CLA-2 OT:RR:CTF:EMAIN H320247 NVF
Michael K. Tomenga
Neville Peterson LLP
One Exchange Plaza
55 Broadway, Suite 2602
New York, New York 10006
RE: Tariff classification of Globalstar SPOT X® Bluetooth® from China.
Dear Mr. Tomenga:
This is in response to your letter of March 15, 2021, submitted on behalf of Globalstar Inc. (“Globalstar), requesting a prospective ruling (“ruling request”) on the classification of the SPOT X® Bluetooth® (“SPOT X Bluetooth”) personal locator beacon under the Harmonized Tariff Schedule of the United States (“HTSUS”). In reaching the determination below, we have considered information presented in your March 15, 2021 letter (hereinafter “ruling request”), public information from the Globalstar website, information presented during the conference between your firm and CBP on October 21, 2021, and supplemental information provided on March 29, 2022.
FACTS:
The SPOT X Bluetooth is rectangular handheld device with a screen and QWERTY keyboard that has a GPS receiver and transmitter and a few buttons. It is intended for use by people when they travel to remote, rugged locations without cellular phone service. The device operates using a satellite telecommunications transmitter and receiver that transmits and receives data utilizing Globalstar’s proprietary satellite wireless telecommunications network. The primary feature of the device is automatic, motion-activated tracking that can be monitored by the user’s contacts. The SPOT X Bluetooth has various other location-related functions: it can send a pre-written check-in message with GPS location to the user’s contacts; receive and compose SMS messages; if the SOS button is pushed, it will send an emergency distress signal and GPS information to local response teams; and the user can push the help button to send a non-emergency assistance signal to the user’s contacts along with GPS information if the user needs assistance. The Spot X Bluetooth can also update social media pages and contains an electronic compass and altimeter. If the Bluetooth feature is activated, users can pair the SPOT X Bluetooth with a smart device for data exchange, composing, sending, and viewing messages, and programming.
ISSUE:
Whether the SPOT X Bluetooth is classified as other apparatus for the transmission or reception of voice, images or other data in heading 8517, HTSUS, or as other radio navigational aid apparatus in heading 8526, HTSUS.
LAW AND ANALYSIS:
Classification of goods under the HTSUS is governed by the General Rules of Interpretation (GRI). GRI 1 provides that classification 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 will then be applied in order.
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).
Therefore, the HTSUS headings under consideration 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
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8526 Radar apparatus, radio navigational aid apparatus and radio remote control apparatus:
Note 3 to Section XVI of the HTSUS, which encompasses Chapter 85, states:
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.
GPS receivers are not specifically provided for in the HTSUS. However, CBP has consistently classified GPS receivers in subheading 8526.91, HTSUS, which provides for radio navigational aid apparatus. See, e.g., HQ H014564 (Dec. 6, 2017) (Holux GPS Receiver Set), N26635 (July 16, 2015) (LugTrack GPS tracking device for luggage), N267981 (Sep. 21, 2015) (Crane bluetooth GPS watch), and HQ 955510 (Sep. 15, 1994) (GPS cards for PC). Moreover, EN 85.26(1) states, in pertinent part, that heading 8526, HTSUS “also includes global positioning system (GPS) receivers.”
The Spot X Bluetooth is virtually identical to the SPOT X, which we considered in HQ H300872 (Sept. 30, 2019). In HQ H300872, we determined that the SPOT X was a composite good consisting of, among others, a GPS receiver and a transmitter and that it was classified under heading 8526, HTSUS because the GPS receiver imparted the essential character of the device. In our analysis, we observed that
The SPOT X must be able to discern its location via GPS receiver in order to transmit that location via transmitter. Without the GPS receiver, the motion-activated tracking, emergency signal, and non-emergency signal cannot function as intended. While the SPOT X is capable of receiving and sending text messages from contacts or local authorities, the presence of a custom messaging feature does not outweigh the primary GPS tracking function of the SPOT X.
In this case, the only difference between the SPOT X in HQ H300872 and the instant device is the added Bluetooth function. However, we note that the SPOT X Bluetooth is intended for use in areas without cellular network coverage and tethering a cell phone to the SPOT X Bluetooth feature consequently does not impact the principal function of the SPOT X. Since the tethered smart device would have no network connectivity, it could only be used to access and interact with the tethered SPOT X Bluetooth. This limited interaction provides only minor access and control functionality. Therefore, the Bluetooth feature does not significantly impact the function of the device, and we conclude that the SPOT X Bluetooth is classified in heading 8526, HTSUS, alongside the other SPOT products that we have classified in prior rulings.
In your ruling request, you assert that the SPOT X Bluetooth is classified pursuant to General Rule of Interpretation (“GRI”) 1 under heading 8517, HTSUS, as other apparatus for the transmission of voice, images, or other data. You argue that Note 4 to Section XVI of the HTSUS and the Explanatory Notes to heading 8517 also compel classification under heading 8517. Specifically, you contend that the SPOT X Bluetooth is designed to transmit data, and therefore should be classified under heading 8517 pursuant to Note 4.
Note 4 to Section XVI states:
Where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in chapter 84 or chapter 85, then the whole falls to be classified in the heading appropriate to that function.
In this case, we find that Note 4 is not applicable to the SPOT X Bluetooth. The SPOT X Bluetooth is not comprised of individual machines fitted together as described in Note 4. Note 4 applies to individual machines that are connected, but not fitted together. See, e.g., NY N324745 (Mar. 23, 2022) (diaper making machine), HQ H310170 (June 25, 2021) (liquefied natural gas plant), HQ H302168 (Jan. 8, 2021) (distillation refining module). The SPOT X Bluetooth is not made up of distinct machines that are connected, but rather is a single composite machine, made up of components that are fitted into a single unit. Therefore, Note 3 to Section XVI applies rather than Note 4.
You also argue that the Explanatory Notes indicate that the SPOT X Bluetooth should be classified under heading 8517. Specifically, you contend that the SPOT X Bluetooth is described by all the exemplars listed in EN 85.17, including automatic transmitters and special receivers for distress signals, transmitter/receivers of telemetric signals, portable receivers, and other communications apparatus. However, this argument ignores Note 3 to Section XVI, which states that a composite device is to be classified as if only consisting of that machine which performs the principal function. Therefore, it is axiomatic that portions of the SPOT X Bluetooth will be described by other headings, such as heading 8517. As such, this does not disturb our finding that the GPS receiver performs the principal function of the SPOT X Bluetooth.
Additionally, you contend that heading 8517 is a use provision and we should apply the Lenox factors when considering the principal use of the SPOT X Bluetooth. However, this argument also ignores Note 3 to Section XVI. Leaving aside the requestion of whether heading 8517, HTSUS, is a use provision or eo nominee provision, the SPOT X is not covered entirely by heading 8517, HTSUS, or heading 8526, HTSUS. Rather, it is a composite machine that functions principally as a GPS receiver.
Finally, you argue that the SPOT X Bluetooth is analogous to various personal fitness devices classified under heading 8517 in HQ H279898 (Apr. 5, 2017) (Fitbit workout device), HQ H260060 (July 14, 2015) (Apple watch), H257947 (July 14, 2015) (Samsung Gear LiveAndroid wearable smart device), HQ H273382 (Jan. 3, 2017) (Garmin VivoActive and VivoSmart), HQ H265035 (Jan. 19. 2016) (Microsoft Band fitness tracker), HQ H286610 (Aug. 8, 2017) (Garmin Vivofit 3 and Vivofit Jr. Bluetooth), and HQ H285617 (May 18, 2018) (hybrid smart watch).
The fitness trackers in the CBP rulings you refer to are not analogous to the SPOT X Bluetooth because they do not function in the same manner. The fitness trackers are wearable personal fitness trackers/monitors designed to connect via Bluetooth to the user’s smartphone or other device and which are used to convey and/or control information collected either by the fitness tracker or the portable device to which they are connected. This information includes but is not limited to: tracking heart rate (Fitbit, Apple watch, Samsung Gear, Microsoft Band), tracking time slept (Fitbit, Microsoft Band), displaying the phone number of incoming calls or text messages (Fitbit, Apple watch, Samsung Gear, Microsoft Band), accessing contacts on a smartphone (Samsung Gear, Fitbit), and controlling a television (Apple watch). Notably, the fitness trackers cannot perform the full range of functions for which they are marketed until they are paired via Bluetooth to a smartphone or other portable device. HQ H279898 at 7, HQ H260060 at 2, H257947 at 6, HQ H273382 at 5, HQ H265035 at 5.
By contrast the SPOT X Bluetooth does not need to connect to a smart device via its Bluetooth functionality in order to perform its full range of tracking and communication functions. It is capable of independently accessing GPS location data and transmitting such data, along with messages, without being connected to another device. Additionally, the SPOT X Bluetooth does not function as controllers in the same manner as the personal fitness trackers. Therefore, the SPOT X Bluetooth is not analogous to personal fitness trackers.
In light of the foregoing, we find that the principal function of the SPOT X Bluetooth is performed by the GPS receiver. Therefore, the SPOT X Bluetooth is classified under heading 8526, HTSUS, which provides for “radar apparatus, radio navigational aid apparatus and radio remote control apparatus.” This is consistent with our classification decision in HQ H300872.
HOLDING:
By operation of GRIs 1 (Note 3 to Section XVI) and 6, the SPOT X Bluetooth is classified in heading 8526.91.00, HTSUS. The column one, general rate of duty for merchandise of subheading 8526.91.00, HTSUS is free.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8526.91.00, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.01, in addition to subheading 8526.91.00, HTSUS, listed above.
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/.
A copy of this ruling letter should be attached to the entry documents filed at the time the goods are entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Gregory Connor, Chief
Electronics, Machinery, Automotive, and
International Nomenclature Branch