CLA-2 CO:R:C:M 951797 MBR

Joe A. Dahm
Therm Technology Corporation
2879 Remico
Grandville, Michigan
49418

RE: Automotive Burglar Alarm Systems; Incomplete; Essential Character

Dear Mr. Dahm:

This is in response to your letter of March 25, 1992, on behalf of the Therm Technology Corporation, regarding the classification of an incomplete automotive burglar alarm system, imported from Hong Kong, under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The instant merchandise consists of an incomplete automotive burglar alarm. The importation consists of a printed circuit board with microcomputer chips, diodes, capacitors, relays, transistors, and amplifiers. After importation the following will be added: wiring, a switch, terminals, an instruction sheet, and packaging. The system operates by sensing a change in the electrical current usage from the battery, which would be caused by opening a door and triggering the dome light, starting the car, or turning on the radio.

ISSUE:

What is the classification of an incomplete automotive burglar alarm consisting of a printed circuit board containing all of the necessary electronics, under the Harmonized Tariff Schedule of the United States (HTSUS)?

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LAW AND ANALYSIS:

The General Rules of Interpretation (GRIs) to the HTSUSA govern the classification of goods in the tariff schedule. GRI 1 states, in pertinent part:

...classification shall be determined according to the terms of the headings and any relative section or chapter notes...

The alarm system component is prima facie classifiable under the following headings/subheadings:

8531 Electric sound or visual signalling apparatus (for example, bells, sirens, indicator panels, burglar or fire alarms), other than those of heading 8512 or 8530; parts thereof:

* * * * * * * * * * * * *

8531.10.00 Burglar or fire alarms and similar apparatus.

* * * * * * * * * * * * *

8531.90.00 Parts

* * * * * * * * * * * * *

8537 Boards, panels (including numerical control panels), consoles, desks, cabinets and other bases equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity, including those incorporating instruments or apparatus of chapter 90, other than switching apparatus of heading 8517:

* * * * * * * * * * * * *

8537.10.00 For a voltage not exceeding 1,000 v

* * * * * * * * * * * * *

In HQ 088595 (September 12, 1991), HQ 087876 (December 27 1991), HQ 086460 (July 18, 1990), and HQ 071612 (July 25, 1985), Customs addressed the classification of the central components of a burglar alarm system. In those decisions we stated:

In HQ Ruling 071612 (July 25, 1985), the central components of a burglar alarm system were entered without the remote sensors, bells and sirens. Various indicator light panels were incorporated in the front of each component. The merchandise was found to be "more than" control panels and was classified as burglar alarms and parts thereof in item 685.70.

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HQ Ruling 071612 found that the articles were more than control panels because they incorporated a substantial proportion of the operating part of the machine controlled, and in fact were the very essence of the burglar alarm systems.

Like the burglar alarm components in HQ Ruling 071612, the fire alarm components under consideration (in HQ 086460 dated July 18, 1990) incorporate a substantial proportion of the operating part of the machine controlled. The articles incorporate the power supply for the remote sensors and alarms controlled. The central cabinets of all three models incorporate indicator light panels. The Basic Integrated System includes an amplifier which provides a speaker source for various alarm messages. The Basic Multiplex System incorporates a Serial Link Controller which interfaces the system's CPU and emergency Satellite communicator (ESAC).

Therefore, we held that the "Edwards 8500" series fire alarm systems, when entered without the remote sensors and sound signalling apparatus, were classified as "[b]ells, sirens, indicator panels, burglar and fire alarms...and parts thereof" in item 685.70, TSUS.

Furthermore, in HQ 088464, dated September 11, 1991, we addressed the scope of heading 8537. Heading 8537, HTSUSA, provides for "[b]oards, panels . . . consoles, desks, cabinets and other bases, equipped with two or more apparatus of heading 8535 or 8536, for electric control or the distribution of electricity . . ." In HQ 088595, and HQ 088464, we held that these systems did not satisfy this description. We stated:

It is not used merely for the electric control or the distribution of electricity. As discussed above, the system is used to perform multiple tasks described in heading 8471, HTSUSA (and 8531, HTSUSA). Accordingly, the subject system does not satisfy the terms of this heading and is not properly classifiable therein.

In the instant case, the imported component is electronically complete and contains microcomputer chips which are the heart of the system since they detect the minute variations in electrical current and trigger the alarm.

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) to heading 8537, HTSUS, page 1391, describe: "Programmable controllers" which are digital apparatus using a programmable memory for the storage of instructions for implementing specific functions such as logic, sequencing, timing, counting and arithmetic, to control, through digital or analog input/output modules, various types of machines."

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However, as in HQ 088464, the instant merchandise is not merely a programmable controller. Furthermore, the automotive burglar alarm component is not "programmable through digital or analog input/output modules."

The instant automotive alarm system component is not complete at importation. Therefore, reference must be made to GRI 2(a), which states:

2. (a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.

The ENs to Section XVI, chapter 85 (which include heading 8537, HTSUS), further delineate the following, page 1132:

(IV) Incomplete Machines

Throughout the section any reference to a machine or apparatus covers not only the complete machine, but also an incomplete machine (i.e., an assembly of parts so far advanced that it already has the main essential features of the complete machine). Thus a machine lacking only a flywheel, a bed plate, calendar rolls, tool holders, etc., is classified in the same heading as the machine, and not in any separate heading providing for parts. Similarly a machine or apparatus normally incorporating an electric motor (e.g., electro-mechanical hand tools of heading 85.08) is classified in the same heading as the corresponding complete machine even if presented without that motor.

Therefore, it is Customs position that the instant automotive burglar alarm system component has the main essential features of the complete machine, and consequently, meets the terms of subheading 8531.10.00, HTSUS, which provides for: "[b]urglar or fire alarms and similar apparatus."

HOLDING:

The instant automotive burglar alarm system component meets the terms of subheading 8531.10.00, HTSUS, which provides for:

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"[e]lectric sound or visual signaling apparatus...: [b]urglar or fire alarms and similar apparatus." The rate of duty is 2.7% ad valorem.

Sincerely,

John Durant, Director