The tariff classification of a "smart card" from China.

N083108 December 3, 2009 CLA-2-85:OT:RR:NC:1:108 CATEGORY: Classification TARIFF NO.: 8523.52.00 Mr. Gregory Lee Peebles Maxim Integrated Products 4401 S. Beltwood Parkway Dallas, TX 75244 RE: The tariff classification of a “smart card” from China. Dear Mr. Peebles: In your letter dated October 23, 2009, you requested a tariff classification ruling. Sample is being returned as requested. The subject merchandise, based on the submitted information and sample, is a type of “smart card” (a semiconductor medium) that encases an integrated chip (IC) with a 1024-bit EEPROM, as well as a copper coil functioning as an antenna. This device is designed to be presented to a host RFID reader, which can simply read a unique ID number or perform an optional SHA-1 (Secure Hash Algorithm) authentication sequence with the device (the “smart card”) in question. It is stated that the subject “smart card” is to be used for building/garage access control, authentication purposes, or tracking of merchandise through the supply chain or on store shelves. It is suggested that this merchandise be properly classified under subheading 8542.32.0050, Harmonized Tariff Schedule of the United States, HTSUS, which provides for Electronic integrated circuits; parts thereof: Electronic integrated circuits: Memories: Electrically erasable programmable read-only memory (EEPROM). However, Legal Note 8 to Chapter 85 reads in part: “For the classification of the articles defined in this note, headings 8541 and 8542 shall take precedence over any other heading in the Nomenclature, except in the case of heading 8523, which might cover them by reference to, in particular, their function.” Moreover, Legal Note 4 (b) to Chapter 85 reads: “The term ‘smart cards’ means cards which have embedded in them one or more electronic integrated circuits (a microprocessor, random access memory (RAM) or read-only memory (ROM) in the form of chips. These cards may contain contacts, a magnetic stripe or an embedded antenna but do not contain any other active or passive circuit elements.” Since this type of semiconductor medium is considered to be a device that functions as a “smart card,” which is covered under heading 8523, HTSUS, classification is found not to be under heading 8542, HTSUS. The applicable subheading for this merchandise will be 8523.52.00, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Disc, tapes, solid-state non-volatile storage devices, "smart cards" and other media for the recording of sound or of other phenomena, whether or not recorded, including matrices and masters for the production of discs, but excluding products of Chapter 37: Semiconductor media: "Smart cards." The rate of duty will be 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 World Wide Web at http://www.usitc.gov/tata/hts/. 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 Lisa Cariello at (646) 733-3014. Sincerely, Robert B. Swierupski Director National Commodity Specialist Division