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HQ 088891

June 21, 1991

CLA-2 CO:R:C:M 088891 MBR


TARIFF NO.: 8531, 8537, 8527, 8525, 8517

Mr. Gordon W. Larson
4950 Gateway East
P.O. Box 144
El Paso, Texas 79942

RE: Home Alarm Systems; Components Shipped in Bulk Form; GRI 2(a); Incomplete or Unfinished Articles; Articles Presented Unassembled or Disassembled; Upgrade Kit; GRI 3(b); Set

Dear Mr. Larson:

This is in reply to your letter of March 6, 1991, requesting classification of bulk shipments of home alarm system components from Mexico, on behalf of Honeywell Protective Services Division, under the Harmonized Tariff Schedule of the United States Annotated (HTSUSA).


Presently, you import the following merchandise from Mexico in bulk form:

-Control panel boards for systems 1500, 1500e MOD II, 2000e, and 6000 (future system).

-Alphanumeric home security panel and security panels for system 1500, 1500e MOD II, 2000, and 6000.

-300 mhz Receiver.

-300 mhz Transmitters, models TH8802, and T8803.

-System 1500 dialer board.

-Hardwire expander boards, hardwire module boards, multiple receiver adapter boards, receiver interface boards, remote receiver adapter boards, PLC boards, alphanumeric HSP adapter boards, and end of line module boards.


Can a shipment of the above components be considered an unassembled, incomplete alarm system having the essential character of a complete or finished alarm system, under the Harmonized Tariff Schedule of the United States Annotated


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...."

You state:

The reason for requesting this ruling is that, prospectively, Honeywell, desires to enter shipments of these components as unassembled, essentially complete alarm systems under HTSUS 8531.10.00456 and are asking you to rule that this is the proper classification if the shipment consists of the correct components and quantities to qualify for that classification.

General Rule of Interpretation (GRI) 2(a), HTSUSA, states in part that a heading which provides for a particular article will cover that article incomplete or unfinished provided that, as imported, the unfinished article has the essential character of the complete or finished article. The rule also applies to incomplete or unfinished articles imported unassembled or disassembled provided that they are to be treated as complete or finished articles by virtue of the first part of GRI 2(a). The articles in this case are both incomplete and unassembled.

The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) although not dispositive, should be looked to for the proper interpretation of the HTSUSA. See 54 Fed. Reg. 35128 (August 23, 1989). The relevant ENs, page 2, provide some guidance on the application of GRI 2(a) to unassembled goods by stating that "when goods are so presented it is usually for reasons such as requirements or convenience of packing, handling or transport." The ENs provide further that for purposes of Rule 2(a) the expression "articles presented unassembled or disassembled" means articles the components of which are to be assembled either by means of simple fixing devices (screws, nuts, bolts, etc.) or by riveting or welding,
for example, provided only simple assembly operations are involved.

You have made no statements or offered any evidence that these proposed shipments would be anything more than bulk shipments of equal numbers of components. This is not the type of "convenience of packing, handling or transport" that the ENs contemplate. We have previously addressed this issue in HQ 087888, dated December 3, 1990, and held that these types of shipments are "nothing more than disparate components in bulk form."

However, see also HQ 088760, dated March 18, 1991, which held that when merchandise is shipped in "blister packs" and referred to as "kits" which require only a "nut-and-bolt assembly operation," they possess the essential character of a complete article.

You also inquire about the HTSUSA classification of "upgrade kits" which consist of up to 8 Alphanumeric HSPs and Alphanumeric Adapter Boards (designed to adapt the HSPs to the system to be upgraded). GRI 3(b) provides direction for the classification of goods put up in sets for retail sale. The rule states, in pertinent part:

Goods put up in sets for retail sale, which cannot be classified by reference to 3(a), shall be classified as if they consisted of the material or component which gives them their essential character...

The ENs for GRI 3(b), page 4, state:

(X) For the purposes of this Rule, the term "goods put up in sets for retail sale" shall be taken to mean goods which:

(a) consist of at least two different articles which are, prima facie, classifiable in different headings...;

(b) consist of products or articles put up together to meet a particular need or carry out a specific activity; and

(c) are put up in a manner suitable for sale directly to users without repacking (e.g., in boxes or cases or on boards).

The "upgrade kit" meets the first three criteria of the EN definition of "goods put up in sets for retail sale" because it: (1) consists of at least two different articles; (2) which are classifiable in different headings; (3) consists of articles put
up together to carry out a specific activity. However, it is not apparent whether or not the articles are put up in a manner suitable for sale directly to users without repacking. If they are so packaged, then we would conclude that the "upgrade kits" are goods put up in sets for retail sale.

Since the Alphanumeric Adapter Boards function merely to adapt the Alphanumeric HSPs to the system to be upgraded, we find that the Alphanumeric HSPs impart the essential character of the set.

Currently, you import the instant merchandise under a number of headings. These classifications are presently under review, and will be decided by HQ 088595.


The proposed shipments, as described, would not be considered to have the essential character of a complete home alarm system, because they are apparently nothing more than disparate components shipped in bulk form.

If the "upgrade kits" (consisting of up to 8 Alphanumeric HSPs and Alphanumeric Adapter Boards) are goods put up in sets for retail sale, they are determined to have the essential character of the Alphanumeric HSPs.


John Durant, Director

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