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NY F81576

February 2, 2000

CLA-2-90:RR:NC:MM:105 F81576


TARIFF NO.: 9031.80.8085

Mr. Kevin Hussey
Schenker, Inc.
850 Calcon Hook Rd.
Sharon Hill, PA 19079

RE: The tariff classification of Modic III - Mobile Diagnostics Computer from Germany

Dear Mr. Hussey:

In your letters, dated December 6, 1999 and January 4, 2000, for BMW of North America, you requested a tariff classification ruling. No sample, but about 2 dozen pages of documentation, was provided.

The Modic III consists of the main device plus a Diagnostic Gateway and a Docking Station. You indicate that they will be imported together to be sent exclusively to BMW dealerships. Imported together they form a “functional unit”. (See Note 4 to HTS Section 16 and Note 3 to HTS Chapter 90.)

The Modic III Diagnostic Computer has a Pentium Processor with 64 Megabytes of RAM, a 3 Gigabyte Hard Drive, a high-resolution touchscreen LCD display, and a CD-ROM drive. It is imported with its UNIX operating software, we assume on CD-ROM disks, but the software for its specific uses is imported separately.

New CD-ROMs will be supplied to the dealerships on a regular basis as new models and accessories are added to the BMW line. The dealership will download them into the Hard Drive via the CD-ROM Drive. These CD-ROMs will primarily contain the electronic equivalent to the contents of the most current paper Technical Manuals for BMW autos and the logical instructions necessary to compare the input information from the auto to the norms established by BMW for that parameter in the given circumstances. A decision that the parameter is out of normal range will result in notification of that fact to the user via the display and may include suggestions for adjustments to be made to the auto. This is thus analogous to a Spell-Check function in a Word Processing program, which compares the words in an input text to an electronic dictionary on the computer’s hard drive and notifies the user of an “error” and its possible corrections.

The inputs will all be via wires connected to the auto. There is a digital cable link via a port on the auto to enable the many microcomputers in the auto to report both current and historical data which it has collected. There are also two cables which can be attached to exposed wires in the auto via alligator clips and which carry non-digital electrical currents to the Modic. The non-digital inputs can be analyzed by an oscilloscope, counter, and electrical multimeter built into the Modic. The results of that analysis can apparently be digitized and then supplied to the digital computer as additional information in its “deciding” which actions to recommend to the operator.

The data reported by the auto’s microcomputers is not of use only in diagnosing faults, if any, in the auto’s performance or settings. For example, the Modic would be used to get information for litigants about the speedometer and other settings at the time that an airbag deployed and to provide evidence to law enforcement whether any of the microcomputers were replaced or tampered with. However, it is clear that the most common use of the Modic would be diagnosing faults utilizing the parameter checking function.

The other main function of the Modic is to store and transmit new instructions to the auto’s microcomputers via its digital outputs. If an event corrupts the microcomputer’s memory but does not damage it physically, the Modic can transmit instructions to “repair” the device without physically replacing it.

Although many of the Modic’s most prominent sub-components are used in computers, it is not classified in HTS heading 8471 as an Automatic Data Processing Machine.

NIS E. Kaplan, assigned 8471 notes:
As indicated in your letter, the Modic III is dedicated by its design for diagnostic and programming functions of the various electronic systems found in BMW vehicles and is not programmable for other functions. Therefore, it is precluded from heading 8471 as an automatic data processing machine in that it is not freely programmable in accordance with Note 5 (A)(a)(2) of chapter 84, HTSUS. While its programming function may be seen to fall under the second product group of heading 8471, "magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data," this function is not the principal function of this system nor does the components of this system contribute together to a clearly defined function covered by heading 8471 (Section XVI, Note 4).

Although the “repair” function is clearly not covered by HTS heading 9031, the other main function of the Modic does assist mechanics in testing and checking automobiles to determine what, if any, repairs are needed on an individual auto. Some sub-components, such as the oscilloscope and the multimeter are really of use only when performing that task. Explanatory Note I-4 to Harmonized System Heading 9031 states that it includes “Apparatus for testing and regulating vehicle motors, for checking all parts of the ignition system...,for ascertaining the best carburetor setting..., or for measuring the compression in the cylinders.” This import is quite different from the items described, replaces some items that were never classified in 9031 such as technical manuals, and has relatively little measuring instrumentation (since most of the measuring is done within the auto, e.g, by an oxygen sensor, and the results are stored in its microcomputers). However, it is in the same general area.

Harmonized System General Rule of Interpretation 3-c indicates that composite articles in which no one heading’s components supply its essential character are to be classified “under the heading which occurs last in numerical order among those which equally merit consideration”.

We thus agree that the applicable subheading for this item will be 9031.80.8085, Harmonized Tariff Schedule of the United States (HTS), which provides for “other”, non-“optical” measuring or checking instruments. The general rate of duty will be 1.7 percent ad valorem.

Note that the UNIX software will be separately classifiable due to Note 6 to Chapter 85 of the HTS, and its value for Customs purposes will be only the value of the medium, not the value of the content. NYRL B86452, 6-19-97, noted.

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 exclusion from HTS 8471, contact National Import Specialist Eileen Kaplan at 212-637-7019. If you have any other questions regarding the ruling, contact National Import Specialist James Sheridan at 212-637-7037.


Robert B. Swierupski
National Commodity

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