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HQ 960282

October 22, 1998

CLA-2 RR:CR:GC 960282 RFA


TARIFF NO.: 8528.21.39

Ms. Andrea E. Migdal
Gray Cary Ware & Freidenrich
4365 Executive Drive, Suite 1600
San Diego, CA 92121-2189

RE: Multimedia Monitor; Video Monitor; ADP Output Unit; Headings 8471 and 8528; Composite Machine; NAFTA; Legal Note 3 to Section XVI; GRI 3(c); EN 84.71(I)(D); General EN (VI) to Section XVI; General Note 12(t)/85.92C

Dear Ms. Migdal:

This is in response to your letter dated April 21, 1997, on behalf of Hitachi Home Electronics (America), Inc. [hereinafter referred to as "Hitachi"], concerning the tariff classification of a 36 inch data display monitor under the Harmonized Tariff Schedule of the United States (HTSUS). In preparing this ruling, we also considered the information provided with your letters of May 8 and October 16, 1997. We regret the delay.


The merchandise is described as a 36 inch color CRT display monitor with stereo speakers, I2C bus controls, and DPMS low-power mode. It is a processor controlled multi-sync, auto-synchronizing horizontally at 31.5 kHz, and vertically at 60 Hz and 70 Hz. The monitor is for use in 640 x 480 VGA [a computer industry display standard] non-interlaced, underscanned, overscanned modes of operation. The CRT dot pitch is 0.8mm at the center of the screen. The video bandwidth of the monitor is 17.5 MHZ.

The monitor will be enhanced TV grade, utilizing a Dynamic Focus or Dynamic Beam Forming picture tube, capable of displaying high quality text, graphics and video. No tuner will be included. The monitor processes a standard NTSC television signal through the computer and converts the signal from an interlaced signal (every other line scanned) to an non-interlaced configuration (every line scanned). Computers use non-interlaced scanning (it eliminates the 'flicker' of interlaced television scanning).

The monitor will house Infrared (IR) circuitry. Connected to the IR circuitry on the front panel of the monitor will be buttons labeled as follows: "Channel ^", "Channel v", "Volume ^", "Volume v", "TV Setup", "Enter", and "Power". The monitor will use VESA DDC2B to control brightness, contrast, horizontal size and position, vertical size and position, side pincushion, tilt, volume, balance, color temperature, service controls, and degauss.


Is the 36 inch monitor classifiable as an automatic data processing (ADP) display unit or as video monitor under the HTSUS?

Does the 36 inch monitor qualify for preferential treatment under the North American Free Trade Agreement (NAFTA)?


Classification of merchandise under the HTSUS is in accordance with the General Rules of Interpretation (GRI's). GRI 1 provides that classification shall be determined according to the terms of the headings and any relative section or chapter notes.

Legal Note 3 to Section XVI, HTSUS, which covers the goods in chapters 84 and 85, states that: "[u]nless the context otherwise requires, composite machines consisting of two or more machines fitted together to form a whole and other machines adapted 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."

The Harmonized Commodity Description and Coding System Explanatory Notes (EN) constitute the official interpretation of the HTSUS. While not legally binding or 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 FR 35127, 35128 (August 23, 1989). General EN (VI) to Section XVI, states the following guidelines in determining whether merchandise is a multi-function machine and/or a composite machine:

In general, multi-function machines are classified according to the principal function of the machine.

Where it is not possible to determine the principal function, and where, as provided in Note 3 to the Section, the context does not otherwise require, it is necessary to apply General Interpretative Rule 3 (c); such is the case, for example, in respect of multi-function machines potentially classifiable in several of the headings 84.25 to 84.30, in several of the headings 84.58 to 84.63 or in several of the headings 84.69 to 84.72.

Composite machines consisting of two or more machines or appliances of different kinds, fitted together to form a whole, consecutively or simultaneously performing separate functions which are generally complementary and are described in different headings of Section XVI, are also classified according to the principal function of the composite machine.

The subject merchandise meets the definition of "composite machines" because it is a machine adapted for the purpose of performing two or more complementary or alternative functions (e.g., displaying computer images and television/video images). Therefore, the subject merchandise must be classified as if consisting only of that component or as being that machine which performs the principal function.

The courts have provided factors, which are indicative but not conclusive, to apply when determining the principal function of the merchandise. The factors include such things as general physical characteristics, expectation of the ultimate purchaser, channels of trade, environment of sale (accompanying accessories, manner of advertisement and display), use in the same manner as merchandise which defines the class, economic practicality of so using the import, and recognition in the trade of this use. See Lenox Collections v. United States, 19 CIT 345, 347 (1995); Kraft, Inc. v. United States, 16 CIT 483 (1992); G. Heileman Brewing Co. v. United States, 14 CIT 614 (1990); and United States v. Carborundum Company, 63 CCPA 98, C.A.D. 1172, 536 F.2d 373 (1976), cert.denied, 429 U.S. 979 (1976).

Counsel states that the monitor has the general physical characteristics of ADP display units under heading 8471. EN 84.71(D) for heading 8471 states that:

Among the constituent units included are display units of automatic data processing machines which provide a graphical presentation of the data processed. They differ from the video monitors and television receivers of heading 85.28 in several ways, including the following:

(1) Display units of automatic data processing machines are capable of accepting a signal only from the central processing unit of an automatic data processing machine and are therefore not able to reproduce a colour image from a composite video signal whose waveform conforms to a broadcast standard (NTSC, SECAM, PAL, D-MAC, etc.). They are fitted with connectors characteristic of data processing systems (e.g., RS-232C interface, DIN or SUB-D connectors) and do not have an audio circuit. They are controlled by special adaptors (e.g., monochrome or graphics adaptors) which are integrated in the central processing unit of the automatic data processing machine.

(2) These display units are characterized by low electromagnetic field emissions. Their display pitch size starts at 0.41 mm for medium resolution and gets smaller as the resolution increases.

(3) In order to accommodate the presentation of small yet well-defined images, display units of this heading utilize smaller dot (pixel) sizes and greater convergence standards than those applicable to video monitors and television receivers of heading 85.28. (Convergence is the ability of the electron gun(s) to excite a single spot on the face of the cathode-ray tube without disturbing any of the adjoining spots).

(4) In these display units, the video frequency (bandwidth), which is the measurement determining how many dots can be transmitted per second to form the image, is generally 15 MHZ or greater. Whereas, in the case of video monitors of heading 85.28, the bandwidth is generally no greater than 6 MHZ. The horizontal scanning frequency of these display units varies according to the standards for various display modes, generally from 15 kHz to over 155 kHz. Many are capable of multiple horizontal scanning frequencies. The horizontal scanning frequency of the video monitors of heading 85.28 is fixed, usually 15.6 or 15.7 kHz depending on the applicable television standard. Moreover, the display units of automatic data processing machines do not operate in conformity with national or international broadcast frequency standards for public broadcasting or with frequency standards for closed-circuit television.

(5) Display units covered by this heading frequently incorporate tilt and swivel adjusting mechanisms, glare-free surfaces, flicker-free display, and other ergonomic design characteristics to facilitate prolonged periods of viewing at close proximity to the unit.

The subject merchandise is capable of displaying a CPU signal and a composite video signal whose waveform conforms to a broadcast standard. While the monitor can be fitted with ADP connectors, its display pitch size exceeds the 0.41mm standard cited in the ENs. The monitor also has control buttons on the front for channels and volumes which are typically found on televisions. We further note that the video frequency and horizontal frequency do not indicate a firm conclusion as to whether it is a good of heading 8471 or heading 8528. The expectation of the ultimate purchaser is for use in both the home and office for displaying both ADP and television/video signals.

According to the information presented, the subject merchandise moves in channels of trade in both the audio-visual and computer distributors. The environment of sale and manner in which the merchandise is advertised and displayed as well as the use is that the subject merchandise is displayed, sold and used as a large screen multimedia monitor. All of these factors indicate classification in both headings. Regarding the economic practicality of using the product as an ADP display unit or as a television/video monitor, it is noted that the television quality of the image is the same as that of a normal television while the computer image is not as clear as a regular ADP monitor. Because the subject merchandise can be used for displaying both computer and television images, we find that no principal function can be determined. By application of Legal Note 3 to Section XVI, we must apply the principles of GRI 3(c) and classify the merchandise under the heading which occurs last in numerical order among those which equally merit consideration. Therefore, the subject merchandise is classifiable under heading 8528, as a television video monitor. It is classified under subheading 8528.21.39, as other television video monitors.

NAFTA Eligibility:

To be eligible for tariff preferences under the NAFTA, goods must be "originating goods" within the rules of origin in General Note 12(b), HTSUS. General Notes 12(b)(I) and (ii)(A) state that:

[f]or the purposes of this note, goods imported into the customs territory of the United States are eligible for the tariff treatment and quantitative limitations set forth in the tariff schedule as "goods originating in the territory of a NAFTA party" only if--

(I) they are goods wholly obtained or produced entirely in the territory of Canada, Mexico and/or the United States; or

(ii) they have been transformed in the territory of Canada, Mexico and/or the United States so

(A) except as provided in subdivision (f) of this note, each of the non-originating materials used in the production of such goods undergoes a change in tariff classification described in subdivisions (r), (s) and (t) of this note or the rules set forth therein. . . .

Because the monitor contain parts from countries other than a NAFTA party, General Note 12 (b)(I), HTSUS, does not apply. Therefore, we must apply General Note 12(b)(ii)(A), HTSUS. General Note 12(t)/85.92C, HTSUS, states that:

A change to tariff items 8528.21.34 or 8528.21.39 from tariff items 8528.21.05 or 8528.21.10 or any other heading, except from tariff item 8540.11.10 or more than one of the following:

(A) tariff item 7011.20.10,

(B) tariff item 8540.91.15.

Based upon this rule, any non-originating materials of the monitor must come from any other tariff heading other than subheadings 8540.11.10 (cathode-ray television picture tubes), 7011.20.10 (cones for cathode-ray tubes), or 8540.91.15 (parts of cathode-ray tubes, front panel assemblies), HTSUS. According to the information provided, the cathode ray tube ("CRT") and the front panel assembly will both be manufactured in the United States. The importer has provided a Country of Origin certificate indicating that the CRTs are originating materials in the U.S. Assuming that the CRTs are originating materials, the subject merchandise would be eligible for preferential tariff treatment under the NAFTA.


The 36 inch display monitor is classifiable under subheading 8528.21.39, HTSUS, which provides for: "[r]eception apparatus for television, whether or not incorporating radiobroadcast receivers or sound or video recording or reproducing apparatus; video monitors and video projectors: [v]ideo monitors: [c]olor: Non-high definition, having a single picture tube intended for direct viewing (non-projection type), with a video display diagonal exceeding 35.56 cm: [o]ther. . . . ." The general, column one rate of duty is 5 percent ad valorem.

The 36 inch display monitor is eligible for preferential tariff treatment under the NAFTA.


John Durant, Director
Commercial Rulings Division

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