The tariff classification of a personal communicator (Model Number COM-1) from Japan

NY M87039 October 11, 2006 CLA-2-85:RR:NC:MM:109 M87039 CATEGORY: Classification TARIFF NO.: 8517.50.9000 Mr. Winston Symonds Senior Trade Specialist Sony Electronics, Inc. 16530 Via Esprillo San Diego, CA 92127 RE: The tariff classification of a personal communicator (Model Number COM-1) from Japan Dear Mr. Symonds: In your letter, which was received on September 26, 2006, you requested a tariff classification ruling. The merchandise subject to this ruling is a personal communicator. It is identified in your letter as Model Number COM-1. The COM-1 personal communicator is a hand-held device that weights about 6 ounces and dimensions of 124mm in width, 64mm in height, and 24mm in depth. The entire system is integrated in the same housing with the purpose of providing personal communication to the user as well as alternative functions. It allows the user to make telephone calls using voice over Internet protocol (VoIP) technology. The telephone calls can only be made to items that contain “Skype” software. In addition to the telephone calls, the COM-1, which runs on a Linux Operating System and a variety of application software packages, has the following applications or functions: access to web mail, Internet browsing, instant messaging/chat usage, picture viewer and storage, text editor, games, video through moving picture experts group (MPEG), and music through MPEG auto layer (MP3). Contained within the COM-1 is a central processing unit (CPU). The CPU is a Motorola Freescale microprocessor chip rated at greater than 200 MHz. The COM-1 also provides portable communication functions through instant messaging applications via the Internet (voice and text). The device communicates with a wireless local area network (LAN) in the 2.4 Giga hertz spectrum. The COM adheres to the 802.11b specification or wireless connectivity and it is WiFi certified by the U.S. Government. The COM-1 has no software development kit (SDK) to enable consumers to download off-the-shelf software programs. The channel of trade for this product will initially be Sony stores and the Sonystyle website. The COM-1 is packaged for retail sale with a headset, an AC adapter, battery, warranty card, start-up guide, and a CD-ROM, which includes software to be installed on a PC along with a detailed operation guide. The essential character of this item is the COM-1 itself. This device is equipped with a 2.4” liquid crystal display with a resolution of 320 x 240 pixels and a QWERTY style keyboard. It has a memory stick slot, which allows file transfer, and it has up to 1GB of internal flash memory capacity for music, games, and video. While the COM-1 will not be able to perform spreadsheet and calculator or database functions, it will be capable of word processing, receipt of email messages, Internet access, etc. Application software known as “Skype” enables the VoIP function and permits the COM-1 to communicate with any other article that also has the “Skype” software, such as a PC and a laptop computer. COM-1 can communicate directly to a cell phone, landline or wireless phone with a paid subscription to “Skypein.” That is, both caller and receiver must have the “Skype” software in order for the VoIP to work. Without the “Skype” software and a LAN connection, no voice communication is possible. The application software also enables instant messaging/chat, web mail, Internet browsing, music, games, and video capabilities. The COM-1 is able to record/download and play MP3 music and MPEG video through its USB 2.0 interface designed for high speed data transfer. As such, the COM-1 incorporates a single compact housing computer functions, a telecommunication function, and a record/play music and video function in MP3 and MPEG formats that run exclusively through the COM-1’s CPU. You suggested Harmonized Tariff Schedule (HTS) subheading 8525.20.3025, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Transmission apparatus for radiotelephony, radiotelegraphy or radiobroadcasting, whether or not combined, in the same housing with sound recording or reproducing apparatus or a clock: Transceivers: Hand-held: For frequencies exceeding 400 MHz." However, the COM-1’s wireless data communication capability is very limited. It requires both the sender and receiver to subscribe to a special service (the “Skypein”). Therefore, this office would not consider this function to be co-equal for a principal function determination. Additionally, the COM-1 would not qualify for classification under heading 8471 as ADP equipment either because the operating system does not accept off-the-shelf software. Therefore, it appears to be a closed system, one that is not freely programmable. The COM-1 also does not perform calculating functions. And, while it communicates within a LAN environment, it is a type of communication device that functions over the Internet, via the wide area network (WAN), whereby excluding it from heading 8471 as a LAN device. As such, the COM-1 is considered a telegraphic (voice, video, data, images, etc.) communications WAN device classifiable within heading 8517. Since the application software is not intended for the merchandise that it is being imported with, but rather for a PC or laptop computer, in accordance with Legal Note 6 it is not classified under a separate tariff number from that of the COM-1. The applicable subheading for the personal communicator (Model number COM-1) will be 8517.50.9000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “ Other apparatus for carrier-current line systems or for digital line systems: Other: Telegraphic: Other.” The rate of duty will be free. 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 World Wide Web at http://www.usitc.gov/tata/hts/. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). Pursuant to title 19 United States Code, Section 3005 The Harmonized Tariff Schedule of the United States is expected to be amended effective 1/1/07. The amendments are expected to affect the classification of your merchandise. Pursuant to Section 3005 c, the report recommending those changes has been sent to the President for proclamation of the changes. Upon the expiration of sixty legislative days, in the absence of Congressional action, the recommended changes will become law. Accordingly based on that recommendation, it is anticipated that your merchandise will be classified in 8517.62.0080 under the 2007 Harmonized Tariff Schedule. Under the circumstances, this classification under the 2007 tariff is advisory only. A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Linda M. Hackett at 646-733-3015. Sincerely, Robert B. Swierupski Director, National Commodity Specialist Division