, that is to say with no manual intervention for the duration of the task. These machines mostly use electronic signals but may also use other technologies. They may be self-contained, all the elements required for data processing being combined in the same housing, or they may be in the form of systems consisting of a variable number of separate units. This heading also covers separately presented constituent units of automatic data processing systems described above. However, the heading excludes machines, instruments or apparatus incorporating or working in conjunction with an automatic data processing machine and performing a specific function. Such machines, instruments or apparatus are classified in the headings appropriate to their respective functions or, failing that, in residual headings (See Part (E) of the General Explanatory Note to this Chapter). The EN to heading 8504, HTSUS, provides, in pertinent part, the following: (II) ELECTRICAL STATIC CONVERTERS The apparatus of this group are used to convert electrical energy in order to adapt it for further use. They incorporate converting elements (e.g., valves) of different types. They may also incorporate various auxiliary devices (e.g., transformers, induction coils, resistors, command regulators, etc.). Their operation is based on the principle that the converting elements act alternately as conductors and non-conductors. The fact that these apparatus often incorporate auxiliary circuits to regulate the voltage of the emerging current does not affect their classification in this group, nor does the fact that they are sometimes referred to as voltage or current regulators. This group includes: (A) Rectifiers by which alternating current (single or polyphase) is converted to direct current, generally accompanied by a voltage change. (B) Inverters by which direct current is converted to alternating current. (C) Alternating current converters and cycle converters by which alternating current (single or polyphase) is converted to a different frequency or voltage. (D) Direct current converters by which direct current is converted to a different voltage. … Electrical static converters may be used for different purposes, e.g.: (1) Converters to supply electricity to drive stationary machines or electric traction vehicles (e.g., locomotives). (2) Supply converters, such as accumulator chargers (which consist essentially of rectifiers with associated transformer and current control apparatus), converters for galvanising and electrolysis, emergency power packs, converters for installations which supply high-tension direct current, converters for heating purposes and for the current supply to electro-magnets. The EN to heading 8517, HTSUS, provides, 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 electro-magnetic 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…. The EN to heading 8536, HTSUS, provides, in pertinent part, the following: This heading covers electrical apparatus for a voltage not exceeding 1,000 volts generally used for dwellings or industrial equipment. However, heading 85.35 covers the apparatus described below for a voltage exceeding 1,000 volts. This heading also covers connectors for optical fibres, optical fibre bundles or cables. The heading includes:… (III) APPARATUS FOR MAKING CONNECTIONS TO OR IN ELECTRICAL CIRCUITS This apparatus is used to connect together the various parts of an electrical circuit. It includes:… (B) Other connectors, terminals, terminal strips, etc. These include small squares of insulating material fitted with electrical connectors (dominoes), terminals which are metal parts intended for the reception of conductors, and small metal parts designed to be fitted on the end of electrical wiring to facilitate electrical connection (spade terminals, crocodile clips, etc.). Terminal strips consist of strips of insulating material fitted with a number of metal terminals or connectors to which electrical wiring can be fixed. The heading also covers tag strips or panels; these consist of a number of metal tags set in insulating material so that electrical wires can be soldered to them. Tag strips are used in radio or other electrical apparatus. The EN to heading 9018, HTSUS, provides, in pertinent part, the following: This heading covers a very wide range of instruments and appliances which, in the vast majority of cases, are used only in professional practice (e.g., by doctors, surgeons, dentists, veterinary surgeons, midwives), either to make a diagnosis, to prevent or treat an illness or to operate, etc. Instruments and appliances for anatomical or autoptic work, dissection, etc., are also included, as are, under certain conditions, instruments and appliances for dental laboratories (see Part (II) below). The instruments of the heading may be made of any material (including precious metals)… The instruments and appliances classified here may be equipped with optical devices; they may also make use of electricity, either as motive power or for transmission, or as a preventive, curative or diagnostic agent…. (V) OTHER ELECTRO-MEDICAL APPARATUS This heading also covers electro-medical apparatus for pre