CLA-2:OT:RR:CTF:TCM H025849 JRB
Tariff No.: 9001.10.00; 8544.70.00
Port Director
Port of Atlanta
4341 International Parkway
Suite 600
Atlanta, GA 30354
RE: Application for further review of protest number 1704-07-100361; Classification of Single Mode Optical Fibers
Dear Port Director:
This letter is our decision on protest and application for further review (AFR) number 1704-07-100361, filed by counsel on behalf of OFS Brightwave, LLC. (protestant). The protest is against U.S. Customs and Border Protection’s (CBP) classification of single mode optical fiber under the Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The subject matter of this protest is described as single mode optical fiber. The product has a glass core which is surrounded by glass cladding, a primary protective acrylate coating, and a secondary protective acrylate coating. A general diagram of single mode optical fiber, as provided on a website of a company related to the protestant, is below.
In particular, single mode optical fiber is described as having “a small core size (< 10 µm) which permits only one mode or ray of light to be transmitted. Single-mode fibers have low attenuation and zero dispersion at 1310 nm.”
Prior to this protest, the Port of Atlanta sent a Notice of Action (CBP Form 29) on December 23, 2002 indicating that single mode optical fibers should be classified in subheading 8544.70, HTSUS, as fiber optic cable. After the issuance of the December, 2002 Notice of Action, between February, 2003 and December, 2003 the protestant filed seven protests, covering twenty-eight entries made in 2002 prior to the issuance of the Notice of Action. The merchandise had been entered under subheading 9001.10, HTSUS. Those protests were all approved between June, 2003 and May, 2004 allowing for classification of single mode optical fiber as fiber optic cable of heading 8544.70, HTSUS.
On March 25, 2005, CBP issued another Notice of Action indicating that the appropriate classification for the merchandise is subheading 9001.10, HTSUS, which provides for optical fibers and bundles of optical fibers. On May 4, 2005, the protestant, through counsel, filed a request for internal advice, pursuant to 19 C.F.R. §177.11 with your port claiming that they were entitled to treatment.
CBP then issued a proposed revocation of treatment on July 19, 2006 in Volume 40, Number 30 of the Customs Bulletin proposing to classify single mode optical fiber in heading 9001, HTSUS, and to revoke treatment. In the final notice published on October 24, 2007 in Volume 41, Number 44 of the Customs Bulletin CBP confirmed the classification of single mode optical fiber in subheading 9001.10, HTSUS, but withheld making a determination on whether or not the protestant was entitled to treatment, pending further review of comments, which questioned whether the protestant was precluded from receiving treatment pursuant to 19 C.F.R. §177.12(c)(iii).
The merchandise that is the subject of this protest was entered under subheading 9001.10, HTSUS, in accordance with the March 25, 2005, Notice of Action, in twenty-three separate entries made between May 18, 2006 and July 31, 2006. The entries were then liquidated between March 30, 2007 and June 15, 2007, under subheading 9001.10, HTSUS, and this protest was filed on September 26, 2007 requesting classification in subheading 8544.70, HTSUS, and claiming treatment. On June 19, 2008, Headquarters sent a letter to your port stating that it was refusing to answer the internal advice request pursuant to 19 C.F.R. §177.11(b)(ii)(5) and that it intended to address the issue of treatment in the instant protest and AFR.
ISSUE:
Did OFS receive treatment such that its single mode optical fibers can be classified in heading 8544, HTSUS, pursuant to 19 U.S.C. §1625?
LAW AND ANALYSIS:
Initially, we note that this matter is protestable as a classification decision pursuant to 19 U.S.C. §1514(a)(2). The protest was timely filed on September 26, 2007, within 180 days of the liquidation of the first entry giving rise to the protest. See Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, §2103(2)(B) (codified as amended at 19 U.S.C. §1514(c)(3) (2006)). In addition further review of Protest 1704-07-100361 was properly accorded because the protest involves a matter in which Headquarters refused to answer through an internal advice request. See 19 C.F.R. §174.24(d).
I. Single Mode Optical Fiber is Classified in Heading 9001, HTSUS.
The 2006 HTSUS provisions under consideration are:
8544 Insulated (including enameled or anodized) wire, cable (including coaxial cable) and other insulated electric conductors, whether or not fitted with connectors; optical fiber cables, made up of individually sheathed fibers, whether or not assembled with electric conductors or fitted with connectors:
9001 Optical fibers and optical fiber bundles; optical fiber cables other than those of heading 8544; sheets and plates of polarizing material; lenses (including contact lenses), prisms, mirrors and other optical elements, of any material, unmounted, other than such elements of glass not optically worked:
9001.10 Optical fibers, optical fiber bundles and cables …
In Headquarters Ruling Letter (HQ) W968251, dated October 3, 2007, CBP determined that single mode optical fibers are classified in heading 9001, HTSUS, because they do not meet the definition of fiber optic cable. The analysis and conclusion of that decision are adopted for this protest. More specifically, CBP has stated on numerous occasions that a fiber optic cable of heading 8544, HTSUS, must contain three elements: (1) individually sheathed optical fibers; (2) strength members; and (3) a protective outer jacket. See HQ 964883, dated September 14, 2001. The merchandise that is the subject of this protest lacks strength members and a protective outer jacket. Therefore, single mode optical fiber is classified in heading 9001, HTSUS.
II. CBP accorded treatment to OFS for the protested entries.
Despite the fact that single mode optical fiber is classified in heading 9001, HTSUS, the protestant argues that they are entitled to treatment pursuant to 19
U.S.C. §1625(c). 19 U.S.C. §1625(c) provides, in relevant part:
A proposed interpretive ruling or decision which would—
(1) modify (other than to correct a clerical error) or revoke a prior interpretive ruling or decision which has been in effect for at least 60 days; or
(2) have the effect of modifying the treatment previously accorded by [CBP] to substantially identical transactions
shall be published in the Customs Bulletin.
CBP promulgated regulations indicating how CBP is to determine whether or not a particular importer has received treatment. See 19 C.F.R. §177.12(c). In particular, 19 C.F.R. §177.12(c) provides, in relevant part:
… The following rules will apply for purposes of determining under this section whether a treatment was previously accorded by [CBP] to substantially identical transactions of a person:
(i) There must be evidence to establish that:
(A) There was an actual determination by a [CBP] officer regarding the facts and issues involved in the claimed treatment;
(B) The [CBP] officer making the actual determination was responsible for the subject matter on which the determination was made; and
(C) Over a 2-year period immediately preceding the claim of treatment, [CBP] consistently applied that determination on a national basis as reflected in liquidations of entries or reconciliations or other [CBP] actions with respect to all or substantially all of that person’s [CBP] transactions involving materially identical facts and issues;
* * *
(iii) [CBP] will not find that a treatment was accorded to a person’s transactions if:
(A) The person’s own transactions were not accorded the treatment in question over the 2-year period immediately preceding the claim of treatment;
(B) The issue in question involves the admissibility of merchandise;
(C) The person made a material false statement or material omission in connection with a [CBP] transaction or in connection with the review of a [CBP] transaction and that statement or omission affected the determination on which the treatment claim is based; or
(D) [CBP] advised the person regarding the manner in which the transactions should be presented to [CBP] and the person failed to follow that advice; and
(iv) The evidentiary burden as regards the existence of the previous treatment is on the person claiming that treatment.…
Thus, to prove treatment the importer must be able to provide evidence that (1) a CBP official made a determination on the classification of single mode optical fiber; (2) that the CBP official that made the determination was responsible for making those decisions; and (3) that for the two year period immediately preceding this claim for treatment, CBP applied this determination on a national basis with respect to the importer’s importation of this merchandise. However, should CBP make a finding that any one of the four criteria identified in 19 C.F.R. 177.12(c)(iii), is applicable with respect to the claims for treatment, then the importer will not be accorded treatment.
In this case, the protestant is able to prove the first two prongs as indicated in HQ W968251. Further, the protestant is able to prove that for a two year period immediately preceding the claim for treatment in May, 2005, CBP consistently classified their single mode optical fiber in heading 8544, HTSUS, as fiber optic cable. This classification was based on the application of CBP’s classification determination in a Notice of Action, dated December 23, 2002. In particular, the protestant is able to point to not only the 2002 Notice of Action but seven protests which your port allowed in 2003 and 2004, classifying single mode optical fiber in heading 8544, HTSUS.
Also, as stated in HQ W968251, 110 entries of the single mode optical fiber were made between May 4, 2003 and May 4, 2005 and were liquidated under subheading 8544.70, HTSUS. In addition, after further investigations CBP was unable to find any evidence to support claims that OFS would be precluded from receiving treatment pursuant to 19 C.F.R. §177.12(c)(iii).
Therefore, the protestant has met the burden of proof for demonstrating that treatment exists and the protest must be allowed for those entries of merchandise that were entered prior to the effective date of HQ W968251 since it is the interpretive ruling that revoked any treatment previously that was previously accorded to the protestant. However, for any entries made after the effective date of that ruling the merchandise should be classified in heading 9001, HTSUS, as optical fiber.
HOLDING:
Single mode optical fiber is classified in heading 9001, HTSUS, by application of GRI 1, more specifically it is provided for in subheading 9001.10.00, HTSUS, which provides for “[o]ptical fibers and optical fiber bundles; optical fiber cables other than those of heading 8544; sheets and plates of polarizing material; lenses (including contact lenses), prisms, mirrors and other optical elements, of any material, unmounted, other than such elements of glass not optically worked: [o]ptical fibers, optical fiber bundles and cables”. The 2006 column one, general rate of duty, is 6.7% ad valorem.
However, OFS Fitel is accorded treatment pursuant to 19 U.S.C. §1625(c) and 19 C.F.R. §177.12 and this treatment entitles them to classify their merchandise for the time that treatment existed under heading 8544, HTSUS, more specifically in subheading 8544.70.00, HTSUS, which provides for “[i]nsulated (including enameled or anodized) wire, cable (including coaxial cable) and other insulated electric conductors, whether or not fitted with connectors; optical fiber cables, made up of individually sheathed fibers, whether or not assembled with electric conductors or fitted with connectors: [o]ptical fiber cables”. The 2006 column one, general rate of duty, is Free.
OFS’s treatment claims are allowed for entries made before, December 23, 2007, the effective date of HQ W958251. You are instructed to ALLOW this protest. In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office International Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.CBP.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division