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HQ 952668


December 21, 1992

CLA-2 CO:R:C:M 952668 MBR

CATEGORY: CLASSIFICATION

TARIFF NO.: 8525.10.20; 8518.30.20; 8543.80.90

Mr. Tom Milhon
Director of Administration
NEC America, Inc.
110 Rio Robles
San Jose, CA 95134-1899

RE: Video Teleconferencing Network; VisualLink 5000; Acoustic Echo Canceler models AEC-400, and AEC-700; VoicePoint AEC-40; Transmission Apparatus for Television; Microphone/Speaker Set; Electrical Machines N.S.P.F.

Dear Mr. Milhon:

This is in reply to your letter of May 21, 1992, requesting classification of video teleconferencing network components including the VisualLink 5000, the Acoustic Echo Canceler models AEC-400, and AEC-700, and the VoicePoint AEC-40, under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The imported items are components of a video teleconferencing network. The importations consist of the VisuaLink 5000, the Acoustic Echo Canceler (models AEC-400 and AEC-700), and the VoicePoint AEC-40.

The VisuaLink 5000 is a video codec (coder and decoder) which uses video compression technology to create motion video transmission for closed circuit broadcast applications. This high compression technology allows digital transmission with enhanced video and audio quality within a narrow bandwidth, and enhanced data transmission speed ranging from 56 kb/sec up to 2.048 mb/sec.

The VoicePoint AEC-40 is a table-top speaker unit which incorporates acoustic room echo cancellation technology to provide for voice transmissions without an echo or line feedback. It is designed for connection to a regular phone and phone line extension. Very sensitive microphones are built into the four corners of the VoicePoint. Control functions include "CONF" for
group conference calling, "MIC OFF" to mute the microphones for private discussion, and volume control.

The Acoustic Echo Canceler models AEC-400 and AEC-700 are described as audio systems which may be used in either terrestrial or satellite transmission media. They both incorporate VLSI circuitry which enables the elimination of feedback echo within a room and a transmission echo caused by telephone system hybrid circuits during voice transmission in a teleconference. The AEC- 400 has balanced microphones with a built-in power supply which allows a simultaneous two-way conversation. The AEC-700 has a 10W main power speaker amplifier.

ISSUE:

What is the classification of a video teleconferencing network including the VisualLink 5000, the Acoustic Echo Canceler models AEC-400, and AEC-700, and the VoicePoint AEC-40, under the Harmonized Tariff Schedule of the United States (HTSUS)?

LAW AND ANALYSIS:

The General Rules of Interpretation (GRI's) to the HTSUS 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...

The VisuaLink 5000 is a video codec (coder and decoder) which uses video compression technology to create motion video transmission for closed circuit broadcast applications, and is classifiable pursuant to GRI 1 under subheading 8525.10.20, HTSUS, which provides for: "[t]ransmission apparatus for radiotelephony, radiotelegraphy, radiobroadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras: [t]ransmission apparatus: [t]elevision."

The VoicePoint AEC-40 is a table-top speaker unit which incorporates acoustic room echo cancellation technology to provide for voice transmissions without an echo or line feedback. Very sensitive microphones are built into the four corners of the VoicePoint. It is classifiable pursuant to GRI 1 under subheading 8518.30.20, HTSUS, which provides for: "[m]icrophones....and combined microphone/speaker sets: [h]eadphones, earphones and combined microphone/speaker sets: [o]ther."

The Acoustic Echo Canceler models AEC-400 and AEC-700 eliminate echo and feedback caused by acoustic coupling between microphone and loudspeaker. The AEC-400 has an acoustic echo canceler, an audio amplifier, auxiliary echo control, a
transmission echo canceler, a line interface, and a remote control. The AEC-700 has an acoustic echo canceler, a two wire telephone add-on function, audio cassette interface, microphone and speaker amplifiers, and a remote control. The AEC-400 and AEC-700 are composite machines which are classifiable pursuant to Section XVI, Legal Note 3, regarding composite machines. Legal Note 3 states:

3. Unless 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.

It is Customs position that due to the design, and importance of function, the acoustic echo cancellation is the principal function of both the AEC-400 and the AEC-700. However, there is no specific provision for machines having the function of acoustic echo cancellation. The Harmonized Commodity Description and Coding System Explanatory Notes (ENs), page 1402, state that heading 8543, HTSUS, provides for similar merchandise including, inter alia:

(4) Mixing units, used in sound recording for combining the output from two or more microphones; they are sometimes combined with an amplifier...

(5) Noise reduction units for use with sound recording apparatus.

You argue that since the instant merchandise incorporates an amplifier, they should be classified under the provision for amplifiers. However, we do not find that the amplifiers impart the principal function of this composite machine, and, as stated above in EN (4), the incorporation of an amplifier does not necessarily dictate the classification of a machine.

Therefore, the AEC-400 and AEC-700 are classifiable in subheading 8543.80.90, HTSUS, which provides for: "[e]lectrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter: [o]ther machines and apparatus: [o]ther."

HOLDING:

The VisuaLink 5000 is classifiable under subheading 8525.10.20, HTSUS, which provides for: "[t]ransmission apparatus for radiotelephony, radiotelegraphy, radiobroadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras: [t]ransmission apparatus: [t]elevision." The rate of duty is 3.7% ad valorem.

The VoicePoint AEC-40 is classifiable in subheading 8518.30.20, HTSUS, which provides for: "[m]icrophones....and combined microphone/speaker sets: [h]eadphones, earphones and combined microphone/speaker sets: [o]ther." The rate of duty is 4.9% ad valorem.

The AEC-400 and AEC-700 are classifiable in subheading 8543.80.90, HTSUS, which provides for: "[e]lectrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter: [o]ther machines and apparatus: [o]ther." The rate of duty is 3.9% ad valorem.

Sincerely,

John Durant, Director

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