CLA-2 R:C:M 957743 LTO

Mr. Dennis Heck
Tower Group International
5420 West 104th Street
Los Angeles, California 90045-6069

RE: Video Door Phone Surveillance Monitoring System; camera unit; monitor unit; HQs 087404, 088748, 957722; DD 806755 modified; GRI 3; composite good; EN to GRI 3(b); EN to section XVI; section XVI, notes 3 and 4; subheading 8517.81.00

Dear Mr. Heck:

This is in response to your letter of March 22, 1995, requesting, on behalf of Vivitar Corporation, reconsideration of DD 806755, dated March 7, 1995, concerning the classification of a video door phone surveillance monitoring system and components thereof under the Harmonized Tariff Schedule of the United States (HTSUS). Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. 1625(c)(1)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. No. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed modification of DD 806755 was published August 2, 1995, in the Customs Bulletin, Volume 29, Number 31.

FACTS:

The article in question is the SMS-4 Video Door Phone Surveillance Monitoring System (056434). The system is a complete home or office security system which provides two-way audio and one-way video communication. The system consists of a 4-inch monochrome monitor, charge-coupled device (CCD) monochrome entry camera unit with mounting kit, switching unit, 66-foot extension cord and AC/DC adaptor. The - 2 -

CCD camera can be hardwired to the monitor by means of the existing door bell wiring, or, if for a new installation, a single or coaxial cable (not included) may be used.

The SMC-401B CCD Entry Camera (056442) is a water resistant, shock-proof camera that incorporates a 2 x 3 inch oval speaker and microphone for hands-free video and audio capability. The camera utilizes solid-state electronic technology and incorporates a CCD. The camera's power is supplied by the SMS-4R 4" Monitor (056443), which is a monochrome monitor with a 4 inch (10.1 cm visual display diagonal) flat cathode ray tube (CRT). The monitor, which also incorporates a speaker and microphone, is powered by a 110V AC/22V DC adaptor. The optional GSU-4 Switching Unit (056467) is a switch box which allows the connection of up to four cameras to the monitor unit. The GA04 AC/DC Adaptor (056468) is an 11V AC22V DC adaptor and is used to power the monitor, as well as the entire system. The GC-66 66-foot Extension Wire (056466) is an insulated wire with fittings.

The system is often installed in apartment buildings to permit communication between a monitor located inside an apartment and an external unit located on an outside door. The external unit, consisting of the CCD camera, is connected to the internal monitor, which enables the resident to see and talk to the visitor.

ISSUE:

Whether the Video Door Phone Surveillance Monitoring System is classifiable according to General Rule of Interpretation 3, HTSUS, under heading 8517, HTSUS, which provides for electrical apparatus for line telephony, or heading 8525, HTSUS, which provides for television transmission apparatus.

LAW AND ANALYSIS:

The General Rules of Interpretation (GRI's) to the HTSUS govern the classification of goods in the tariff schedule. GRI 1 states, in pertinent part, that "for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes . . . ."

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System. While not legally binding, and therefore not dispositive, the ENs provide a commentary on the scope of each heading of the Harmonized System, and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

In DD 806755, issued to you on March 7, 1995, the Video Door Phone Surveillance Monitoring System was held to be classifiable under subheading - 3 -

8517.81.00, HTSUS, which provides for other electrical apparatus for line telephony. You contend that the system is classifiable under subheading 8525.30.90, HTSUS, which provides for other television cameras.

The Video Door Phone Surveillance Monitoring System consists of a CCD camera, monochrome video monitor, switching unit, AC adaptor and extension wire. Both the CCD camera and monochrome monitor incorporate a speaker and microphone. Classification of the camera unit and monitor unit, when imported separately, is based on note 3 to section XVI, HTSUS, which provides as follows:

composite machines consisting of two or more machines fitted together to form a whole and other machines adapted for the purpose of performing two or more complementary or alternative functions are to be classified as if consisting only of that component or as being that machine which performs the principal function.

The audio (speaker and microphone) and video (camera or monitor) components of the camera unit and monitor unit are equally important to the overall functioning of each unit. It is therefore our opinion that it is not possible to determine which component performs each unit's "principal function." Thus, in accordance with GRI 1, note 3 to section XVI, HTSUS, and based on the principles of GRI 3(c) (see General EN to section XVI, pg. 1133), the camera unit is classifiable under subheading 8525.30.90, HTSUS, while the monitor unit is classifiable under subheading 8528.20.00, HTSUS, which provides for black and white or other monochrome video monitors. See HQ 957722, issued to you on May 12, 1995 (although not specified, a CCD camera and monitor, imported separately, were similarly classified in accordance with note 3 to section XVI, HTSUS).

If imported separately, the switch box is classifiable under subheading 8537.10.90, HTSUS, which provides for other panels for electric control or the distribution of electricity. The AC/DC adaptor is classifiable under subheading 8504.40.80, HTSUS, which provides for other static converters. Both were properly classified in DD 806755. Further, the extension wire, which was not considered in DD 806755, is classifiable under subheading 8544.41.00, HTSUS, which provides for insulated wire, fitted with connectors, for a voltage not exceeding 80 V.

As there is no single heading that covers all of the components of this system, it is necessary to resort to GRI 3, HTSUS, which governs the classification of goods that are, prima facie, classifiable under two or more headings. GRI 3(a) requires that the heading which provides the most specific description shall be preferred to headings - 4 -

providing a more general description. However, when two or more headings each refer to part only of the components contained in a composite good, those headings are to be regarded as equally specific in relation to those goods. Headings 8504, 8525, 8528, 8537 and 8544, HTSUS, each refer to part only of the components of the Video Door Phone Surveillance Monitoring System. Accordingly, no heading provides a specific description of the system.

GRI 3(b), HTSUS, provides that "composite goods consisting of different materials or made up of different components, . . . which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable." The system consists of components which are separable but can be attached by cables. The components are "adapted one to the other and are mutually complementary," in that they form a system that is designed to provide two-way audio and one-way video communication. See EN to GRI 3(b), pg. 4. Moreover, as the camera unit and monitor unit have specially designed housings and/or mounting brackets, "the design and intended use of these components would prevent them from normally being sold separately." See HQ 087404, dated December 7, 1990; HQ 957722. Thus, the system is a GRI 3(b) composite good, and it is classifiable as if consisting of the component which gives the system its "essential character."

The various components of the camera unit and monitor unit work together to provide audio and video communication. The microphone of the camera unit and the speaker of the monitor unit (and vice versa) function together to provide two-way audio communication. The camera of the camera unit and the monitor of the monitor unit function together to provide one-way video communication. As both units are necessary to perform either audio or video communication, it is our opinion that they play an equal role in relation to the use of the system, and that neither gives the system its essential character. Thus, it is necessary to resort to GRI 3(c), which states that "[w]hen goods cannot be classified by reference to 3(a) or 3(b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration." The primary components of the system are the camera unit and monitor unit, and therefore, the switching unit, adaptor and extension wire do not merit equal consideration. Accordingly, the Video Door Phone Surveillance Monitoring System is classifiable under heading 8528, HTSUS, specifically under subheading 8528.20.00, HTSUS. DD 806755 is modified with regard to the classification of the complete system, as well as, the camera unit and monitor unit, when imported separately.

The Video Door Phone Surveillance Monitoring System cannot be classified according to note 3 to section XVI, HTSUS. The system consists of components connected either by means of existing wiring or a single or coaxial cable. It does not - 5 -

consist of machines "fitted together to form a whole." See General EN to section XVI, pg. 1133 (machines must be "incorporated one in the other or mounted one on the other, or mounted on a common base or frame or in a common housing"). Further, the system does not consist of machines adapted to perform "complementary or alternative functions." See General EN to section XVI, pg. 1132 (i.e., "machine-tools for working metal using interchangeable tools, which enable them to carry out different machining operations . . . ."). Thus, reference to note 3 to section XVI, HTSUS, in this instance is misplaced.

Finally, we note that the system cannot be classified according to note 4 to section XVI, HTSUS, as a "functional unit." While the system does consist of individual components, interconnected by electric cables or other devices, the components do not "contribute together to a clearly defined function covered by one of the headings in chapter 84 or chapter 85 . . . (emphasis added)."

HOLDING:

The SMS-4 Video Door Phone Surveillance Monitoring System is classifiable, according to GRI 3(c), under subheading 8528.20.00, HTSUS, which provides for black or white video monitors. The corresponding rate of duty for articles of this subheading is 5% ad valorem.

If imported separately, the SMC-401B Charge-Coupled Device Monochrome Camera is classifiable under subheading 8525.30.90, HTSUS, which provides for other television cameras (3.8% ad valorem). The SMS-4R Monitor is classifiable under subheading 8528.20.00, HTSUS (5% ad valorem). The GSU-4 Switching Unit is classifiable under subheading 8537.10.90, HTSUS, which provides for other panels for electric control or the distribution of electricity (4.8% ad valorem). The GC-66 66-foot Extension Wire is classifiable under subheading 8544.41.00, HTSUS, which provides for insulated wire, fitted with connectors, for a voltage not exceeding 80 V (4.8% ad valorem). The GA04 AC/DC Adaptor is classifiable under subheading 8504.40.80, HTSUS, which provides for other static converters (2.7% ad valorem).

In accordance with 19 U.S.C. 1625(c)(1), this ruling will become effective 60 days after publication in the Customs Bulletin. Publication of rulings or decisions pursuant to 19 U.S.C. 1625(c)(1) does not constitute a change of practice or position in accordance with section 177.10(c)(1), Customs Regulations (19 CFR 177.10(c)(1)).

EFFECT ON OTHER RULINGS:

DD 806755, dated March 7, 1995, is modified with regard to the classification of - 6 -

the Video Door Phone Surveillance Monitoring System, as well as the camera unit and monitor unit, when imported separately.


Sincerely,

John Durant,
Director
Commercial Rulings
Division