OT:RR:CTF:TCM H265040 PTM
TARIFF No: 8472.90.1000
Jason S. Hollander, Vice President
Diebold Incorporated
P.O. Box 3077
North Canton, OH 44720
RE: Tariff Classification of Automatic Teller Machines
Dear Mr. Hollander,
We are writing in response to your correspondence dated May 13, 2015, in which you request a prospective ruling on behalf of Diebold Incorporated (“Diebold”), regarding the tariff classification of Automatic Teller Machines (“ATM”) under the Harmonized Tariff Schedule of the United States (“HTSUS”). Our response follows.
FACTS:
The products at issue are several models of ATMs. The Diebold Opteva 562 is described in product literature as a “through-the-wall, walk-up cash dispenser.” The Diebold Opteva 562 enables customers to withdraw cash, check balances and make transfers between accounts. It does not accept deposits. The following is an image of the Diebold Opteva 562:
The Diebold Opteva 529 is described as a “lobby cash dispenser.” The Diebold Opteva 529 enables customers to withdraw cash, check balances and make transfers between accounts. It does not accept deposits. The following is an image of the Diebold Opteva 529:
The Diebold Opteva 522 is described as a “lobby cash dispenser.” The Diebold Opteva 522 enables customers to withdraw cash, check balances and make transfers between accounts. It does not accept deposits. The following is an image of the Diebold Opteva 522:
The Diebold Opteva 569 is described as a “through-the-wall” cash dispenser. The Diebold Opteva 569 enables customers to withdraw cash, check balances and make transfers between accounts. It does not accept deposits. The following is an image of the Diebold Opteva 569:
The Diebold machines are all described as ATMs. The machines include all include a consumer display, card reader, encrypted personal identification number (“PIN”) pad, consumer awareness mirror and receipt printers.
ISSUE:
What is the tariff classification of Diebold ATM machines?
LAW AND ANALYSIS:
Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRI’s”). 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 requires 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 the GRIs 1 through 5.
The Explanatory Notes (EN) to the Harmonized Commodity Description and Coding System represent the official interpretation of the tariff 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).
The HTSUS provisions at issue are as follows:
8472 Other office machines (for example, hectograph or stencil duplicating machines, addressing machines, automatic banknote dispensers, coin-sorting machines, coin-counting or wrapping machines, pencil-sharpening machines, perforating or stapling machines):
8472.90 Other:
8472.90.10 Automatic teller machines
* * *
8472.90.90 Other
At GRI 1, there is no dispute that the instant merchandise is classified in heading 8472 HTSUS. The issue arises at the eight-digit level. Consequently, we begin analysis using GRI 6. GRI 6 requires that the GRI’s be applied at the subheading level on the understanding that only subheadings at the same level are comparable. The GRI’s apply in the same manner when comparing subheadings within a heading. At the eight-digit level, the primary consideration is whether the machines are automatic teller machines.
The term “automatic teller machine” is not defined in the HTSUS. When a tariff term is not defined by the HTSUS or the legislative history, its correct meaning is its common or commercial meaning. See Rocknell Fastener, Inc. v. United States, 267 F.3d 1354 (Fed. Cir. 2001), stating that “[t]o ascertain the common meaning of a term, a court may consult ‘dictionaries, scientific authorities, and other reliable information sources and ‘lexicographic and other materials’.” Id (quoting C.J. Tower & Sons of Buffalo, Inc. v. United States, 673 F.2d 1268, 1271, 69 C.C.P.A. 128 (C.C.P.A. 1982); Simod Am. Corp. v. United States, 872 F.2d 1572, 1576 (Fed. Cir. 1989)). The Oxford Dictionary defines the term “automatic teller machine” as “a machine that automatically provides cash and performs other banking services on insertion of a special card by the account holder.” Similarly, Investopedia defines the term as “an electronic banking outlet, which allows customers to complete basic transactions without the aid of a branch representative or teller.”
The EN for heading 84.72 provides additional guidance. It provides, in pertinent part:
The heading includes, inter alia :
* * *
(6) Automatic teller machines, with which customers deposit, draw and transfer money and see the balances of their accounts without direct contact with bank personnel.
We note that the definition provided in the EN is substantially similar to those provided in dictionaries inasmuch as the definition covers machines that permit users to conduct various banking activities.
The Diebold machines all provide banking services such as cash withdrawal, cash transfer and balance verification. Users are permitted to perform these functions by inserting a bank card, entering a PIN code and operating the machines, all without the aid of a bank representative. Furthermore, the machines are described in product literature as ATM machines. As such, they conform to the common commercial meaning of “automatic teller machine” as described above. Furthermore, the Diebold machines provide the functions described in EN (6) for heading 84.72, with the exception of accepting deposits. However, EN 84.72 (6) serves as an example of products covered under heading 84.72 and does not restrict the scope of the eight-digit provision to products that perform all four of the functions enumerated in the definition (deposit, draw and transfer money, and see account balances). In other words, the enumerated functions set forth in are illustrative of what ATMs may perform, rather than a dispositive list of functions that ATMs must perform to qualify as an “automatic teller machine” under EN 84.72 (6). Different ATMs may perform different functions depending on their sophistication. However, all ATMs permit users to perform basic banking operations such as withdrawing cash, transferring funds and checking account balances. Consequently, the fact that the Diebold machines at issue do not accept deposits is a reflection of the fact that the purveyors of establishments in which the machines are located (service stations, restaurants, department stores, etc.) are not able or willing to transfer deposits to their designated banks. The lack of deposit functionality therefore does not preclude their classification as “automatic teller machines” at the eight-digit level under heading 8472 HTSUS. In contrast to the “automatic deposit machines” that only accepted deposits and provided no additional functionality which were the subject of NY C83801 (Feb. 2, 1998) (classifying the machines under subheading 8472.90.9520 HTSUS as “other coin and currency handling machines”), the Diebold machines at issue here are precisely the type of devices that are commonly understood to be automatic teller machines.
HOLDING:
By application of GRI 1 and GRI 6, the Diebold ATM machines are classified under subheading 8472.90.1000 which provides for “Other office machines (for example, hectograph or stencil duplicating machines, addressing machines, automatic banknote dispensers, coin-sorting machines, coin-counting or wrapping machines, pencil-sharpening machines, perforating or stapling machines): Other: Automatic teller machines.” The general, column one rate of duty is free.
Duty rates are provided for convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at http://www.usitc.gov/tata/hts/.
Sincerely,
Ieva O’Rourke, Chief
Tariff Classification and Marking Branch