CLA-2 OT:RR:CTF:TCM H086456 RM
Deborah B. Stern, Esq.
Sandler, Travis & Rosenberg, P.A.
1000 NW 57th Court, Suite 600
Miami, FL 33126
RE: Tariff Classification of an RFID Transponder
Dear Ms. Stern:
This is in response to your letter, dated November 3, 2009, to U.S. Customs and Border Protection (“CBP”), on behalf of Atmel Corporation (“Atmel”), in which you request a binding ruling on the classification of the TK5551 Read/Write ID Transponder (“TK5551” or “transponder”) under the Harmonized Tariff Schedule of the United States (“HTSUS”).
FACTS:
Atmel’s TK5551 is a read/write radiofrequency identification (“RFID”) transponder. It is a plastic-packaged device that contains an integrated circuit (“IC”) with a 264-bit Electrically Erasable Programmable Read-Only Memory (“EEPROM”), a coil antenna, and a capacitor. The device is powered by the RF signal generated by an interrogator base station. As illustrated below, when the transponder comes in proximity to the RF signal, it transfers the data stored in the IC (e.g., an ID code) to the base station by modulating the amplitude of that signal. In turn, the base station converts the data it receives into digital form and passes it to an adjoining micro-controller for processing.
The transponder can be used in a variety of close-coupled RFID systems (e.g., access-control, asset management or process-control systems). However, as imported, it contains only blank or unusable data and as such is not dedicated to a particular use. Once programmed, the data stored in the transponder can be altered, overwritten, and password protected through its base station.
ISSUE:
Whether the TK5551 is classified as a “smart card” in subheading 8523.52.00, HTSUS, or as “other semiconductor media” in subheading 8523.59.00, HTSUS?
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.
GRI 6 provides that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and, mutatis mutandis, to GRIs 1 through 5.
The 2010 HTSUS subheadings under contention are the following:
8523 Discs, tapes, solid-state non-volatile storage devices, “smart cards” and other media for the recording of sound or other phenomena, whether or not recorded, including matrices and masters for the production of discs, but excluding products of Chapter 37:
Semiconductor media:
8523.52.00 “Smart cards” …
8523.59.00 Other …
* * *
Note 4(b) to Chapter 85, HTSUS, provides:
For the purposes of heading 8523:
The term “smart cards” means cards which have embedded in them one or more electronic integrated circuits (a microprocessor, random access memory (RAM) or read-only memory (ROM)) in the form of chips. These cards may contain contacts, a magnetic stripe or an embedded antenna but do not contain any other active or passive circuit elements.
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
EN 85.23 provides, in relevant part:
This heading covers different types of media, whether or not recorded, for the recording of sound or of other phenomena (e.g., numerical data; text; images; video, or other graphical data; software). Such media are generally inserted into or removed from recording or reading apparatus and may be transferred from one recording or reading apparatus to another.
The media of this heading may be presented recorded, unrecorded, or with some pre-recorded information, but capable of having more information recorded on them.
…
In particular, this heading covers:
…
(C) SEMICONDUCTOR MEDIA
Products of this group contain one or more electronic integrated circuits.
Thus, this group includes:
…
(2) “Smart cards” (see Note 4(b) to [Chapter 85]) …
These “smart cards” also include certain articles known as “proximity cards or tags” if they meet the conditions of Note 4(b) to this Chapter. Proximity cards/tags usually consist of an integrated circuit with a read only memory, which is attached to a printed antenna. The card/tag operates by creating a field interference (the nature of which is determined by a code contained in the read only memory) at the antenna in order to affect a signal transmitted from, and reflected back, to the reader. This type of card/tag does not transmit data.
* * *
Heading 8523, HTSUS, provides in pertinent part for “Smart cards and other media for the recording of sound or other phenomena, whether or not recorded ….” CBP has previously defined the term “media” as “a material that stores or transmits data.” See Headquarters Ruling Letter (“HQ”) 962507, dated May 22, 2002 (citing The Computer Glossary (Freedman, 6th ed., 1993, pg. 346)). We have also stated that all types of media function as instruments on which phenomena may be stored or retrieved upon demand from a host machine. Id. Moreover, EN 85.23 explains that the “other phenomena” referenced in the heading includes “numerical data, text, images, software and video or other graphical data.” See EN 85.23. The EN adds that the heading covers “semiconductor media” i.e., media containing one or more integrated circuits.
Atmel’s TK5551 constitutes semiconductor media, as defined above, because it is a data storage device that contains an IC. Though it operates in a similar fashion as a “smart card,” specifically as a proximity tag (see EN 85.23(C)(2)), it is not classified as one because it does not meet the terms of Note 4(b) to Chapter 85, HTSUS. The Note states in relevant part that:
“Smart cards” … have embedded in them one or more electronic ICs (… read-only memory (ROM)) in the form of chips. They may contain contacts, a magnetic stripe or an embedded antenna, but do not contain any other active or passive circuit elements.” (Emphasis added).
The TK5551 contains a capacitor, which is a passive circuit element, in addition to an IC with EEPROM and an embedded antenna. See Note 8(b)(ii) to Chapter 85, HTSUS. As such, we find that the device is classified as “other” semiconductor media, in subheading 8523.59.00, HTSUS.
HOLDING:
By application of GRI 1, Atmel’s TK5551 Read/Write ID Transponder is classified under heading 8523, HTSUS, specifically in subheading 8523.59.00, which provides in relevant part for: “Other media for the recording of sound or other phenomena …: Semiconductor media: Other.” The 2010 column one, general rate of duty is: Free.
Duty rates are provided for convenience only and 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,
Gail A. Hamill, Chief
Tariff Classification and Marking Branch