CLA-2 OT:RR:CTF:CPM H286666 SK
Matt Nakachi, Esq.
Junker & Nakachi
One Market Spear Tower, Ste. 3600
San Francisco, CA 94105
RE: Revocation of NY N282589; tariff classification of the “Superbook”; smartphone accessory
Dear Mr. Nakachi:
This letter pertains to New York Ruling Letter (NY) N282589, issued on February 3, 2017 to Great World Customs Service on behalf of Andromium, Inc. DBA Sentio, in which U.S. Customs and Border Protection (CBP) classified an article identified as the “Superbook” under subheading 8543.70.99, Harmonized Tariff System of the United States (HTSUS). Upon reconsideration, CBP has determined NY N282589 to be in error and, for the reasons set forth below, that ruling is hereby revoked.
Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. 1625(c)(1)), as amended by section 623 of Title VI, a notice proposing to revoke NY N282589 was published on September 26, 2018, in Volume 52, Number 39 of the Customs Bulletin. No comments were received in response to the proposed action.
FACTS:
The merchandise under consideration is referred to as the Sentio Superbook. The subject article measures 29 centimeters (cm) by 19.5 cm and consists of a 1366 x 768 liquid crystal display (LCD), multi-touch track pad, battery, and a full QWERTY keyboard within a plastic folding enclosure. The Superbook closely resembles a traditional laptop personal computer (PC). However, unlike a traditional laptop, the Superbook does not contain a processor, program storage, a speaker, or a microphone. The Superbook is imported packaged with a USB cable and a charging adapter. The Superbook can be used with any device, such as smartphones and tablet computers, running an Android operating system. Counsel submits that desktop computers and laptops can also be loaded with an Android-compatible emulator. An Android powered operating system must have software installed that allows it to recognize and interact with the Superbook. This software, the Sentio app, can be downloaded and installed onto an Android smartphone or other Android device and the Superbook is connected to the device via a USB cable. Once the devices are connected and the app is started, the user’s phone display is presented on the Superbook LCD and the user may interact with the smartphone’s applications directly from the Superbook’s trackpad and keyboard. The Sentio app allow the user to interact with their smartphone in a manner similar to an automatic data processing (ADP) machine, such as a laptop or desktop PC. The processing and storage of all applications is performed from and stored onto the user’s smartphone.
LAW AND ANALYSIS:
Classification under the HTSUS is in accordance with the General Rules of Interpretation (GRIs). GRI 1 provides that the classification of goods will 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 will then be applied in order. GRI 6 provides that classification of goods at the subheading level will be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the preceding GRIs on the understanding that only subheadings at the same level are comparable.
The following headings and subheadings of the HTSUS are under consideration:
8471 Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included:
* * *
8543 Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof:
8543.70 Other machines and apparatus:
8543.70.60 Articles designed for connection to telegraphic or telephonic apparatus or instruments or to telegraphic or telephonic networks…
* * *
Other:
Other:
8543.70.99 Other…
In NY N282589, CBP classified the Superbook under subheading 8543.70.99, HTSUS. In your request for reconsideration of NY N282589, you posit that based upon additional information provided, the Superbook is properly classifiable under a number of different HTSUS provisions, including subheading 8471.60.20, HTSUS, and subheading 8543.70.60, HTSUS. Specifically, you state that the Superbook is not designed for sole use with a smartphone and the device is “[C]apable of use with any number of other android compatible devices, including (a) the automatic data processing (‘ADP’) component of an android smartphone (a composite machine consisting of an ADP and a phone); (b) a computer (itself an ADP machines); or (c) a laptop computer; or (d) an android tablet computer.”
Regarding your assertion that the Superbook is classifiable under heading 8471, HTSUS, as a unit of an ADP system, we note that Note 5 to Chapter 84 provides:
5. (A) For the purposes of heading 8471, the expression "automatic data processing machines" means machines capable of :
(i) Storing the processing program or programs and at least the data immediately necessary for the execution of the program;
(ii) Being freely programmed in accordance with the requirements of the user;
(iii) Performing arithmetical computations specified by the user; and
(iv) Executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run.
(B) Automatic data processing machines may be in the form of systems consisting of a variable number of separate units.
(C) Subject to paragraphs (D) and (E) below, a unit is to be regarded as being part of an automatic data processing system if it meets all of the following conditions :
(i) It is of a kind solely or principally used in an automatic data processing system;
(ii) It is connectable to the central processing unit either directly or through one or more other units; and
(iii) It is able to accept or deliver data in a form (codes or signals) which can be used by the system.
Separately presented units of an automatic data processing machine are to be classified in heading 8471.
However, keyboards, X-Y co-ordinate input devices and disk storage units which satisfy the conditions of paragraphs (C) (ii) and (C) (iii) above, are in all cases to be classified as units of heading 8471. (Emphasis added)
Although the Superbook may be used with Android-compatible devices installed with the Sentio app, its utility in this context is limited. The Superbook’s keyboard, display, and trackpad functions duplicate what most PCs, laptops and tablets already offer – with the exception that perhaps some users may prefer to type on the Superbook’s QWERTY keyboard rather than a tablet touch screen. We further note that no substantiating evidence was provided by counsel regarding the Superbook’s use with Android-compatible devices other than Android smartphones. In this regard it is noted that Sentio’s website, as well as Sentio’s Kickstarter Fund website, describes the Superbook’s primary purpose as enabling a smartphone to be used in the manner of a laptop by providing a keyboard, LCD, and trackpad. Sentio’s website markets the Superbook as follows:
Your Phone Doubles As Your Laptop. Get things done anywhere with Superbook, the “Laptop Body” that transforms your phone into a laptop.
* * *
With Superbook, your Android phone is finally your laptop.
* * *
New Phone, New Laptop. Superbook is compatible with all modern Android devices. Get a new phone? It’s like getting a new laptop free.
See https://www.sentio.com/https: [site last visited November 21, 2017].
The Kickstarter website for this device states:
What is the Superbook?
At its core, the Superbook is a smart laptop shell that provides a large screen, keyboard and multi-touch trackpad, 8+ hours of battery, and phone charging capabilities. When plugged into your Android smartphone, it launches our app to deliver the full laptop experience. Think of it as the ultimate accessory for your smartphone.
See https://www.kickstarter.com/projects/andromium/the-superbook-turn-your-smartphone-into-a-laptop-f [site last visited November 17, 2017].
As the Superbook is designed primarily to interface with smartphones and its operation would be superfluous with respect to ADP machines, we find that it is not of a kind solely or principally used in an ADP system, and thus does not satisfy the requirements set forth in Note 5(C)(i) to Chapter 84. Therefore, classification under heading 8471, HTSUS, is precluded.
One of your other classification theories is partially in agreement with NY N282589 inasmuch as the subject Superbook is provided for under heading 8543, HTSUS, but properly classified pursuant to GRI 6 under subheading 8543.70.60, HTSUS, as an article “…designed for connection to telegraphic or telephonic apparatus or instruments or to telegraphic or telephonic networks” rather than subheading 8543.70.99, HTSUS.
In this regard, we note that EN 85.43, provides, in pertinent part:
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 Superbook performs the individual function of enabling a smartphone to emulate the capabilities of a laptop or tablet computer. The Superbook is not covered by any other heading in Chapter 85 or elsewhere in the Nomenclature, and therefore is properly classified under heading 8543, HTSUS. As the Superbook is an electrical machine designed for connection to telephonic apparatus (i.e. a smartphone), is it properly classifiable under subheading 8543.70.60, HTSUS, pursuant to GRI 6. Furthermore, we note that this conclusion is consistent with a previous decision in which CBP classified a substantially similar device, identified as the Redfly Mobile Companion, in NY N024935, dated April 7, 2008. In that ruling, CBP determined that the subject article, described as an accessory to select models of Windows Mobile Smart Phones and consisting of a QWERTY keyboard, display screen and track pad, was classifiable under subheading 8543.70.60, HTSUS.
HOLDING:
By application of GRIs 1 and 6, the Superbook is classified in heading 8543, HTSUS, and specifically in subheading 8453.70.60, HTSUS, which provides for “[E]lectrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; Other machines and apparatus: Articles designed for connection to telegraphic or telephonic apparatus or instruments or to telegraphic or telephonic networks… .” The applicable rate of duty is 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 the internet at www.usitc.gov.
EFFECT ON OTHER RULINGS:
NY N282589, dated February 3, 2017, is hereby REVOKED.
In accordance with 19 U.S.C. 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division