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HQ 085328

August 9, 1989

CLA-2 CO:R:C:G 085328 MBR


TARIFF NO.: 8471.92.40

Mr. William D. Outman
Baker & McKenzie
Suite 1100
815 Connecticut Ave., N.W.
Washington, D.C. 20006-4078

RE: Display Unit with cathode-ray tube, for incorporation into an IBM PS/2 Model 25 System Unit ("Display Unit"), and Display Subassembly with cathode-ray tube, for incorporation into Model 3180 Display Station ("Display Subassembly")

Dear Mr. Outman:

This is in reply to your letter of April 12, 1990, on behalf of International Business Machines Corporation ("IBM"), requesting classification of; 1) Display Unit for incorporation into an IBM PS/2 Model 25 System Unit ("Display Unit"); and 2) Display Subassembly for incorporation into Model 3180 Display Station ("Display Subassembly"), under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).


The IBM PS/2 ADP Display Unit consists of the following components: ADP cathode-ray tube assembly (12" white phosphor monochrome or RBG color), video circuits, analog circuits, power supply, fan chassis, analog/RF shielding, signal interconnect cables and bezel. This Display Unit is a fully assembled unit (functional) designed for incorporation into the PS/2 Model 25 ADP System (a demonstration was provided).

The IBM 3180 Display Subassembly consists of the following components: 15" green phosphor monochrome ADP cathode-ray tube, chassis, mounting bracket, video circuits, yoke assembly. yoke connector, analog circuits, analog shield, AC harness, keylock and bezel. It only requires the addition of a power supply, fan, housing and knobs. In its condition as imported, it is functional (a demonstration was provided).


What are the classifications of the IBM PS/2 Display Unit and the IBM 3180 Display Subassembly, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA)?


The General Rules of Interpretation (GRI's) to the HTSUSA govern the classification of goods in the tariff schedule. GRI 1 states, in pertinent part:

...classification shall be determined according to the terms of the headings and any relative section or chapter notes...

Note 5(B) of Chapter 84, HTSUSA, states:

(B) 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:

(a) It is connectable to the central processing unit ("CPU") 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).

Such units entered separately are also to be classified in heading 8471.

The instant Display Unit and Display Subassembly are connectable to the CPU, are specifically designed as part of such system and are capable of accepting or delivering data. The Display Unit and Display Subassembly clearly meet the requirements of Chapter 84, Note 5(b) and are therefore properly described as ADP "units."

Chapter 85, HTSUSA, Additional U.S. Note 5(b), provides, in pertinent part:

Picture tubes imported in combination with, or incorporated into, other articles are to be classified in subheadings 8540.11 through 8540.12, inclusive, unless they are--

(b) incorporated into fully assembled units such as word processors, ADP terminals, or similar articles;

The instant Display Units and Display Subassemblies are "fully assembled" units since they are functional. The Display Units and Display Subassemblies, in their condition as imported, are capable of displaying the output of a compatible signal when electricity is supplied.

Additional U.S. Note 6, Chapter 85, HTSUSA, states:

For the purposes of additional U.S. note 5 above the term "complete television receivers" means television receivers, fully assembled in their cabinets....

Thus, a clear distinction has been drawn between "complete" and "fully assembled" in that the term "complete" only refers to television receivers and requires them to be "fully assembled" and "in their cabinets." Note 5 does not require that ADP units be "complete," but only that they be "fully assembled." Therefore, the term "fully assembled" does not require the same degree of completion as "complete." It is Customs position that units that are functional, are "fully assembled."

Furthermore, the HTSUSA contemplated that an ADP unit may be either for physical incorporation into another ADP machine or unit, or a separately housed unit, by specific 8471 subheadings for "units suitable for physical incorporation into ADP machines or units" under the subheadings for Other Input or Output Units, Storage Units and Other Units. Therefore, absent specific language distinguishing between "for physical incorporation" versus "separately housed," an 8471 subheading then may cover both units for physical incorporation into other ADP machines or units and those units designed to be separately housed. See HQ 085541 (January 10, 1990) and HQ 085392 (November 22, 1989) for similar holdings on similar merchandise.


The IBM PS/2 Model 25 System Display Unit with cathode-ray tube and the Display Subassembly with cathode-ray tube, for the Model 3180 Display Station, are classifiable under 8471.92.40, HTSUSA, which provides for: "[a]utomatic data processing machines and units thereof; [i]nput or output units, whether or not entered with the rest of a system...: [o]ther: [d]isplay units: [o]ther." The rate of duty is 3.7% ad valorem.


John Durant, Director

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