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NY M86830

September 27, 2006

CLA-2-98: RR: NC: 1:108 M86830


TARIFF NO.: 9803.00.50, 8525.20.9080

Mr. Robert Shapiro
Thompson Coburn LLP
1909 K Street, N.W.
Suite 600
Washington, D.C. 20006-1167

RE: The tariff classification of an Instrument of International Traffic from Germany.

Dear Mr. Shapiro:

In your letter dated September 15, 2006, on behalf of IBM, you requested a tariff classification ruling.

The issue concerns the applicability of Statistical Note 2 to Chapter 98, HTSUS requiring an alternative classification for a Tamper Resistant Embedded Controller (TREC) imported as an Instrument of International Traffic.

Headquarters Ruling 116684, dated August 17, 2006 clearly established this item to be an Instrument of International Traffic when so intended. Based upon this designation Statistical Note 1 to chapter 98 is the applicable note. Statistical Note 1 does not require an alternative classification when such an item is imported as an intended Instrument of International Traffic.

Based upon our telephone conversation of September 25, 2006 you requested that a classification ruling be issued in the event the item is not intended as an Instrument of International Traffic at the time of entry.

The TREC is a device that uses various RF protocols to track the movement of a container or other possible products. In its standard configuration it uses a combination of electro-mechanical switches, GPS and electronic sensors to monitor location, motion, open doors, acceleration, ambient light, temperature and the presence of certain chemicals.

GRI 2b states that if a product is a mixture or combination of materials or substance that are, prima facie, classifiable in tow or more headings, then GRI 3 applies. This office is of the opinion that the TREC device is a composite good because it performs multiple functions. It will therefore be classified in accordance with GRI 3.

GRI 3 provides that mixtures, composite goods consisting of different materials or made up of different components, shall be classified as if they consisted of the material component, which gives them their essential character.

Based upon the functionality of the TREC it is the opinion of this office that the essential character is that of its RF data transmission for the purpose of tracking the location of an appropriate item by various RF protocols including GPS.

The applicable subheading for the TREC, when imported as an IIT, will be 9803.00.50, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Substantial containers and holders, if products of the United States (including shooks and staves of United States production when returned as boxes or barrels containing merchandise), or if of foreign production and previously imported and duty (if any) thereon paid, or if of a class specified by the Secretary of the Treasury as instruments of international traffic, repair components for containers of foreign production which are instruments of international traffic, and accessories and equipment for such containers, whether the accessories and equipment are imported with a container to be reexported separately or with another container, or imported separately to be reexported with a container. The rate of duty will be free.

The applicable subheading for the TREC when imported as a non-intended IIT will be 8525.20.9080, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Transmission apparatus for radiotelephony, radiotelegraphy, radiobroadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras and other video camera recorders; digital cameras: Transmission apparatus incorporating reception apparatus: Other Other. The rate of duty will be free.

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 World Wide Web at http://www.usitc.gov/tata/hts/.

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 Michael Contino at 646-733-3014.


Robert B. Swierupski

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