Protest and Application for Further Review No. 2720-16-100093; Classification of dome network cameras

HQ H276271 June 29, 2017 CLA-2 OT:RR:CTF:TCM H276271 DSR CATEGORY: Classification TARIFF NO.: 8525.80.40 Port Director Los Angeles International Airport U.S. Customs and Border Protection 11099 South La Cienega Blvd. Los Angeles, CA 90045 Attn: Jim Henderson, Import Specialist Re: Protest and Application for Further Review No. 2720-16-100093; Classification of dome network cameras Dear Port Director: The following is our decision regarding the Application for Further Review of Protest No. 2720-16-100093, timely filed on January 21, 2016, on behalf of Hikvision USA Inc. (“Protestant”). In the instant protest, Hikvision contests the classification by U.S. Customs and Border Protection (“CBP”) of dome network security cameras under the Harmonized Tariff Schedule of the United States (“HTSUS”). Our decision as to the proper tariff classification of the subject cameras and to the disposition of the instant protest is set forth below. In reaching this decision, we have taken into account materials included with Hikvision’s protest and supplemental submissions filed November 18, 2016. No samples were provided. FACTS: The instant protest pertains to three network dome cameras, models DS-2CD2532F-IS, DS-2CD2512F-IS, and DS-2DF5286-AE3(B). The subject cameras were incorrectly identified on the invoice as "monitor probes," however, the correct invoice description is “dome network cameras.” These cameras capture and stream high definition ("HD") real-time video and audio to a location outside the cameras for remote displaying or recording. These cameras also have the capability of recording sill images and video images onto an internal micro SD card. The DS-2CD2532F-IS and the DS-2CD2512F-IS are high definition surveillance cameras featuring dual stream capability, on-board recording, night vision, Digital Wide Dynamic Range and 3D Digital Noise Reduction (DNR) image enhancement. These cameras can capture real-time video and simultaneously send two video streams to a remote monitor or recorder. Both IR mini-dome cameras also utilize a progressive scan CMOS sensor and a fixed lens to capture real-time video images. Moreover, the DS-2CD2532F-IS and the DS-2CD2512F-IS each has an integrated micro SD card slot for recording still images and video. The DS-2DF5286-AE3(B) is a dome network surveillance camera that features dual video stream capability and on-board recording. It incorporates a progressive scan CMOS sensor that captures images up to a resolution of 1920 x 1080, with 30X/20X optical zoom and 16X digital zoom. This day/night camera has 3D intelligent positioning with 3D Digital Noise Reduction (DNR) and digital WDR image enhancement. Moreover, it has an integrated micro SD card slot for recording still images and video. The subject cameras were entered under subheading 8525.80.50, HTSUS, which provides for “Television cameras, digital cameras and video camera recorders: Television cameras, digital cameras and video camera recorders: Other.” CBP liquidated the subject cameras in subheading 8525.80.30, HTSUS, which provides for "Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; Television cameras, digital cameras and video camera recorders: Television cameras: Other." Protestant asserts that the cameras are instead classified in subheading 8525.80.40, HTSUS, which provides for "Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; Television cameras, digital cameras and video camera recorders: Digital still image video cameras.” ISSUE: What is the proper classification under the HTSUS of the subject dome network cameras? LAW AND ANALYSIS: Initially, we note that the matter is protestable under 19 U.S.C. §1514(a)(2) as a decision on classification. The protest was timely filed within 180 days of liquidation of the first entry. See Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, §2103(2)(B) (ii), (iii), codified as amended at 19 U.S.C. §1514(c)(3)(2006). Further Review of Protest No. 2720-16-100093 is properly accorded to Protestant pursuant to 19 C.F.R. 174.24(a), to the extent that this Protest involves questions of fact that have not been ruled upon by the Commissioner of CBP or any CBP Headquarters official, or by the Customs courts – specifically the proper classification of the subject cameras in light of the Court of International Trade's decision in Sony Electronics, Inc., v. United States, 35 lnt'I Trade Rep. (SNA) 2395 (Ct. lnt'I Trade Dec. 23, 2013). Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes. GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in their appropriate order. The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System and are generally indicative of the proper interpretation of the heading. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989). The HTSUS provisions under consideration are as follows: 8525 Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras, digital cameras and video camera recorders: * * * 8525.80 Television cameras, digital cameras and video camera recorders: * * * 8525.80.30 Television cameras: Other 8525.80.40 Digital still image video cameras 8525.80.50 Other * * * * Note 3 to Section XVI, HTSUS, in which heading 8525 is located, provides as follows: Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function. There is no dispute that the multifunction cameras are correctly classified in subheading 8525.80, HTSUS, because that subheading provides for television cameras, digital cameras and video camera recorders, and the cameras at issue can function as all three types. At issue is the proper eight digit national tariff rate. Accordingly, GRI 6 is implicated. Because the classification of the subject cameras involves an analysis beyond the four-digit heading level, GRI 6 is implicated. GRI 6 states: For legal purposes, the classification of goods in the subheading of a heading shall be determined according to the terms of those subheadings and any related subheading notes, and mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter, and subchapter notes also apply, unless the context otherwise requires. EN 85.25(B) provides for Television Cameras, Digital Cameras and Video Camera Recorders. Therein it states: This group covers cameras that capture images and convert them into an electronic signal that is: Transmitted as a video image to a location outside the camera for viewing or remote recording (i.e., television cameras); or Recorded in the camera as a still image or as a motion picture (i.e., digital cameras and video camera recorders). Television cameras ... [include] (e.g., television cameras for television studios or for reporting, those used for industrial or scientific purposes, in closed circuit television (surveillance) or for supervising traffic). These cameras do not have any inbuilt capability of recording images. In digital cameras and video camera recorders, images are recorded onto an internal storage device or onto media (e.g., magnetic tape, optical media, semiconductor media or other media of heading 85.23). They may include an analogue/digital converter (ADC) and an output terminal which provides the means to send images to units of automatic data processing machines, printers, televisions or other viewing machines. In Sony, supra, the CIT held that the proper classification of the Sony "NSCGCI Net-Sharing Cam" is in subheading 8525.80.40, HTSUS (2007), as a "digital still image video camera." The Sony camera was a "Handycam," e.g. handheld, personal device capable of capturing still images at five different resolutions and moving images (video) at two resolutions at several different frames per second rates. The camera recorded the images digitally, saving still images in .jpg format and moving images in .mp4 format. Hence, after considering all of the camera’s functions and the scope of subheading 8525.80.40, HTSUS, CBP concluded that the instant cameras meet the scope of subheading 8525.80.40, HTSUS, which provides, in pertinent part, for “digital still image video cameras.” The subject cameras capture images in "real time" and transmit the images to a location outside the cameras for viewing or remote recording. Additionally, they also have the ability to record still and moving images inside the cameras onto micro SD memory cards. As the subject cameras perform functions that are covered by subheadings 8525.80.30, HTSUS and 8525.80.40, HTSUS, they are multifunctional cameras designed for the purpose of performing two or more complementary or alternative functions and are composite machines that are classified according the cameras’ principal functions pursuant to Section XVI, Note 3, HTSUS. With regard to multi-function machines, the General ENs to Section XVI, HTSUS, provide, in pertinent part: (VI) MULTI-FUNCTION MACHINES AND COMPOSITE MACHINES (Section Note 3) In general, multi-function machines are classified according to the principal function of the machine. Where it is not possible to determine the principal function, and where, as provided in Note 3 to the Section, the context does not otherwise require, it is necessary to apply General Interpretative Rule 3(c). GRI 3 (c) states, in pertinent part, when goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration. The instant cameras contain no features that predominate over any other features. As such, we are unable to determine the principal functions of the cameras. Applying GRI 3(c), as per the General EN to Section XVI above, we find that the subject dome network cameras are classified under subheading 8525.80.40, HTSUS, as “digital still image video cameras.” HOLDING: By application of GRIs 1 and 6, and Note 3 to Section XVI, HTSUS, the subject multifunction network dome cameras are classified in heading 8525, HTSUS. They are specifically provided for in subheading 8525.80.40, HTSUS, which provides for “Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras, digital cameras and video camera recorders: Television cameras, digital cameras and video camera recorders: Digital still image video cameras.” The rate of duty is “Free.” 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 internet at www.usitc.gov. You are instructed to GRANT the protest. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision. Sixty days from the date of the decision, the Office International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP website 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