CLA-2 OT:RR:CTF:TCM H282228 ALS
TARIFF NOs.: 3926.90.99, 4421.91.97, 4421.99.97, 7326.90.86, and 7616.99.51
Ms. Shawn Glover
UPS Trade Management Services, Inc.
2031 S. Centennial Avenue
Aiken, South Carolina 29803
RE: Ruling request regarding the tariff classification of parts of unassembled flash
drives
Dear Ms. Glover:
This letter is in reply to your request, on behalf of IPMedia Holdings, Inc., for a ruling on the proper tariff classification of parts of unassembled flash drives. Our decision is set forth below.
FACTS:
The articles at issue are unassembled parts of USB [universal serial bus] flash drives without IC [integrated circuit] chips (also referred herein as “flash drive parts”). The unassembled parts are imported in equal numbers as a set to be assembled according to customer specifications. In some cases, specific proprietary content is downloaded onto an IC chip that is combined with the parts upon assembly to complete the flash drive. In other cases, the IC chip is combined with the parts but no content is downloaded onto the completed flash drive. In all cases, the IC chip is not imported with the other parts that comprise the flash drive. The parts that make up the body of the completed flash drive are made of either plastic, wood, iron, steel, or aluminum.
The Holders, called “plastic trays,” hold the galvanized iron alloy metal tip that in turn holds the IC chip.
The Spin Drives consist of a plastic tray which holds the IC chip fitted into a galvanized iron alloy metal tip which is encased in a rubberized plastic sleeve. The metal tip is fitted to a metal swivel so that the IC chip can swivel in and out of the plastic tray.
The Wallet Cards are slim plastic cases and come in two varieties. The Wallet Card Mini Spin has an arm that swivels out so that the IC chip can be used in a USB. The Wallet Card Micro Flip has a tray the slides out of the card to expose the IC chip for use, and is the size of a credit card.
The Woodman body is made of either maple, bamboo, or walnut. A tray with a IC chip attached is fitted inside the body of the drive and a magnetic top is removed to access the IC chip.
The Koval XL has a plastic case which contains a tray that will be fitted with an IC chip. A plastic cap fits over the metal tip and chip.
The Key is in the shape of an aluminum key with the end of the key cut to fit a plastic holder and IC chip.
You assert that these flash drive parts are properly classified under heading 8523, HTSUS, specifically subheading 8523.51.00, as solid state non-volatile storage devices.
ISSUES:
Are the unassembled parts of USB flash drives without IC chips that are made of plastic, as described above, properly classified under heading 3926, HTSUS, which provides for “Other articles of plastic and articles of other materials of heading 3901 to 3914”, or under heading 8523, HTSUS, which provides for “Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras, digital cameras and video camera recorders”?
Are the unassembled parts of USB flash drives without IC chips that are made of wood, as described above, properly classified under heading 4421, HTSUS, which provides for “Other articles of wood”, or under heading 8523, HTSUS, which provides for “Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras, digital cameras and video camera recorders”?
Are the unassembled parts of USB flash drives without IC chips that are made of iron or steel, as described above, properly classified under heading 7326, HTSUS, which provides for “Other articles of iron or steel”, or under heading 8523, HTSUS, which provides for “Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras, digital cameras and video camera recorders”?
Are the unassembled parts of USB flash drives without IC chips that are made of aluminum, as described above, properly classified under heading 7616, HTSUS, which provides for “Other articles of aluminum”, or under heading 8523, HTSUS, which provides for “Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras, digital cameras and video camera recorders”?
LAW AND ANALYSIS:
Classification under the HTSUS is determined in accordance with the General Rules of Interpretation (“GRI”) and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation (“ARI”). GRI 1 provides that the classification of goods shall be “determined according to the terms of the headings 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, GRIs 2 through 6 may be applied in order. GRI 2(a) provides the following:
(a) Any reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as entered, the incomplete or unfinished article has the essential character of the complete or finished article. It shall also include a reference to that article complete or finished (or falling to be classified as complete or finished by virtue of this rule), entered unassembled or disassembled.
The following headings and subheadings of the HTSUS are under consideration in this case:
3926 Other articles of plastics and articles of other materials of headings 3901 to 3914:
3926.90 Other:
3926.90.99 Other...
* * *
4421 Other articles of wood:
Other:
4421.91 Of bamboo:
Other:
4421.91.97 Other…
* * *
4421.99 Other:
Other:
4421.99.97 Other…
* * *
7326 Other articles of iron or steel:
7326.90 Other:
7326.90.86 Other...
* * *
7616 Other articles of aluminum:
7616.99 Other:
7616.99.51 Other...
* * *
8523 Discs, tapes, solid-state non-volatile storage devices, "smart cards" and other media for the recording of sound or of other phenomena, whether or not recorded, including matrices and masters for the production of discs, but excluding products of Chapter 37:
Semiconductor media:
8523.51.00 Solid-state non-volatile storage devices...
* * * * * * * * *
Note 5(a) to Chapter 85, HTSUS, provides the following:
5. For the purposes of heading 8523:
(a) "Solid-state non-volatile storage devices "(for example, "flash
memory cards" or "flash electronic storage cards") are storage devices with a connecting socket, comprising in the same housing one or more flash memories (for example, "FLASH E²PROM") in the form of integrated circuits mounted on a printed circuit board. They may include a controller in the form of an integrated circuit and discrete passive components, such as capacitors and resistors;… [Emphasis added.]
Note 2(s) to Chapter 39, HTSUS, provides the following:
2. This chapter does not cover:
(s) Articles of section XVI (machines and mechanical or electrical
appliances);…
Note 1(l) to Chapter 44, HTSUS, provides the following:
1. This chapter does not cover:
(l) Goods of section XVI or section XVII (for example, machine parts,
cases, covers, cabinets for machines and apparatus and wheelwrights'
wares);…
Note 1(f) to Section XV, HTSUS, provides the following:
1. This chapter does not cover:
(f) Articles of section XVI (machinery, mechanical appliances and electrical
goods);…
You contend that the subject flash drive parts without IC chips are classifiable under heading 8523 as solid state non-volatile storage devices by application of GRI 2(a). Pursuant to Note 5(a), articles that are classifiable under 8523 as solid state non-volatile storage devices include, among other things, integrated circuits mounted on a printed circuit board. It is obvious from the description of the subject parts that even when imported in equal numbers as unassembled flash drives, the flash drive parts do not include integrated circuits, which is the most essential component necessary to perform their main function of storing data. It is well-settled that goods are to be classified according to their condition as imported. See Mita Copystar Am. v. United States, 21 F.3d 1079, 1082 (Fed. Cir. 1994); see also CBP Ruling HQ H250531 (April 20, 2015). As imported, the flash drive parts do not match the description of solid state non-volatile storage devices as provided in Note 5(a). As such, the flash drive parts do not have the essential character of solid state non-volatile storage devices. Consequently, GRI 2(a) does not apply in this case. Thus, the unassembled parts of USB flash drives without IC chips as described herein are not classifiable under heading 8523, HTSUS, as solid state non-volatile storage devices.
As noted above, Note 2(s) to Chapter 39 provides that the chapter does not cover articles of section XVI, HTSUS. Chapter 8523 is provided for under section XVI. As we have concluded that the subject parts of flash drives are not classifiable under chapter 8523, Note 2(s) is not applicable with regard to the parts of flash drives made of plastic. Therefore, the subject parts of flash drives made of plastic are to be classified under heading 3926, HTSUS. Specifically, they are to be classified under subheading 3926.90.99, HTSUS, as other articles of plastics.
As noted above, Note 1(l) to Chapter 44 provides that the chapter does not cover goods of section XVI, HTSUS. As we have concluded that the subject parts of flash drives are not classifiable under chapter 8523, Note 1(l) is not applicable with regard to the parts of flash drives made of bamboo or other woods. Therefore, the subject parts of flash drives made of bamboo or other woods are to be classified under heading 4421, HTSUS. Specifically, the parts of flash drives made of bamboo are to be classified under subheading 4421.91.97, HTSUS, as other articles of bamboo, and the parts of flash drives made of woods other than bamboo are to be classified under subheading 4421.99.97, HTSUS, as other articles of wood.
As noted above, Note 1(f) to Section XV provides that the section does not cover articles of section XVI, HTSUS. Chapter 7326 is provided for under section XV. As we have concluded that the subject parts of flash drives are not classifiable under chapter 8523, Note 1(f) is not applicable with regard to the parts of flash drives made of iron or steel. Therefore, the subject parts of flash drives made of iron or steel are to be classified under heading 7326, HTSUS. Specifically, they are to be classified under subheading 7326.90.86, HTSUS, as other articles of iron or steel.
Chapter 7616 is also provided for under section XV. As we have concluded that the subject parts of flash drives are not classifiable under chapter 8523, Note 1(f) is not applicable with regard to the parts of flash drives made of aluminum. Therefore, the subject parts of flash drives made of aluminum are to be classified under heading 7616, HTSUS. Specifically, they are to be classified under subheading 7616.99.51, HTSUS, as other articles of aluminum.
HOLDING:
By application of GRI 1, the unassembled parts of USB flash drives without IC chips are to be classified under headings 3926, 4421, 7326, and 7616, HTSUS, as noted in the LAW AND ANALYSIS section above. Specifically the subject merchandise is classified under subheadings 3926.90.99, 4421.91.97, 4421.99.97, 7326.90.86, and 7616.99.51, HTSUS, as noted in the LAW AND ANALYSIS section above.
The 2017 column one, general rate of duty for merchandise classified in subheading 3926.90.99 is 5.3%. The 2017 column one, general rate of duty for merchandise classified in subheadings 4421.91.97 and 4421.99.97 is 3.3%. The 2017 column one, general rate of duty for merchandise classified in subheading 7326.90.86 is 2.9%. The 2017 column one, general rate of duty for merchandise classified in subheading 7616.99.51 is 2.5%.
Duty rates are provided for your convenience and 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.
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is 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,
Gregory S. Connor, Chief
Electronics, Machinery, Automotive, and
International Nomenclature Branch