Request for Reconsideration of NY N301192; Tariff Classification of a Specdrum

U.S. Customs and Border Protection HQ H302137 March 31, 2020 OT:RR:CTF:EMAIN: H302137 PF CATEGORY: Classification TARIFF NO.: 8543.70.99 John B. Brew Crowell & Morning L.L.P. 1001 Pennsylvania Avenue, N.W. Washington, D.C. 20004 Re: Request for Reconsideration of NY N301192; Tariff Classification of a Specdrum Dear Mr. Brew: This is in response to your letter, dated December 7, 2018, submitted on behalf of Sphero, Inc. (“Sphero”) requesting reconsideration of New York Ruling Letter (“NY”) N301192 (“reconsideration request”). NY N301192 involved the classification of a Specdrum product under the Harmonized Tariff Schedule of the United States (“HTSUS”). Upon review of NY N301192, we have determined the ruling to be correct. We are accordingly affirming the ruling. In reaching this decision, we have considered arguments presented in the reconsideration request and during an April 25, 2019 meeting and a supplemental submission received on June 3, 2019. Our decision is also based on our inspection of a product sample included with your reconsideration request. NY N301192 provides the following description of the Specdrum: [T]he Specdrum . . . is described as a plastic ring consisting of a rechargeable lithium polymer battery, a printed circuit board assembly, two LED lights (one white for the color sensor system and one RGB mix), and various sensors. The battery is charged via a micro USB charging port on the side of the ring. What you describe as sensors include an accelerometer, which is used to detect taps and velocity, and a color sensor to identify the color of a tapped surface. The PCBA processor handles the functionality of all sensors, lights, power, and Bluetooth connection to a smartphone, tablet, or personal computer. The Specdrum is shipped in retail packaging containing two Specdrum Rings, a USB charging cable, an accessory audio cable, a mousepad material playing pad, a drawstring cloth carrying case and an envelope with a quick start guide. The ring is intended to be worn on the hand and measures approximately 1 inch in width and height and 0.5 inch in thickness. In use, users would download the Specdrum application (app) for their specific smart device and through the app, they would program certain audio tones and sound effects to be produced corresponding to the color of the tapped surface. As the user taps the surface, the Specdrum identifies the color of the surface and measures the force of the device’s contact with that surface. This data is transmitted to the user’s smart device running the app and plays the sound(s) produced. The PCBA contains a USB port, microprocessor, and Bluetooth antenna. The microprocessor can store 512KB of data on its internal memory and 64KB of data on its internal RAM. The Specdrum and a smartphone, tablet, or personal computer exchange data bi-directionally over the Bluetooth radio. The Specdrum does not contain a speaker or media. The Specdrum is marketed for its ability to detect motion, impact, and color. In your reconsideration request, you assert that the Specdrums “convert the reflected light into an electronic signal, which is sent to the product’s microprocessor.” In addition, you state that the Specdrums receive “color, timing, and force data when the user taps the ring on a colored surface. The timing and force data are received by the accelerometer, which is then received by the microprocessor as an electronic signal.” Moreover, “the color data is received as the wavelengths of the reflected light, which is then received by the microprocessor as an electronic signal.” These electronic signals are processed by the microprocessor on the PCBA into a digital form, which can be understood by a smart phone or computer. In NY N301192, CBP classified the Specdrum in subheading 8543.70.99, HTSUS, which provides for “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; Other machines and apparatus: Other: Other: Other.” You assert that the classification of the Specdrum in subheading 8543.70.99, HTSUS, is incorrect and that the Specdrum is properly classified in subheading 8517.62.00, HTSUS, which provides for, inter alia, “. . . 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) . . . .” You assert that the Specdrum is classified in heading 8517, HTSUS, because it receives and transmits data from a smartphone, tablet or personal computer via a Bluetooth signal. In addition, you rely on Headquarters Ruling (“HQ”) H260060, dated July 14, 2015, where CBP classified a wearable electronic device in the form of a wrist-watch that incorporated, among other things, a radio transceiver that included Bluetooth technology, in heading 8517, HTSUS. Moreover, you cite to several CBP rulings where we classified wearable devices containing Bluetooth capability in heading 8517, HTSUS. We note that the physical characteristics and wireless functions of the Specdrum substantially differ from other wearable devices that CBP classified in heading 8517, HTSUS. See, e.g., HQ H257947, dated July 14, 2015 (Samsung smart watch); HQ H260060, dated July 14, 2015 (Apple smart watch); HQ H265035, dated January 19, 2016 (fitness and data management wrist band); HQ H265038, dated February 23, 2016 (Movado smart watch); HQ H273382, dated January 3, 2017 (fitness trackers); HQ H279898, dated April 5, 2017 (fitness trackers); and HQ H282905, dated April 30, 2018 (Fossil smart watches). The smart watches and fitness devices cited by Sphero provide a greater degree of user interaction with a smart phone. For example, unlike the wearable devices at issue in ruling letters HQ H260060 (the Apple smart watch) and H257947 (the Samsung smart watch), the Specdrum does not have interactive controls that would allow a wearer to view or manipulate data on the rings or on a smart phone. Accordingly, when considering the physical and functional characteristics of the Specdrum compared to other wearable devices classified by CBP in heading 8517, HTSUS, CBP finds that the Specdrum substantially differs from these wearable devices, including the Apple smart watch and Samsung smart watch. Therefore, the analysis contained in ruling letters HQ H260060 and H257947 is not dispositive of the classification of the Specdrum. Likewise, the Bluetooth transceiver of the Specdrum serves to support the functionality of the device, as it transmits data from the Specdrum to a smart phone, tablet or personal computer. However, the Specdrum’s ability to transmit and receive data is not the principal function of this composite product. In particular, the Bluetooth functionality of the Specdrum does not allow the device to communicate with other devices in a wired or wireless network as its core function. Instead, the wireless communication functions of the Specdrum is limited to the collection and bi-directional transmission of activity data from the rings to a mobile device, tablet or personal computer. The Specdrum does not receive, display, or transmit emails, texts, social media updates, or phone calls. In addition, the Specdrum does not run a pre-installed mobile operating system that would enable the device to execute processing programs known as “apps.” The Bluetooth receiver is an ancillary feature of the Specdrum. As a result, the Specdrum’s ability to transmit and receive data does not provide the principal function of this device.   Heading 8543, HTSUS, provides for articles that are electronic machines or apparatus with individual functions, not specified elsewhere in Chapter 85 of the HTSUS. In this regard, we note that EN 85.43, provides in relevant part, the following: This heading covers all electrical appliances and apparatus, not falling in any other heading of this Chapter, nor covered more specifically by a heading of any other Chapter of the Nomenclature, nor excluded by the operation of a Legal Note to Section XVI or to this Chapter. The principal electrical goods covered more specifically by other Chapters are electrical machinery of Chapter 84 and certain instruments and apparatus of Chapter 90. The electrical appliances and apparatus of this heading must have individual functions. The introductory provisions of Explanatory Note to heading 84.79 concerning machines and mechanical appliances having individual functions apply, mutatis mutandis, to the appliances and apparatus of this heading. Based on the foregoing, we find that the Specdrum performs the individual function of directing a primary device (e.g. mobile phone or tablet) to play sound effects. The user programs the various sound effects on their phone, and through interaction with the device (tapping/moving/etc.) the user’s actions are sent to the phone where the application interprets the movement and creates sounds. The Bluetooth transceiver and other sensors housed within the Specdrum contribute to this individual function. The Specdrum is not covered by any other heading in Chapter 85 or elsewhere in the Nomenclature, and therefore is properly classified in heading 8543, HTSUS. Therefore, NY N274720 is affirmed. Accordingly, the Specdrum remains classified in heading 8543, HTSUS, specifically in subheading 8543.70.99, HTSUS, as “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; Other machines and apparatus: Other: Other: Other.” Sincerely, for Craig T. Clark, Director Commercial and Trade Facilitation Division