CLA-2 OT:RR:CTF:TCM H281100 DSR
Mr. Pascale Panighel
Euro Communication Equipments
Route De Foix D117
Nevias 11500 France
RE: Revocation of NY N233202; tariff classification of SuperTooth Disco 2 Bluetooth Wireless Speaker from the Philippines
Dear Mr. Panighel:
In New York Ruling Letter (NY) N233202 (October 2, 2012), U.S. Customs and Border Protection (CBP) classified a device identified as the “SuperTooth Disco 2 Bluetooth Speaker” (hereinafter “Disco 2”) in subheading 8517.62.00, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Other apparatus for 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): Machines for the reception, conversion and transmission or regeneration of voice, images or other data, including switching and routing apparatus: Other." Since NY N233202 was issued, CBP has reviewed the ruling and determined that the classification provided for the Disco 2 is incorrect and, therefore, NY N233202 must be revoked for the reasons set forth in this ruling.
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, notice of the proposed revocation of NY N233202 was published on May 16, 2018, in the Customs Bulletin, Volume 52, No. 20. CBP received no comments in response to the notice.
The Disco 2 is a device that houses, among other things, two loudspeakers and a “bass reflex system,” or subwoofer. To enable connectivity, the Disco 2 also contains a CSR8645 Bluetooth chip that permits it to receive and transmit in the frequency range of 2.402-2.480 GHz. When paired with other Bluetooth devices, the unit communicates with those Bluetooth devices using a time division duplex scheme that alternates transmission and reception functions, and thus uses the same antenna to transmit and receive at different times. There is an internal BT radio, digital signal processor, and audio codec that are used to receive and decode streamed music from a mobile phone or any Bluetooth host device. There is also a headset that can communicate with other Bluetooth products that support AD2P/AVRCP Bluetooth profile. Contained within the Disco 2 is an 8 cell nickel-metal hydride (NiMH) rechargeable battery, which can be charged by the 14 volt direct current (DC) charging input. There are built-in buttons for adjustable volume, play/pause, and next/previous music search. The Bluetooth chip contained within has a 3.3 volt voltage regulation circuit, battery protection and a charging circuit.
Whether the Disco 2 is classified under subheading 8517.62.00, HTSUS, which provides for machines for the reception, conversion and transmission or regeneration of voice, images or other data; subheading 8518.22.00, which provides for multiple loudspeakers mounted in the same enclosure; or in subheading 8519.89.30, which provides for other sound recording or sound reproducing devices.
LAW AND ANALYSIS:
Classification under the HTSUS is determined in accordance with the General Rules of Interpretation (GRIs). 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. In addition, in interpreting the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989). The HTSUS provisions under consideration in this ruling are as follows:
8517 Telephone 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:
. . .
Other apparatus for 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):
. . .
8517.62.00 Machines for the reception, conversion and transmission or regeneration
of voice, images or other data, including switching and routing apparatus
* * *
8518 Microphones and stands therefor; loudspeakers, whether or not mounted in their
enclosures; headphones and earphones, whether or not combined with a
microphone, and sets consisting of a microphone and one or more
loudspeakers; audio-frequency electric amplifiers; electric sound amplifier sets;
. . .
Loudspeakers, whether or not mounted in their enclosures:
. . .
8518.22.00 Multiple loudspeakers, mounted in the same enclosure
* * *
8519 Sound recording or reproducing apparatus:
. . .
. . .
. . .
The EN to heading 85.17 provides, in pertinent part, the following:
This heading covers apparatus for the transmission or reception of speech or other sounds, images or other data between two points by variation of an electric current or optical wave flowing in a wired network or by electromagnetic waves in a wireless network. The signal may be analogue or digital. The networks, which may be interconnected, include telephony, telegraphy, radio-telephony, radio-telegraphy, local and wide area networks.
(II) OTHER APPARATUS FOR 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)
(F) Transmitting and receiving apparatus for radio-telephony and radio-telegraphy.
This group includes:
(1) Fixed apparatus for radio-telephony and radio-telegraphy (transmitters, receivers and transmitter-receivers). . . .
. . .
The EN to heading 85.18 provides, in pertinent part, the following:
This heading covers microphones, loudspeakers, headphones, earphones and audio-frequency electric amplifiers of all kinds presented separately, regardless of the particular purpose for which such apparatus may be designed (e.g., telephone microphones, headphones and earphones, and radio receiver loudspeakers).
The heading also covers electric sound amplifier sets.
. . .
(B) LOUDSPEAKERS, WHETHER OR NOT MOUNTED IN THEIR
The function of loudspeakers is the converse of that of microphones: they reproduce sound by converting electrical variations or oscillations from an amplifier into mechanical vibrations which are communicated to the air. . . .
Matching transformers and amplifiers are sometimes mounted together with loudspeakers. Generally the electrical input signal received by loudspeakers is in analogue form, however in some cases the input signal is in digital format. Such loudspeakers incorporate digital to analogue converters and amplifiers from which the mechanical vibrations are communicated to the air.
Loudspeakers may be mounted on frames, chassis or in cabinets of different types (often acoustically designed), or even in articles of furniture. They remain classified in this heading provided the main function of the whole is to act as a loudspeaker. Separately presented frames, chassis, cabinets, etc., also fall in this heading provided they are identifiable as being mainly designed for mounting loudspeakers; articles of furniture of Chapter 94 designed to receive loudspeakers in addition to their normal function remain classified in Chapter 94.
The heading includes loudspeakers designed for connection to an automatic data processing machine, when presented separately.
. . .
The EN to heading 85.19 provides, in pertinent part, the following:
This heading covers apparatus for recording sound, apparatus for reproducing sound and apparatus that is capable of both recording and reproducing sound. Generally, sound is recorded onto or reproduced from an internal storage device or media (e.g., magnetic tape, optical media, semiconductor media or other media of heading 85.23).
. . .
(IV) OTHER APPARATUS USING MAGNETIC, OPTICAL OR
The apparatus of this group may be portable. They may also be equipped with, or designed to be attached to acoustic devices (loudspeakers, earphones, headphones) and an amplifier.
. . .
As in N233202, we continue to hold that the Disco 2 performs two or more complementary functions and that, therefore, Note 3 to Section XVI is applicable. Note 3 to Section XVI, states the following:
Unless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines designed 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.
However, we no longer hold that that the principal function of the Disco 2 is to transmit and receive sounds or data. Specifically, we now believe that in NY N233202, CBP incorrectly reasoned that the Bluetooth chip (i.e., the component that imparts the transmission/reception functionality), rather than the loudspeaker, performs the principal function of this composite machine. Instead, we now find that the Disco 2 compares in functionality to a device that was the subject of H167260, issued before NY N233202 (on July 11, 2011), and that was classified in heading 8518 as a loudspeaker. In HQ H167260, the subject device is described as a “Jambox.” It is a Bluetooth-compliant wireless speaker with a built-in microphone. It is a portable device that connects to laptops, smart phones, tablets and mp3 players through a 3.5mm stereo wire, or via wireless Bluetooth technology, which enables it to play music stored on or streamed through such devices. When paired to a mobile telephone via Bluetooth, the Jambox will also function as a “speakerphone” – i.e., a device that enables its user to command the paired mobile telephone to dial calls, answer calls, and talk hands-free by broadcasting the call.
In H167260, CBP correctly determined that the principal function of the Jambox, which is functionally analogous to the Disco 2, is that of a loudspeaker. Accordingly, H167260 correctly held that, by operation of Note 3 to Section XVI, the Jambox is properly classifiable in subheading 8518.22.00, covering loudspeakers. Like the Jambox of HQ H167260, the principal function of the Disco 2 is to act as a loudspeaker, regardless of the manner in which that function is enabled by its Bluetooth capabilities. The Bluetooth feature enables the speaker to wirelessly connect to the source of the audio signals that the speaker converts into corresponding sounds. Thus, the Bluetooth feature functions essentially like a stereo wire, except it permits the connection to be wireless. Regardless of whether loudspeakers such as the Jambox or the Disco 2 are connected to the source of the audio signals by way of a stereo wire, or wirelessly via the Bluetooth transmission/reception functions, the principal function of such loudspeakers is not to connect to the source of the signal, but rather to convert such signal into sound – that is, to function as a loudspeaker. Accordingly, by operation of Note 3 to Section XVI and because the Disco 2 principally functions as a loudspeaker, it is properly classified under heading 8518, HTSUS, and not in heading 8517, which covers machines for the transmission or reception of data. Moreover, because the Disco 2 consists of multiple loudspeakers mounted in the same enclosure, it is properly classifiable in subheading 8518.22.00.
We also note that because the Disco 2 is unable to record sound or read a recorded file from an internal memory or from a USB flash memory device or other removable solid-state non-volatile media, the Disco 2 is functionally distinct from merchandise that is classifiable in heading 8519, which provides for sound recording or reproducing apparatus. In NY N133779 (December 17, 2010), for example, CBP considered a device identified as the “iHome Airplay Wireless Stereo Speaker System with Rechargeable Battery” (Model No. iW1). The device is described as being designed to play and control audio files that it receives over a wireless (“Wi-Fi”) computer network. It is composed of a Wi-Fi system that incorporates four built-in speakers, an audio controller, an auxiliary input jack, a USB port, and a built-in rechargeable lithium battery. It is designed to reproduce sound that it generates from externally stored digital audio files. It can also play back music when physically connected to such devices as an Apple iPod, iPhone or iPad. Upon connection to a wireless network, the device also receives digital audio files, e.g., within an iTunes library, that it converts into audio signals, and then amplifies and plays the audio through its four built-in speakers. The rechargeable, battery-operated device does not contain a tuner and is not capable of recording. The product page for the device indicates that the device “supports charging and local audio playback via USB using the USB sync cable that comes with new iPods and iPhones.” [Emphasis added] See https://www.ihomeaudio.com/iW1BC/. CBP classified the device as an “other” sound recording or reproducing apparatus of subheading 8519.89.30, HTSUS. Later, in HQ H234950, CBP affirmed the holding reached in NY N133779 and provided comprehensive guidance regarding the proper interpretation of the phrase “sound recording or reproducing” as contemplated by heading 8519, HTSUS. Specifically, in HQ H234950 CBP explained that, in accordance with the EN to heading 8519, a “sound-reproducing device” must be able to read a recorded file either from an internal memory or from a removable solid-state non-volatile medium, such as a USB flash memory apparatus:
[T]he ENs define a “sound-recording or reproducing device” as including one that functions by way of semiconductor media. Sound that is recorded onto such a medium is done so as digital code converted from analogue signal on the recording medium, and sound that is reproduced is done so by reading such medium. The fact that the ENs allow for semiconductor media to be either permanently installed in the apparatus or in the form of removable solid-state non-volatile storage media means that sound can be recorded onto an internal file or a removable solid state non-volatile media, such as a USB flash memory apparatus. In order for a device to be a sound-reproducing device, it must be able to read the recorded file, either from an internal memory or from a removable solid-state non-volatile media, such as a USB flash memory apparatus. See EN 85.19. [Emphasis added]
This definition is in accordance with definitions of dictionaries and other lexicographic sources. For example, the Oxford English Dictionary defines “record” as “of a machine, instrument or device: to set down (a message, reading, etc.) in some permanent form.” See www.oed.com. The Oxford English Dictionary defines “reproduce” as “To relay (sound originating elsewhere) or replay (sound recorded on another occasion) by electrical or mechanical means…. To produce again in the form of a copy.” See www.oed.com. In addition, the McGraw-Hill Encyclopedia of Science and Technology defines “sound recording” as “the technique of entering sound, especially music, on a storage medium for playback at a subsequent time.” See McGraw-Hill Concise Encyclopedia of Science and Technology, 6th Ed., 2009 at 2197. This encyclopedia defines “sound-reproducing systems,” in pertinent part, as:
Systems that attempt to reconstruct some or all of the audible dimensions of an acoustic event that occurred elsewhere. A sound-reproducing system includes the functions of capturing sounds with microphones, manipulating those sounds using elaborate electronic mixing consoles and signal processors, and then storing the sounds for reproduction at later times and different places.
Id. at 2197.
CBP then concluded that the products in question were sound reproducing devices of heading 8519, HTSUS, because they were able to read audio files from an inserted USB device. That conclusion is consistent with prior CBP rulings cited in HQ H234950. See NY N182121 (September 16, 2011); NY N129141 (November 16, 2010).
Unlike the devices considered in HQ H234950 and the rulings cited therein, the instant Disco 2 is unable to record files either from an internal memory or from a removable solid-state non-volatile media, nor can the Disco 2 reproduce said files – a requirement that must be met in order for the devices to meet the relevant definition of “sound recording or reproducing” devices. Accordingly, the Disco 2 is not classified as a sound recording or reproducing device within the scope of heading 8519, HTSUS.
By application of GRI 1 (Note 3 to Section XVI), the SuperTooth Disco 2 Bluetooth Wireless Speaker is classified in heading 8518, HTSUS, specifically in subheading 8518.22.00, HTSUS, which provides in pertinent part for: “… loudspeakers, whether or not mounted in their enclosures; …: … Loudspeakers, whether or not mounted in their enclosures: … Multiple loudspeakers, mounted in the same enclosure.” The current column one, general rate of duty is 2.4% ad valorem.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided at www.usitc.gov.
EFFECT ON OTHER RULINGS:
NY N233202, dated October 2, 2012, is revoked in accordance with this decision.
In accordance with 19 U.S.C. §1625(c), this ruling will become effective 60 days after publication in the Customs Bulletin.
Myles B. Harmon, Director
Commercial and Trade Facilitation Division