CLA-2 CO:R:C:M 952668 MBR
Mr. Tom Milhon
Director of Administration
NEC America, Inc.
110 Rio Robles
San Jose, CA 95134-1899
RE: Video Teleconferencing Network; VisualLink 5000; Acoustic Echo
Canceler models AEC-400, and AEC-700; VoicePoint AEC-40;
Transmission Apparatus for Television; Microphone/Speaker Set;
Electrical Machines N.S.P.F.
Dear Mr. Milhon:
This is in reply to your letter of May 21, 1992, requesting
classification of video teleconferencing network components
including the VisualLink 5000, the Acoustic Echo Canceler models
AEC-400, and AEC-700, and the VoicePoint AEC-40, under the
Harmonized Tariff Schedule of the United States (HTSUS).
FACTS:
The imported items are components of a video teleconferencing
network. The importations consist of the VisuaLink 5000, the
Acoustic Echo Canceler (models AEC-400 and AEC-700), and the
VoicePoint AEC-40.
The VisuaLink 5000 is a video codec (coder and decoder) which
uses video compression technology to create motion video
transmission for closed circuit broadcast applications. This high
compression technology allows digital transmission with enhanced
video and audio quality within a narrow bandwidth, and enhanced
data transmission speed ranging from 56 kb/sec up to 2.048 mb/sec.
The VoicePoint AEC-40 is a table-top speaker unit which
incorporates acoustic room echo cancellation technology to provide
for voice transmissions without an echo or line feedback. It is
designed for connection to a regular phone and phone line
extension. Very sensitive microphones are built into the four
corners of the VoicePoint. Control functions include "CONF" for
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group conference calling, "MIC OFF" to mute the microphones for
private discussion, and volume control.
The Acoustic Echo Canceler models AEC-400 and AEC-700 are
described as audio systems which may be used in either terrestrial
or satellite transmission media. They both incorporate VLSI
circuitry which enables the elimination of feedback echo within a
room and a transmission echo caused by telephone system hybrid
circuits during voice transmission in a teleconference. The AEC-
400 has balanced microphones with a built-in power supply which
allows a simultaneous two-way conversation. The AEC-700 has a 10W
main power speaker amplifier.
ISSUE:
What is the classification of a video teleconferencing network
including the VisualLink 5000, the Acoustic Echo Canceler models
AEC-400, and AEC-700, and the VoicePoint AEC-40, under the
Harmonized Tariff Schedule of the United States (HTSUS)?
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:
...classification shall be determined according to the terms
of the headings and any relative section or chapter notes...
The VisuaLink 5000 is a video codec (coder and decoder) which
uses video compression technology to create motion video
transmission for closed circuit broadcast applications, and is
classifiable pursuant to GRI 1 under subheading 8525.10.20, HTSUS,
which provides for: "[t]ransmission apparatus for radiotelephony,
radiotelegraphy, radiobroadcasting or television, whether or not
incorporating reception apparatus or sound recording or reproducing
apparatus; television cameras: [t]ransmission apparatus:
[t]elevision."
The VoicePoint AEC-40 is a table-top speaker unit which
incorporates acoustic room echo cancellation technology to provide
for voice transmissions without an echo or line feedback. Very
sensitive microphones are built into the four corners of the
VoicePoint. It is classifiable pursuant to GRI 1 under subheading
8518.30.20, HTSUS, which provides for: "[m]icrophones....and
combined microphone/speaker sets: [h]eadphones, earphones and
combined microphone/speaker sets: [o]ther."
The Acoustic Echo Canceler models AEC-400 and AEC-700
eliminate echo and feedback caused by acoustic coupling between
microphone and loudspeaker. The AEC-400 has an acoustic echo
canceler, an audio amplifier, auxiliary echo control, a
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transmission echo canceler, a line interface, and a remote control.
The AEC-700 has an acoustic echo canceler, a two wire telephone
add-on function, audio cassette interface, microphone and speaker
amplifiers, and a remote control. The AEC-400 and AEC-700 are
composite machines which are classifiable pursuant to Section XVI,
Legal Note 3, regarding composite machines. Legal Note 3 states:
3. Unless the context otherwise requires, 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.
It is Customs position that due to the design, and importance
of function, the acoustic echo cancellation is the principal
function of both the AEC-400 and the AEC-700. However, there is
no specific provision for machines having the function of acoustic
echo cancellation. The Harmonized Commodity Description and Coding
System Explanatory Notes (ENs), page 1402, state that heading 8543,
HTSUS, provides for similar merchandise including, inter alia:
(4) Mixing units, used in sound recording for combining the output
from two or more microphones; they are sometimes combined with
an amplifier...
(5) Noise reduction units for use with sound recording apparatus.
You argue that since the instant merchandise incorporates an
amplifier, they should be classified under the provision for
amplifiers. However, we do not find that the amplifiers impart the
principal function of this composite machine, and, as stated above
in EN (4), the incorporation of an amplifier does not necessarily
dictate the classification of a machine.
Therefore, the AEC-400 and AEC-700 are classifiable in
subheading 8543.80.90, HTSUS, which provides for: "[e]lectrical
machines and apparatus, having individual functions, not specified
or included elsewhere in this chapter: [o]ther machines and
apparatus: [o]ther."
HOLDING:
The VisuaLink 5000 is classifiable under subheading
8525.10.20, HTSUS, which provides for: "[t]ransmission apparatus
for radiotelephony, radiotelegraphy, radiobroadcasting or
television, whether or not incorporating reception apparatus or
sound recording or reproducing apparatus; television cameras:
[t]ransmission apparatus: [t]elevision." The rate of duty is 3.7%
ad valorem.
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The VoicePoint AEC-40 is classifiable in subheading
8518.30.20, HTSUS, which provides for: "[m]icrophones....and
combined microphone/speaker sets: [h]eadphones, earphones and
combined microphone/speaker sets: [o]ther." The rate of duty is
4.9% ad valorem.
The AEC-400 and AEC-700 are classifiable in subheading
8543.80.90, HTSUS, which provides for: "[e]lectrical machines and
apparatus, having individual functions, not specified or included
elsewhere in this chapter: [o]ther machines and apparatus:
[o]ther." The rate of duty is 3.9% ad valorem.
Sincerely,
John Durant, Director