CLA-2 OT:RR:CTF:EMAIN H298118 PF
Port Director, Los Angeles/Long Beach Seaport U.S. Customs and Border Protection 301 E. Ocean Boulevard Long Beach, CA 90802
Attn: Ann Marie Vargas, Import Specialist
Re: Protest and Application for Further Review No: 2704-16-101638; Classification of a power bank
Dear Port Director:
The following is our decision as to Protest and Application for Further Review No. 2704-16-101638, which was filed on December 13, 2016 on behalf of Argento SC by Sicura Inc. (“protestant”). The protest pertains to the classification of a power bank under the Harmonized Tariff Schedule of the United States (“HTSUS”).
The subject merchandise was entered by protestant between August 25, 2015 and November 11, 2015. Between July 8, 2016 to September 23, 2016, U.S. Customs and Border Protection (“CBP”) at the Port of Los Angeles liquidated the entries under subheading 8507.60.00, HTSUS, which provides for “Electric storage batteries, including separators therefor, whether or not rectangular (including square); parts thereof: Lithium-ion batteries.”
On December 13, 2016, protestant filed a protest and AFR regarding the tariff classification of the subject merchandise and claimed that the correct classification of the subject merchandise should be in subheading 8504.40.95, HTSUS, which provides for “Electrical transformers, static converters (for example, rectifiers) and inductors; parts thereof: Static converters: Other.”
FACTS:
The subject power bank is a universal, portable device which stores energy and acts as power source for electronic devices, including smart cell phones that incorporate a USB connection. The power bank device consists of a lithium-ion rechargeable battery within a housing. The power bank is packaged with a micro USB charging cable and features a built-in flashlight and an LED indicator. The power bank can be recharged via its micro USB port using the included micro USB charging cable and another USB power source. Once the charge is completed, the power bank can be connected to an electronic device and electrical power will flow from the power bank to the electronic device, providing power and recharging the battery of the electronic device. The packaging of the power bank indicates that it provides 4000 mAh, up to 2.5x extra battery life, and an additional 30 hours of cell phone talk time.
ISSUE:
Whether the power bank that charges electronic devices is classified as a static convertor of heading 8504, HTSUS, or as electric storage battery of heading 8507, HTSUS?
LAW AND ANALYSIS:
Initially, we note that the matters protested are protestable under 19 U.S.C. §1514(a) (2) as decisions on classification. The protest was timely filed, within 180 days of liquidation of the first entry. (Miscellaneous Trade and Technical Corrections Act of 2004, Pub.L. 108-429, § 2103(2) (B) (ii), (iii) (codified as amended at 19 U.S.C. § 1514(c) (3) (2006)). Further Review of Protests No. 3004-17-100339 is properly accorded to Protestant pursuant to 19 C.F.R. §174.24(b) because Protestant alleges that the decision against which the instant protest is filed involves questions of law or fact upon which the Commissioner of Customs, his designee, and the Customs courts have not ruled.
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (“GRIs”) and, in the absence of special language or context which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
GRI 1 requires that classification be determined first 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 heading and legal notes do not otherwise require, the remaining GRIs 2 through 6 may then be applied in order.
The 2016 HTSUS headings under consideration are as follows:
8504 Electrical transformers, static converters (for example, rectifiers) and inductors; parts thereof:
8507 Electric storage batteries, including separators therefor, whether or not rectangular (including square); parts thereof:
The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).
The EN to heading 8504, HTSUS, states, in pertinent part, the following:
The apparatus of this group are used to convert electrical energy in order to adapt it for further use. They incorporate converting elements (e.g., valves) of different types. They may also incorporate various auxiliary devices (e.g., transformers, induction coils, resistors, command regulators, etc.). Their operation is based on the principle that the converting elements act alternatively as conductors and non-conductors.
The fact that these apparatus often incorporated auxiliary circuits to regulate the voltage of the emerging current does not affect their classification in this group, nor does the fact that they are sometimes referred to as voltage or current regulators.
This group includes:…
(D) Direct current converters by which direct current is converted to a different voltage…
This heading also includes stabilised suppliers (rectifiers combined with a regulator), e.g., uninterruptible power supply units for a range of electronic equipment.
The EN to heading 8507, HTSUS, states, in pertinent part, the following:
Electric accumulators (storage batteries or secondary batteries) are characterised by the fact that the electrochemical action is reversible so that the accumulator may be recharged. They are used to store electricity and supply it when required. A direct current is passed through the accumulator producing certain chemical changes (charging); when the terminals of the accumulator are subsequently connected to an external circuit these chemical changes reverse and produce a direct current in the external circuit (discharging). This cycle of operations, charging and discharging, can be repeated for the life of the accumulator.
Accumulators consist essentially of a container holding the electrolyte in which are immersed two electrodes fitted with terminals for connection to an external circuit. In many cases the container may be subdivided, each subdivision (cell) being an accumulator in itself; these cells are usually connected together in series to produce a higher voltage. A number of cells so connected is called a battery. A number of accumulators may also be assembled in a larger container. Accumulators may be of the wet or dry cell type…
Accumulators are used for supplying current for a number of purposes, e.g., motor vehicles, golf carts, fork-lift trucks, power hand-tools, cellular telephones, portable automatic data processing machines, portable lamps….
Accumulators containing one or more cells and the circuitry to interconnect the cells amongst themselves, often referred to as "battery packs", are covered by this heading, whether or not they include any ancillary components which contribute to the accumulator’s function of storing and supplying energy, or protect it from damage, such as electrical connectors, temperature control devices (e.g., thermistors), circuit protection devices, and protective housings. They are classified in this heading even if they are designed for use with a specific device.
The subject power bank is a universal, portable, and rechargeable electric storage device. It is an external power source, consisting of a rechargeable lithium-ion battery, that is used to provide power to, and recharge, the internal batteries of various electronic devices, including smart cell phones, which incorporate a USB connection. The power bank can be recharged via its micro USB port using the included micro USB charging cable and another USB power source. Once the charge is completed, the power bank can be connected to an electronic device and electrical power will flow from the power bank to the electronic device, providing power and recharging the battery of the electronic device.
Heading 8507, HTSUS, provides for “Electric storage batteries, including separators therefor, whether or not rectangular (including square); parts thereof.” Electric accumulators of this heading, which the ENs specifically call storage batteries or secondary batteries, are characterized by the fact that the electrochemical action is reversible so that the accumulator may be recharged. See EN 85.07. EN 85.07 also notes that accumulators are used to store electricity and supply it when required. Furthermore, accumulators remain classified in heading 8507, HTSUS, even if they include ancillary components which contribute to the accumulators’ function of storing and supplying energy, or protecting it from damage, such as electrical connectors, temperature control devices, circuit protection devices, and protective devices. Accumulators are classified in heading 8507, HTSUS, even if they are designed for use with a specific device.
In the present case, the subject power bank is used as a rechargeable accumulator for the purpose of storing electricity and supplies that energy to various electronic devices when needed. As such, the subject power bank meets the terms of heading 8507, HTSUS, and because it is comprised of a lithium-ion battery, is specifically provided for in subheading 8507.60.00, HTSUS.
Our decision is consistent with Headquarters Ruling (“HQ”) H249299, dated July 13, 2015, in which CBP ruled that battery packs that stored and supplied electricity to the batteries of electronic devices were accumulators of heading 8507, HTSUS. CBP reasoned that heading 8507, HTSUS, provided for battery packs, whether or not they included ancillary components, because they contributed to the accumulator’s function of storing and supplying energy. See also New York Ruling (“NY”) N288408, dated August 16, 2017 (classifying a power bank that consisted of a rechargeable lithium-ion battery that stored and provided energy to electronic devices in heading 8507, HTSUS) and NY R04091, dated June 14, 2006 (classifying a power bank battery pack which was comprised of a lithium-ion rechargeable battery that was used to provide power to electronic devices in heading 8507, HTSUS).
Protestant asserts that the subject power bank should be classified in subheading 8504.40.95, HTSUS, which provides for “Electrical transformers, static converters (for example, rectifiers) and inductors; parts thereof: Static converters: Other.” However, heading 8504, HTSUS, provides for electric transformers, static convertors, and inductors, and the function of storing and supplying electrical current is not covered by heading 8504, HTSUS. As such, classification within heading 8504, HTSUS, is not applicable.
Protestant also relies on NY L80190, dated November 4, 2004 to support classifying an emergency power backup device in heading 8504, HTSUS. The merchandise in NY L80190 was stated to function as an emergency power bank device, and stored power from an AC power adapter, computer USB port, or by hand winding the device. CBP classified the device in heading 8504, HTSUS. NY L80190 is distinguishable because the device at issue was a composite machine of various components, including a battery and a generator. In the present case, it is clear that the sole function of the power bank is that of a battery, which is provided for in heading 8507, HTSUS.
HOLDING:
By application of GRI 1, the power bank is classified in heading 8507, HTSUS. By application of GRI 6, the power bank is classified in subheading 8507.60.00, which provides for “Electric storage batteries, including separators therefor, whether or not rectangular (including square); parts thereof: Lithium-ion batteries.” The 2016 general column one, rate of duty is 3.4% 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 on the internet at www.usitc.gov/tata/hts/.
You are instructed to DENY the Protest.
In accordance with Sections IV and VI of the CBP Protest/Petition Processing Handbook (HB 3500-08A, December 2007, pp. 24 and 26), you are to mail this decision, together with the CBP Form 19, to the Protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings, will make the decision available to CBP personnel, and to the public on the CBP website at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division