CLA-2 CO:R:C:M 953313 MBR

Mr. Douglas M. McNeill
Sharp Microelectronics Technology, Inc.
5700 NW Pacific Rim Boulevard
Camas, Washington 98607

RE: Sharp Microelectronics Technology, Inc.; Liquid Crystal Display; LCD; ADP Output Display; Incomplete; Unassembled; 8531; 8471; 9013; HQ 952246; HQ 951609; HQ 951288; HQ 952360; E.M. Chemicals v. United States

Dear Mr. McNeill:

This is our reply to your letter of January 12, 1993, on behalf of Sharp Microelectronics Technology, Inc. ("Sharp"), requesting classification of incomplete, unassembled Liquid Crystal Displays (LCDs) for ADP output units, under the Harmonized Tariff Schedule of the United States (HTSUS).


The instant importation is incomplete (missing only the bezel and screws) and unassembled. It consists of the following components for an automatic data processing machine (ADP) flat panel display: 1) a passive matrix LCD crystal cell; 2) Large Scale Integration (LSI) chips (20 or 21 depending on the LCD); 3) printed wiring boards; 4) two jumper connectors.

After importation, the components are assembled with a bezel made of plastic or metal. The assembly process in the U.S. requires three simple steps using solder and heat sensitive tape.

The merchandise will not be shipped in "kits." However, each importation will consist of the components for 1200 display units. The components of each shipment are intended for assembly to each other, and are not bulk shipments of inventory parts.



Are the instant LCD ADP output modules classified under heading 8531, HTSUS, which provides for electric sound or visual signaling apparatus, or under heading 8471, HTSUS, which provides for ADP output devices, or under heading 9013, HTSUS, which provides for liquid crystal devices?


The General Rules of Interpretation (GRI's) to the HTSUS 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...

Liquid crystal displays (LCDs) are prima facie classifiable under the following subheadings:

8531 Electric sound or visual signaling apparatus (for example, bells, sirens, indicator panels...

8531.20.00 Indicator panels incorporating liquid crystal devices (LCD's) or light emitting diodes (LED's)

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

9013 Liquid crystal devices not constituting articles provided for more specifically in other headings

9013.80.60 Other devices, appliances and instruments: Other

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

8471 Automatic data processing machines and units thereof

8471.92.80 Other: Input or output units...: Other: Other: Units suitable for physical incorporation into automatic data processing machines or units thereof

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

Heading 8531, HTSUS, provides for electric sound or visual signaling apparatus. Therefore, to be classifiable in this heading, the apparatus must be designed for "signaling." Therefore, only those LCDs which are limited by design and function to that of "signaling," are classifiable in heading 8531, HTSUS.

E.M. Chemicals v. United States, Appeal No. 90-1141, Cust. Bul. Vol. 24, No. 51, (1990), 13 CIT 849, 728 F. Supp. 723 (1989), held that under the TSUS, liquid crystals were classifiable under


item 685.70 (the predecessor provision to heading 8531, HTSUS). However, there has been a significant change in the relevant tariff provisions under the HTSUS. In fact, heading 9013, HTSUS, which provides for LCDs specifically, is a new provision under the HTSUS. Furthermore, LCDs have been technologically developed for a myriad of uses, many of which cannot be said to be for "signaling apparatus."

Automatic Data Processing machine LCD flat panel displays (laptop and notebook computer displays) typically exhibit the following characteristics: a pixel configuration of 640 X 480, a dot pitch of from .27 to .30mm, a thin profile, light weight, a specific liquid crystal material mix (150 to 200 milliseconds response time signal to signal), and low power consumption (5V).

Due to the specific ADP design of the instant importation (640 x 480 pixel configuration, dot pitch of 0.27, response time, light weight, profile, etc.), and principal use of these Sharp LCD modules for ADP output, they cannot be classified under heading 8531, which provides for "signalling apparatus." See HQ 951288, dated July 7, 1992, for a protest decision regarding Epson LCDs.

The instant LCD components will be imported without the bezel, which is in essence a frame which provides support and protection for the LCD. However, the bezel is not necessary for the LCD to function. All of the necessary electronics for the LCD are imported in the same shipment. GRI 2(a) provides guidance for the classification of incomplete and unfinished articles. It states, in pertinent part:

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.... The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) to the HTSUS, regarding GRI 2(a), state in pertinent part as follows:

(V) The second part of Rule 2 (a) provides that complete or finished articles presented unassembled or disassembled are to be classified in the same heading as the assembled article. When goods are so presented, it is usually for reasons such as requirements or convenience of packing, handling or transport. (Emphasis added).

(VI) This Rule also applies to incomplete or unfinished articles presented unassembled or disassembled provided that they are to be treated as complete or


finished articles by virtue of the first part of this Rule.

(VII) For the purposes of this Rule, "articles presented unassembled or disassembled" means articles the components of which are to be assembled either by means of simple fixing devices (screws, nuts, bolts, etc.) or by riveting or welding, for example, provided only simple assembly operations are involved.

Unassembled components of an article which are in excess of the number required for that article when complete are to be classified separately.

The importer states that these components are shipped unassembled to avoid what would otherwise be a high damage rate. Therefore, it can be said that these displays are presented unassembled for the convenience of "packing, handling or transport." Furthermore, the displays are completed with only the addition of the bezel and some screws ("fixing devices"), requiring only simple assembly operations.

Therefore, pursuant to GRI 2(a), it is Customs position that an importation in this configuration has the essential character of 1200 finished or complete ADP LCDs, which are classifiable under subheading 8471.92.30, HTSUS, which provides for ADP output display units without cathode-ray tube (CRT), having a visual display diagonal not exceeding 30.5 cm. See HQ 951609, dated October 20, 1992, for a decision regarding ADP LCD glass sandwiches, which were not classifiable as unfinished ADP output units because they lacked the essential character of the finished display. For other rulings regarding LCDs, see HQ 952246, dated November 10, 1992, HQ 951868, dated October 31, 1992, HQ 952360, dated October 15, 1992, and HQ 951288, dated July 7, 1992.

A question has arisen regarding the interpretation of HQ 951511, dated June 1, 1992, regarding the classification of unassembled articles imported in different containers. However, HQ 951511 still requires that the articles to be considered together as an unassembled good are entered in the same importation. Therefore, they do not have to be in the same container, box, crate, kit, etc., but only in the same importation. Furthermore, Customs has consistently held that bulk shipments of inventory are not to be considered unassembled goods, even if it would be possible to assemble them together into one or more articles.

Section XVI, Legal Note 1(m) states that: "[t]his section does not cover: [a]rticles of chapter 90." Heading 9013, HTSUS, provides for: "[l]iquid crystal devices not constituting articles provided for more specifically in other headings." Therefore,


since the Sharp ADP LCD Modules are provided for more specifically in another heading, they are not to be classifiable in heading 9013, HTSUS.

Therefore, generally speaking, unless a principal use for signalling (heading 8531, HTSUS), or principal use as an ADP output unit (heading 8471, HTSUS) can be established satisfactorily either by design limitation or other reliable means, LCD displays are classifiable in subheading 9013.80.60, HTSUS, which provides for: "[l]iquid crystal devices not constituting articles provided for more specifically in other headings: [o]ther devices, appliances and instruments: [o]ther."


The Sharp Microelectronics Technology, Inc., unfinished, unassembled, liquid crystal display modules for ADP output displays are classifiable in subheading 8471.92.30, HTSUS, which provides for: "[a]utomatic data processing machines and units thereof: [o]ther: [i]nput or output units, whether or not entered with the rest of a system and whether or not containing storage units in the same housing: [o]ther: [d]isplay units: [w]ithout cathode-ray tube (CRT), having a visual display diagonal not exceeding 30.5 cm." The rate of duty is Free.


John Durant, Director