CLA-2 CO:R:C:M 954093 MBR
Mr. Richard Kibler
Telematics International Inc.
1201 Cypress Creek Road
Ft. Lauderdale, Florida 33309
RE: Programmable Communication Processors PCP S240, S400, S4500,
5500; Packet Switching Backbone Node; X.25 Concentrator Node;
Multiprotocol Network Access Node; LAN; WAN; Automatic Data
Processing Machine; ADP; Control or Adapter Units; Telegraphic
Switch; HQ 086035 (revoked by HQ 951331); HQ 952628
Dear Mr. Kibler:
This is in response to your letter of March 29, 1993, to the
Area Director of Customs, New York Seaport, requesting
classification of automatic data processing ("ADP") Programmable
Communication Processors (models PCP S240, S400, S4500, 5500),
under the Harmonized Tariff Schedule of the United States
("HTSUS"). Your letter was forwarded to this office for reply.
FACTS:
The Telematics Programmable Communication Processors are
programmable processors utilizing Telematics, the proprietary TRAX
operating system, and can be configured to function as a packet
switching backbone node, an X.25 concentrator node, a multiprotocol
network access node, a gateway to LAN, WAN, private and public data
networks, and as a network management center. They are commonly
and commercially designated as "X.25 Packet Switches."
The PCP S240 consists of a 115/230 VAC chassis, 175 watt power
supply, a 68020 processor, space for up to two 4MB memory cards,
and either a 40MB or 100MB fixed disk. A number of options may be
added to the S240 including Line Processing Expanders, and Ethernet
Line Adapters, to provide specific telecommunication type
functions.
The PCP S400 consists of a 115/230 VAC chassis, a 68020
processor, space for up to two 4MB memory cards, a CPE transition
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card, an Input/Output Processor, and can be configured to host up
to two storage devices including a 640K microfloppy, a 40MB fixed
disk and a 100MB fixed disk. A number of options may be added to
the S400 including full duplex dual, quad, and octal channel
input/output cards to provide specific telecommunications type
functions.
The PCP S4500 consists of a 115/230 VAC chassis, up to three
68020 processors, and has space for up to four 4MB memory cards,
an Address Protection Module, a Network Communications Processor,
and can be configured to accommodate a 640KB microfloppy and up to
four 40MB or 100MB fixed disks. A number of options can be added
to the S4500 such as Line Processing Modules, Line Processing
Extenders, Ethernet Line Adapters, and Transmission Communications
Processors, to provide telecommunications type functions.
The PCP 5500 consists of a 115/230 VAC chassis, up to five
68020 processors, and has space for up to four 4MB memory cards,
an Address Protection Module, a Network Communications Processor,
up to two Transmission Communications Processor cards, and can be
configured to accommodate a 640KB microfloppy and up to four 40MB
or 100MB fixed disks. A number of options can be added to the
S5500 such as Ethernet Line Adapters, and Transmission
Communications Processors, to provide specific telecommunications
type functions.
ISSUE:
Are the Telematics "Programmable Communication Processors"
classifiable under subheading 8517.30.50, HTSUS, which provides for
telegraphic switching apparatus, or are they classifiable under
subheading 8471.99.15, HTSUS, which provides for ADP "control or
adapter units"?
LAW AND ANALYSIS:
Since the HTSUS came into effect there has been a great deal
of controversy regarding the classification of LAN boards.
However, there is no clear classification guidance from either the
HTSUS or the Harmonized Commodity Description and Coding System
Explanatory Notes (ENs), primarily due to the technological
advancements in this area.
In HQ 951331, dated September 18, 1992, we cited Legal Note
5(B) to chapter 84, HTSUS, which provides guidance regarding units
of automatic data processing machines. It states:
Automatic data processing machines may be in the form of
systems consisting of a variable number of separately housed
units. A unit is to be regarded as being a part of the
complete system if it meets all of the following conditions:
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(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 (it
must, in particular, unless it is a power supply unit,
be able to accept or deliver data in a form (code or
signals) which can be used by the system).
We agree that the PCPs are essential to the ADP systems with
which they are integrated because they process and format the data
of the computers they serve.
In HQ 951331 we also cited the ENs, pages 1299-1300, which
describe separately presented ADP units as follows:
This heading also covers separately presented constituent
units of data processing systems. Constituent units are those
defined in Parts (A) and (B) above as being parts of a
complete system.
Apart from central processing units and input and output
units, examples of such units include:
(4) Control and adaptor units such as those to 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.
However, it is our opinion that rather than "processing" being
the principal function of such Local Area Network ("LAN") and Wide
Area Network ("WAN") equipment, their principal function is, in
fact, to effectuate interconnection of the CPU unit to other units
or ADP machines, thereby serving "control" and "adaption"
functions. In HQ 951331 it was our opinion that the LAN equipment
did not have the essential character of control or adapter units
because of its processing capabilities. However, it has come to
our attention that the LAN equipment's processing capabilities are
designed principally to perform the control and adaption functions,
as described by the ENs.
The issue has been raised whether HQ 086035, dated August 2,
1990, is controlling since it classified a Digital Packet Network
under heading 8517, HTSUS. However, HQ 086035 was revoked by HQ
951331, dated September 18, 1992. The current legal precedent for
this merchandise is HQ 952628, dated October 13, 1992, which held
that a Packet Assembler/Disassembler was classifiable in subheading
8471.99.15, HTSUS, which provides for control or adapter units.
In HQ 952628 we stated:
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It is now our conclusion that the data processing features of
control and adaption do in fact represent the principal
function of the PAD unit, directing classification 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."
HOLDING:
The Telematics ADP Programmable Communication Processors
models PCP S240, S400, S4500, 5500, are properly classifiable under
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." The rate of duty is Free.
Sincerely,
John Durant, Director