The tariff classification of electrical distribution enclosures from the Netherlands

N332995 May 31, 2023 CLA-2-85:OT:RR:NC:N2:220 CATEGORY: Classification TARIFF NO.: 8537.10.9170 Amanda Ribstein Kuehne + Nagel, Inc. 4100 North Commerce Drive East Point, GA  30344 RE:      The tariff classification of electrical distribution enclosures from the Netherlands Dear Ms. Ribstein: In your letter dated May 18, 2023, you requested a tariff classification ruling on behalf of your client, Longhorn Generation LLC. The merchandise under consideration is identified as the Minerbox, Model MB-V1M1S1, which is described as a 45 foot steel container equipped with mechanical equipment, such as racking, immersion tanks, electric pumps, heat exchangers, and various valves/piping.  The Minerbox is also equipped with electrical equipment, such as speed drive controllers, a programmable logic controller, several power distribution units, a power cabinet, and numerous electrical apparatus to distribute electricity throughout the enclosure.  Lastly, the Minerbox is equipped with telecommunication apparatus, such as Ethernet switches, which supply Internet connectivity to the machines that are installed within the immersion tanks.  The provided technical specifications indicate that the maximum voltage of the Minerbox enclosure is 480 V. In your letter you state that the intended use of the Minerbox is to house up to 240 cryptocurrency mining machines, which are installed at the customer’s installation site, and suggest the Minerbox is properly classified under subheading 8543.70.9860, Harmonized Tariff Schedule of the United States (HTSUS).  We disagree. The intended use of the Minerbox is to house and supply power to the mining machines, which are fixed within the immersion tanks where a dielectric fluid and the control systems/pumps maintain cooling from the heat generated by the mining machine’s power consumption.  While the Minerbox enclosure contains various cooling, electrical control, and communication apparatus, it is our view that the principal function of the subject enclosures is to distribute power to the mining machines installed therein.  As electrical distribution is provided for elsewhere, subheading 8543.70.9860, HTSUS, is not appropriate.  The applicable subheading for the Minerbox, Model MB-V1M1S1, will be 8537.10.9170, HTSUS, which provides for “Boards, panels, consoles, desks, cabinets and other bases, equipped with two or more apparatus of 8535 or 8536, for electric control or the distribution of electricity…: For a voltage not exceeding 1,000 V: Other: Other: Other”.  The general rate of duty will be 2.7 percent 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 World Wide Web at https://hts.usitc.gov/current. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). 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 Karl Moosbrugger at [email protected]. Sincerely, Steven A. Mack Director National Commodity Specialist Division