CLA-2 CO:R:C:M 950410
Mr. S. Richard Shostak
Stein Shostak Shostak & O'Hara
3580 Wilshire Boulevard, Suite 1240
Los Angeles, CA 90010-2597
RE: Teradata Corporation Relational Database Processors;
Automatic Data Processing; Control or Adapter Unit; ADP;
Ethernet Adapter
Dear Mr. Shostak:
This is in response to your letter of September 9, 1991, on
behalf of the Teradata Corporation, requesting classification of
various Relational Database Processors and Ethernet Adapters,
under the Harmonized Tariff Schedule of the United States
(HTSUS).
FACTS:
The Teradata DBC/1012 is a high performance, fault-tolerant
computer system optimized for relational database management.
This microprocessor-based system is expandable in small modules
of processing and storage capacity. The minimum configuration
includes a processor subsystem and a storage subsystem, providing
up to 24 MIPS (millions of instructions per second) of processing
capacity and up to 19 gigabytes of storage capacity, depending on
options. The system can be expanded to more than 3 BIPS
(billions of instructions per second) and nearly 5 terabytes of
data storage, all operating as a single system with a single
image.
The Computer Glossary, by Alan Freedman (1989), defines a
"Relational Database" as:
A method for organizing files in a database that
specifically prohibits linking one file to another. In
hierarchical and network databases, records in one file
point to the locations of records in another file, such as
customers to orders and vendors to purchases. These
relationships are linked within the system to provide for
fast processing. In a relational database, relationships
between files are strictly logical
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through matching account numbers and names, for example....
The objective of a relational database, introduced in
1970 by Edgar Codd, is that ad hoc requests for data can be
easily accommodated. A relational system can take any two
or more files, and, based on any matching conditions between
them, can generate a new file containing the records that
meet the matching criteria....
Most personal computer database management systems use
the relational method. Mainframe and minicomputer databases
provide relational capability along with traditional
hierarchical, network and other structures. Most database
systems today claim relational capability as long as any ad
hoc request can be accommodated.
The submitted literature states that the DBC/1012 integrates
three types of processors: Interface Processors (IFPs), Access
Module Processors (AMPs), and Communications Processors (COPs).
The IFP provides connection to mainframe hosts; the AMP
manipulates the database, accesses Disk Storage Units (DSUs) and
prepares the data results; the COP provides connection to a local
area network, enabling user access from minicomputers,
workstations and personal computers.
ISSUE:
Whether the DBC/1012 relational database processors and
Ethernet adapters are classified within heading 8517, HTSUS, as
"Electrical apparatus for line telephony or telegraphy, including
such apparatus for carrier-current line systems; parts
thereof...", or within heading 8471, HTSUS, as "Automatic data
processing machines and units thereof...."
LAW AND ANALYSIS:
The classification of merchandise under the HTSUS is
governed by the General Rules of Interpretation (GRI's). GRI 1
states in part:
for legal purposes, classification shall be determined
according to the terms of the headings and any relative
section or chapter notes...
The competing headings in the instant case are headings 8517
and 8471, HTSUS. These headings describe:
8517 Electrical apparatus for line telephony
or telegraphy, including such apparatus for
carrier-current line systems; parts
thereof...
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8517.40.70 Other apparatus, for carrier-current
line systems: Other: Telegraphic
* * * * * * * * * * * * *
8471 Automatic data processing machines and units
thereof...Other
8471.99.15 Other: Control or adapter units
Chapter 84, Legal Note 5, HTSUS, defines the term "automatic
data processing machines" for the purposes of heading 8471,
HTSUS. Chapter 84, Note 5(A)(a) states that "automatic data
processing machines" includes:
Digital machines, capable of (1) storing the processing
program or programs and at least the data immediately
necessary for execution of the program; (2) being
freely programmed in accordance with the requirements
of the user; (3) performing arithmetical computations
specified by the user; and, (4) executing, without
human intervention, a processing program which requires
them to modify their execution, by logical decision
during the processing run..."
Legal Note 5(b) further provides that ADP machines may be in
the form of systems consisting of a variable number of separately
housed units. A unit must meet the following requirements to be
regarded as part of a complete system:
(a) It is connectable to the central processing unit either
directly or through one or more other units; and
(b) It is specifically designed as part of such a system.
HQ 089828, dated December 3, 1991, and HQ 085666, dated
November 8, 1989, held that certain communications controllers
imported by IBM and Fujitsu America, respectively, were
classifiable under subheading 8471.99.15, HTSUSA, which provides
for automatic data processing machines and units thereof, other
control or adapter units. You argue that the instant IFPs, AMPs,
and COPs, are similar, and therefore, should be similarly
classifiable. We agree. The Teradata DBC/1012 Data Base
Computer System is essentially a high capacity, highly diverse,
front end processor. This system has taken over certain
processing functions originally performed by the CPU of an ADP
system. The result is that the main frame host computer spends
less time servicing the database and the network and CPU
resources are available for more application processing.
The Harmonized Commodity Description and Coding System
Explanatory Notes (ENs) to heading 8471, HTSUS, defines "control
or
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adapter units" as follows:
[Units which] effect interconnection of the central
processing unit to other digital data processing
machines, or to groups of input or output units which
may comprise visual display units, remote terminals,
etc.
The DBC/1012 provides interconnection of the CPU (host
computer) to other ADP units (storage units and remote
terminals). Therefore, it is properly classifiable within
subheading 8471.99.15, HTSUS, which provides for: "[a]utomatic
data processing machines and units thereof...: [o]ther: [o]ther:
[c]ontrol or adapter units."
Customs has consistently held that the most important factor
to be considered when classifying merchandise such as this, is
whether the merchandise is principally used for the processing of
data (heading 8471, HTSUS), or for the transmission of data
between two points (heading 8517, HTSUS). The DBC/1012 Data Base
Computer is designed specifically for applications involving
complex queries utilizing a large data base. Thus, the instant
merchandise is found to be principally designed and used for the
processing of data.
Pursuant to GRI 2(a) regarding incomplete or unfinished
articles, we find that a substantially complete importation has
the essential character of the complete or finished article and
is classifiable as such. When separately imported, each of the
COPs, AMPs, and IFPs, have the essential character of a control
or adapter unit, and would all remain classifiable in subheading
8471.99.15, HTSUS. However, any separately imported Ethernet
Adapters would be classifiable in subheading 8517.40.70, HTSUS.
For similar holdings regarding similar merchandise, see HQ
089828, dated December 3, 1991, and HQ 085666, dated November 8,
1989.
HOLDING:
The Teradata Data Base Computer System model DBC/1012, which
integrates Interface Processors (IFPs), Access Module Processors
(AMPs), and Communications Processors (COPs), is classifiable in
subheading 8471.99.15, HTSUS, which provides for: "[a]utomatic
data processing machines and units thereof...: [o]ther: [o]ther:
[c]ontrol or adapter units," when imported together as a system.
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When separately imported, the IFPs, AMPs, and COPs remain
classifiable in 8471.99.15, HTSUS. The Ethernet Adapter,
separately imported, would be classifiable in subheading
8517.40.70, HTSUS.
Sincerely,
John Durant, Director
Commercial Rulings Division