CLA-2 OT:RR:CTF:TCM H097095 GC
Paul S. Anderson, Esq.
Sonnenberg and Anderson
Attorneys and Counselors at Law
125 South Whacker Drive, Suite 1825
Chicago, Illinois 60606
RE: Tariff classification of the SCT Livewire flash device
Dear Mr. Anderson:
This is in response to your request submitted on February 18, 2010, on behalf of your client SCT, LLC (SCT) for a binding ruling on the classification of the Livewire flash device (also known as a “tuner”) under the Harmonized Tariff Schedule of the United States (HTSUS). In preparation of this ruling, consideration was given to the phone conference with you on June 17, 2010 and your second written submission, dated June 30, 2010.
FACTS:
The instant flash tuner is designed to work with Powertrain Control Modules (PCM) to help the user diagnose potential problems, adjust certain performance settings, and record performance data. It features 128MB of total memory, internal PCB assembly, LCD display, indicator lights, and directional buttons housed in plastic housing with a push/scroll jog wheel. The product is fitted with a USB plug and other connectors that allow it to be mounted in a Ford vehicle.
For tuning purposes, the user may use one of the three pre-loaded performance “tunes”, which adjust the vehicle’s parameters to increase horsepower or torque, or the pre-loaded fuel economy “tune”, which adjusts the vehicle’s parameters to maximize fuel efficiency. The user may also download custom “tunes” onto the Livewire flash device through an authorized SCT dealer or from the SCT website. When the flash tuner uploads the selected “tune” onto the PCM, it backs up the factory settings, thus allowing the user restore the PCM to its original configuration whenever desired.
The flash tuner also reads and stores performance data from the PCM. This allows the user to keep track of the vehicle performance metrics such as horsepower, torque, RPM, quarter-mile elapsed time, and zero-to-sixty time. For diagnostic purposes, the flash tuner is capable of reading, resetting and clearing diagnostic trouble codes that emanate from the PCM. The codes correspond with electronic components throughout the motor vehicle and provide the user with clues as to what may be causing problems with the motor vehicle as he/she communicates with the vehicle manufacturer’s service department.
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative section or chapter notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order. The HTSUS provisions under consideration are as follows:
8517 Telephone sets, including telephones for cellular networks or for other wireless networks; 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), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528; parts thereof:
* * *
9031 Measuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter; profile projectors; parts and accessories thereof:
Initially, you argue that the Livewire flash tuner is properly classifiable as an automatic data processing (ADP) machine of heading 8471, HTSUS. During our phone conference and in your second written submission, you concurred with our position that the merchandise does not meet the terms of heading 8471, HTSUS, as it is not freely programmed in accordance with the requirements of the user as required by Note 5(A)(ii) to Chapter 84, HTSUS. However, in your second written submission, you argue that the merchandise is classified under heading 8517, HTSUS, as other apparatus for the transmission of other data for communication in a wired or wireless network.
In so doing, you cite to three rulings that pertain to merchandise that involve the transmission of data within motor vehicles. In New York Ruling Letter (NY) N094136, dated February 25, 2010, CBP classified the “Key 2 Safe Driving Activator” in heading 8517, HTSUS. It is stated in the ruling that the product did not perform a diagnostic function, but received data from an OBD-II port in the vehicle and then transmitted that data to a cell phone within the vehicle via Bluetooth. In NY N043829, dated December 5, 2008, the “Smart Handle Assembly” was classified under heading 8517, HTSUS. The product functioned as door handle to a vehicle by means of the user pressing the frequency operated button (FOB), which relayed information to the electronic control unit in the vehicle. Lastly, you cite to Headquarters Ruling Letter (HQ) W967550, dated January 28, 2008. In that ruling, the N93 electrical routing device was also classified under heading 8517, HTSUS. The device was for the transmission of data between various control area networks for testing, measuring and control applications between systems and the vehicle.
Note 1(m) to Section XVI, HTSUS, excludes “articles of Chapter 90” from classification in Section XVI. Accordingly, if the instant Livewire flash tuner is prima facie classifiable under heading 9031, HTSUS, it is excluded from classification in heading 8517, HTSUS.
Heading 9031, HTSUS, provides for measuring or checking instruments, appliances and machines not specified or included elsewhere in chapter 90, HTSUS. CBP has consistently held that diagnostic devices used for retrieving trouble codes from the vehicle PCM are provided for in heading 9031, HTSUS. See NY F81576, dated February 2, 2000, NY R05134, dated November 20, 2006, and NY N019301, dated November 28, 2007. Like the instant Livewire flash tuner, all of the devices in the preceding rulings provide the user with the trouble codes necessary to diagnose potential problems emanating from the vehicle’s powertrain. They can also reset these trouble codes. The “Modic III” mobile diagnostic computer, subject to NY F81576, is also capable of storing and conveying historical performance-related data. It analyzes data from the vehicle PCM and compares it to factory-established norms of each vehicle parameter. The device is updated to include norms for new models of vehicles by downloading these norms by CD-ROM from the factory. In the event that a particular vehicle performed outside of the factory-established norms, the “Modic III” alerts mechanics to the discrepancy and suggest adjustments to the motor vehicle to bring it within the appropriate range.
The instant Livewire differs from the above-described diagnostic tools in the sense that in addition to the data gathering and reading functions described above, it is capable of storing and transferring different PCM “tunes” or programs, which would adjust the factory-established PCM settings for a given motor vehicle. In ascertaining whether the merchandise meets the terms of heading 9031,
HTSUS, we note that Harmonized Commodity Description and Coding System Explanatory Note (EN) 90.31(I), which describes the scope of the phrase “Measuring or checking instruments, appliances and machines”, states, in pertinent part:
These include:
* * *
(4) Apparatus for testing and regulating vehicle motors, for checking all parts of the ignition system (coils, sparking plugs, condensers, batteries, etc.), for ascertaining the best carburetor setting (by analyzing exhaust gases), or for measuring the compression in the cylinders. (Emphasis in original).
Like the aforementioned diagnostic devices and computers, the Livewire is designed to provide the user with information contained in the vehicle PCM with respect to trouble codes and performance metrics. That the instant merchandise allows the user to make specific changes to the PCM in order to regulate the vehicle motor according to his or her performance preferences does not exclude the merchandise from the scope of heading 9031, HTSUS. On the contrary, “regulating vehicle motors” is a specifically included function of merchandise classified in the heading, as indicated by EN 90.31(I)(4). Insofar as the Livewire flash tuner meets the terms of heading 9031, HTSUS, it is excluded from classification under heading 8517, HTSUS, by Note 1(m) to Chapter Section XVI, HTSUS. Hence, NY N094137, NY N043829, and HQ W967550 are inapplicable to the present case as classification in Chapter 90, HTSUS, was not at issue.
HOLDING:
By application of GRI 1 and Note 1(m) to Section XVI, HTSUS, the instant Livewire flash tuner is classified under heading 9031, HTSUS. It is specifically provided for under 9031.80.80, which provides for: “[m]easuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter; profile projectors; parts and accessories thereof: Other instruments, appliances and machines: Other….” The column one, general rate of duty is 1.7 percent ad valorem.
Duty rates are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on the World Wide Web at www.usitc.gov/tata/hts.
A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Ieva K. O’Rourke, Chief
Tariff Classification and Marking Branch