CLA-2 CO:R:C:M 957025 KCC
Assistant District Director
U.S. Customs Service
Commercial Operations Division
35 W. Service Road
Champlain, New York 12919
RE: Protest 0712-94-100698; shunt reactor; EN 84.05; transformer; inductor; TCR 431.24 A;
Dear Assistant District Director:
This is in regards to Protest 0712-94-100698, concerning the tariff classification power
shunt reactors under the Harmonized Tariff Schedule of the United States (HTSUS). Literature
describing the shunt reactor was submitted for our examination.
The article under consideration is the power shunt reactor. The protestant states that the
voltage classification of the shunt reactor is 362 kV(voltage).75 MVA(reactive power). The
shunt reactor is used in conjunction with transformers on long distance transmission lines used to
carry high voltage electrical power from the generating station to the load (city, factory, etc.).
The shunt reactor creates an effect which absorbs or offsets the capacitive effect along a
transmission line which enables long distance transmission at high kilovoltage levels. The shunt
reactor consists of a core, winding, electrical connections, tank, oil (i.e., liquid dielectric),
bushings, cooling equipment, and an oil conservator.
The entries of the shunt reactor were liquidated on March 25, 1994, under subheading
8504.50.00, HTSUS, as other inductors. In a protest timely filed on June 23, 1994, the protestant
contends that the shunt reactor is classified under subheading 8504.23.00, HTSUS, as liquid
dielectric transformers, having a power handling capacity exceeding 10,000 kVA. The protestant
contends that the shunt reactor is, additionally, classified under subheading 9905.85.15, HTSUS,
as transformers exceeding 10,000 kVA having an individual voltage classification of 765 kV or
The subheadings at issue are as follows:
8504 Electrical transformers, static converters (for example, rectifiers) and inductors; parts
8504.23.00 Liquid dielectric transformers...Having a power handling capacity exceeding
8504.50.00 Other inductors.
9905.85.15 Goods originating in the territory of Canada under general note 3(c)(vii) of the
tariff schedule...Auto-transformers having an individual base MVA exceeding 100
MVA but not exceeding 300 MVA, regardless of voltage classification, and
transformers, other than auto-transformers, having an individual base MVA
exceeding 50 MVA but not exceeding 275 MVA, regardless of voltage
classification, and transformers exceeding 10,000 kVA having an individual
voltage classification of 765 kV or greater (provided for in subheading
1. Is the shunt reactor classified under subheading 8504.23.00, HTSUS, as liquid dielectric
transformers, having a power handling capacity exceeding 10,000 kVA, or under subheading
8504.50.00, HTSUS, as other inductors?
2. If the shunt reactor is classified under subheading 8504.23.00, HTSUS, is it classifiable
under subheading 9905.85.15, HTSUS, as transformers exceeding 10,000 kVA having an
individual voltage classification of 765 kV or greater.
LAW AND ANALYSIS:
The classification of merchandise under the HTSUS is governed by the General Rules of
Interpretation (GRI's). GRI 1, HTSUS, states, in part, that "for legal purposes, classification shall
be determined according to the terms of the headings and any relative section or chapter notes...."
In understanding the language of the HTSUS, the Harmonized Commodity Description
and Coding System ENs may be utilized. The ENs, although not dispositive, provide a
commentary on the scope of each heading of the HTSUS and are generally indicative of the
proper interpretation of the HTSUS. See, T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23,
1989). EN 85.04 (pgs. 1337-1340) states, in pertinent part, that:
(I) ELECTRICAL TRANSFORMERS
Electrical transformers are apparatus which, without having any moving parts, transform,
by means of induction and using a preset or adjustable system, an alternating current into
another alternating current of different voltage, impedance, etc. These usually consists of
two or more coils of insulated wire wound on laminated iron cores, although in some
cases (e.g., radio-frequency transformers) there may be no magnetic core, or the core may
be of agglomerated iron dust, ferrite, etc. An AC in one coil (the primary circuit) induces
an AC usually at different values of current and voltage in the others (the secondary
The heading covers all transformers. They vary from small types used in wireless sets,
instruments, toys, etc., to large types enclosed in oil tanks or equipped with radiators,
fans, etc., for cooling purposes. The large types are used in electricity stations, stations
for interconnecting mains, distributing stations or sub-stations. The frequency may vary
from mains frequencies up to very high radio frequencies.
The power-handing capacity of a transformer is the kilovolt-ampere (kVA) output based
on continual use at the rated secondary voltage (or amperage, when applicable) and at the
rated frequency without exceeding the rated temperature limitations....
These consist essentially of a single coil of wire which, inserted in an AC circuit, limits or
prevents by its self-induction the flow of the AC. They vary from small chokes used in
wireless circuits, instruments, etc., to large coils often mounted in concrete, used in power
circuits (e.g., for limiting the flow of current in the event of a short circuit).
Inductors or inductances obtained in the form of individual components by a printing
process remain classifiable in this heading.
We note that in TCR 431.24 A (April 18, 1966), Customs classified a shunt reactor, which
limited the flow of current in the electrical circuits in the event of a short, in item 682.60, Tariff
Schedules of the Untied States (TSUS) (the precursor provision to subheading 8504.50.00,
HTSUS), as inductors. However, the shunt reactors under consideration do not appear to be
described as transformers or inductors in EN 85.04. Moreover, the IEEE Standard Dictionary of
Electrical or Electronic terms, Fourth Edition (1988), defines shunt reactor as:
Shunt reactor (power and distribution transformer). A reactor intended for connection in
shunt to an electric system for the purpose of drawing inductive current.
Based on the submitted information and the IEEE definition, we are of the opinion that the shunt
reactor is considered to be a transformer by the electric power industry. The protestant's
information states that the shunt reactor in this case has a liquid dielectric with a power handling
capacity exceeding 10,000 kVA. Therefore, the shunt reactor is classified under subheading
8504.23.00, HTSUS, as liquid dielectric transformers, having a power handling capacity
exceeding 10,000 kVA.
Additionally, the protestant states that the shunt reactor is classifiable under subheading
9905.85.15, HTSUS. To be classified under subheading 9905.85.15, HTSUS, the shunt reactor
must first be considered an "originating good" for purposes of the United States-Canada Free
Trade Agreement (CFTA) pursuant to General Note 3(c)(vii), HTSUS. Although no information
was provided regarding CFTA eligibility, we assume a determination was made that the shunt
reactor is eligible for CFTA preferential treatment pursuant to General Note 3(c)(vii), HTSUS.
This assumption is based on the liquidation duty rate of 1.5 % ad valorem under subheading
8504.50.00, HTSUS, the special duty rate for CFTA goods.
Assuming that the shunt reactor is "[g]oods originating in the territory of Canada under
general note 3(c)(vii)...", we may proceed to whether it is classifiable under subheading
9905.85.15, HTSUS. The protestant states that the voltage classification of the shunt reactor is
362 kV.75 MVA. However, the protestant has not provided any additional information in
support of this classification. Based on the information contained in the protest, it does not
appear that the shunt reactors are described in subheading 9905.85.15, HTSUS.
The shunt reactor is classified under subheading 8504.23.00, HTSUS, as liquid dielectric
transformers, having a power handling capacity exceeding 10,000 kVA. The shunt reactors are
not described in and, therefore, are not classifiable under subheading 9905.85.15, HTSUS.
The protest should be GRANTED IN PART and DENIED IN PART, as described above.
In accordance with section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993,
Subject: Revised Protest Directive, this decision should be mailed by your office to the protestant
no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance
with this decision must be accomplished prior to the mailing of the decision. Sixty days from the
date of this decision, the Office of Regulations and Rulings will take steps to make the decision
available to Customs personnel via the Customs Rulings Module in ACS and to the public via the
Diskette Subscription Service, Freedom of Information Act and other public access channels.
John Durant, Director
Commercial Rulings Division