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NY R03417

March 28, 2006

CLA-2-84:RR:NC:1:120 R03417


TARIFF NO.: 8471.60.8000

Martha Evert
Axalto Incorporated
8311 N. FM 620 Road
Austin, TX 78645

RE: The tariff classification of a set containing smart cards and smart card readers from Singapore

Dear Ms. Evert:

In your letter dated March 9, 2006 you requested a tariff classification ruling.

The item imported is the Swift Initial Pack which includes eight Cyberflex 64K v2 smart cards, four USB v3 smart card readers with attached 59” long cable and USB type A connector, one green light emitting diode (LED), and one page of documentation. The Reflex smart cards are in compliance with ISO 7816 dimension standards measuring 3.37” long by 2.12” wide by .03” deep. The dimensions for the Reflex USB v. 3 readers are 2.755” long by .393” high by 2.755” wide. The cards are used to store data.

The USB v.3 reader has contacts for ISO locations and is useable with any off-the-shelf smart card supporting ISO 7816 Class A and AB smart cards, major smart card protocols (T=0/T=1), frequency up to 12 MHz (PPS, DI parameter) and speeds up to 344 Kbps. The smart cards communicate with a computer through the smartcard standard interface ISO 7816. The reader contains a micro controller, smart card controller STC II, field upgradeable firmware and a single chip with an integrated USB controller. Middleware software is the lower-level interface installed in the computer that allows computer programs to communicate with the smart card. The computer uses downloaded drivers to operate the reader if the drivers are not already embedded in the computer’s windows operating system, which are necessary to communicate with the reader.

An Integrated Circuit (IC) microprocessor is imbedded in the card. The card does not have magnetic or proximity technology. Contact pads on the cards physically contact the contact pads in the readers. The USB connection transmits data to and from the computer and provides power to the readers.

The components of the Swift Initial Pack are packaged and sold as a set put up for retail sale. The eight cards are shrink-wrapped and the four readers are bubble-wrapped. All the items in the set are sealed together in a white box before being shipped directly to the customer. The set is sold in a pre-confined configuration.

The General Rules of Interpretation (GRIs) of the Harmonized Tariff System (HTS) governs the classification of goods put up in sets for retail sale. GRI 3(b) provides, in relevant part, that goods put up for retail sale shall be classified as if they consisted of the material or component, which gives them their essential character. The Explanatory Notes (ENs) of the HTS provide guidance in the interpretation of the Harmonized Commodity Description and Coding System at the international level. According to the ENs for GRI 3(b), "goods put up in sets for retail sale" refers to goods which: consist of at least two different articles which are, prima facie, classifiable in different headings; consist of products or articles put up together to meet a particular need or carry out a specific activity; and are put up in a manner suitable for sale directly to users without repackaging.

When imported packaged for retail sale, the Swift Initial Pack meets the definition of a set. Noting GRI-3 (b), this retail set is classifiable as if it consisted of the material or components that give it its essential character. The smart card readers, by function, use, and value, would exemplify the essential character of this retail set. This set also meets the definition of a "unit" of an ADP system, as per Legal note 5 (B) to Chapter 84 of the HTS.

The applicable subheading for the Swift Initial Pack which includes: eight smart cards, four smart card readers, a cable with a USB type A connector and one green light emitting diode (LED), and one page of documentation will be 8471.60.8000, Harmonized Tariff Schedule of the United States (HTSUS), which provides for Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included: Input or output units, whether or not containing storage units in the same housing: Other: Other: Other: Other: 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 Denise Faingar at 646-733-3010.


Robert B. Swierupski

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