OT:RR:CTF:EMAIN H325234 SKK
TARIFF NO: 9031.80.80
Mr. Leslie Alan Glick
Butzel Attorneys and Counselors
1909 K Street, NW, Suite 500
Washington, DC 20006-1909
RE: Request to reconsider HQ H323185; Tariff classification of an automotive telematics device with cellular modem, GPS, code reader, accelerometer/gyroscope
Dear Mr. Glick:
This is in response to your correspondence of May 13, 2022, on behalf of your client, DanLaw, Inc. (DanLaw), in which you request reconsideration of Headquarters Ruling Letter (HQ) H323185, dated April 4, 2022, which pertained to the tariff classification under the Harmonized Tariff Schedule of the United States (HTSUS) of a certain automotive telematics device.
In HQ H323185, U.S. Customs and Border Protection (CBP) examined the classification of an article identified as the DCM970, described as follows:
The DCM970 is designed to be installed in a vehicle’s engine diagnostics (OBD-II) port. It is used to collect, analyze, and transmit data about the vehicle to a server via the global cellular network. The DCM970’s key components include an accelerometer/gyroscope, GPS, OBD-II code reader, and cellular modem/transceiver. The accelerometer/gyroscope detects gravitational force to collect data on braking, acceleration, and cornering. The GPS collects vehicle location data. The reader function is used to pull data from the car’s computer and sensors. The cellular modem/transceiver processes, converts, and transmits to servers the data collected by other components.
CBP classified the subject merchandise, by application of General Rules of Interpretation (GRIs) 1 and 3(c), under heading 9031, HTSUS, which provides for “[m]easuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter; profile projectors; parts and accessories thereof.”
You submit that the subject merchandise is properly classified under heading 8517, HTSUS, which provides for “[t]elephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network), other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528; parts thereof.” In your request for reconsideration, you state that HQ H323185 was based on an incorrect assumption regarding the overall function of the subject merchandise and the role of its constituent parts. Specifically, you claim that the DCM970 is a data transmission device that does not perform analytics; therefore, the description of this device in HQ H323185 as a device “used to collect, analyze and transmit data,” is partially incorrect. You further submit that the DCM970’s Global Positioning System (GPS) component is not used for navigation, but only to provide ground speed data.
The analysis set forth in your submission represents a fundamental misreading of HQ H323185. In this regard, we note that CBP applied Note 3 to Section XVI and Note 3 to Chapter 90 because the subject merchandise is a composite machine and therefore is properly classified according to its principal function. While the subject merchandise does feature a cellular modem or transceiver that, on its own, would likely be classified under heading 8517, HTSUS, the scope of that provision does not cover, on the basis of GRI 1, a device that also features a GPS component and an accelerometer/gyroscope (such as the subject merchandise). As such, the DCM970 is not itself a data transmission device of heading 8517, HTSUS. Moreover, in HQ H323185, we determined that the subject device does not principally function as a data transmission device, in that the GPS and accelerometer/gyroscope components perform functions that are equally important to the function of transmitting collected data. As such, we correctly applied GRI 3(c) to classify the merchandise under heading 9031, HTSUS.
You also argue that HQ H323185 failed to address that subheading 8517.12.00, HTSUS, was renumbered subheading 8517.14.00, HTSUS, effective January 27, 2022, prior to the issuance of HQ H323185. This fact was not raised in HQ H323185 because the renumbering of the six-digit subheadings inferior to heading 8517, HTSUS, is not germane to the classification of the subject merchandise. The threshold issue before us was to ascertain the correct classification of the merchandise at the four-digit heading level of the HTSUS. In this regard, we note that GRI 6 mandates that only provisions at the same level of indentation in the HTSUS should be compared.
Lastly, you argue that HQ H323185 had the effect of revoking or modifying CBP’s treatment of the DCM970 and reference prior protests that CBP granted, which allowed the instant DCM970 to be classified under heading 8517, HTSUS. The protests referenced in your submission are not tantamount to “treatment” under CBP regulations. Regardless, pursuant to 19 U.S.C. §1625(c), CBP issued HQ H312223, dated November 9, 2021, which revoked or modified any ruling or interpretive decision that classified substantially identical merchandise to reflect the analysis contained in that ruling (i.e., the classification of automotive telematics devices consisting of various configurations of cellular modem, GPS, code reader, accelerometer/gyroscopes, and magnetometer under subheading 9031.80.80, HTSUS), as well as any treatment previously accorded by CBP to substantially identical transactions. As the DCM970 is an automotive telematics device consisting of cellular modem, GPS, code reader and accelerometer/gyroscope, it is substantially identical to the devices described in HQ H312223. Therefore, as of the January 30, 2022, the effective date of HQ H312223, any prior CBP rulings or interpretive decisions on the DCM970 or substantially similar telematics devices, including the March 9, 2021, protest decisions involving classification of the DCM970, were revoked or modified, including any treatment of such goods. With respect to goods entered or withdrawn from warehouse for consumption after January 30, 2022, the classification of the DCM970 or substantially similar telematics devices is controlled by HQ H323185.
Based on the foregoing, and by application of GRIs 1, 3(c) and 6, the DataLogger DCM970 GEN 3 is classified under heading 9031, HTSUS, specifically subheading 9031.80.80, HTSUS, which provides for “[M]easuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter; profile projectors; parts and accessories thereof: other instruments, appliances and machines: other.” The general, column one rate of duty is free.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 9031.80.80, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, importers of goods of China classified under subheading 9031.80.80, HTSUS, must also report the Chapter 99 subheading, i.e., 9903.88.01.
The HTSUS is subject to periodic amendment, so reasonable care should be exercised in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the trade remedy initiated pursuant to Section 301 of the Trade Act of 1974, including information on exclusions and their effective dates, you may refer to the relevant parts of the USTR and CBP websites, which are available at https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china respectively.
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 U.S. International Trade Commission’s website at www.usitc.gov.
HQ H323185, dated April 4, 2022, is hereby AFFIRMED.
Sincerely,
Yuliya A. Gulis, Director
Commercial Trade and Facilitation Division