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HQ 957287





August 9, 1995

CLA-2 R:C:M 957287 RFA

CATEGORY: CLASSIFICATION

TARIFF NO.: 8471.91.80

Ms. Lisa Cortes MS 1-42
AST Research Inc.
16215 Alton Parkway
Irvine, CA 92718

RE: Notebook Computers with CPU chip and Non-operational Flash BIOS chip and without keyboard and hard drive; Legal Note 5(A)(a) to Chapter 84; HQs 957524, 957178, 951443, 950762, 950221, 953043

Dear Ms. Cortes:

This is in response to your letter dated October 31, 1994, concerning the tariff classification of notebook computers with CPU chip and non-operational flash BIOS chip and without a keyboard and a hard drive under the Harmonized Tariff Schedule of the United States (HTSUS). In preparing this ruling, we also considered the information provided with your letter of April 7, 1995.

FACTS:

The Ascentia 910 series notebook computer will contain the following components: a flat panel display; floppy disk drive; power supply and the main logic board (motherboard) with the central processing unit (CPU) chip and a non-operational flash BIOS chip. The Ascentia 910 series notebook computer is entered assembled, missing the following components: keyboard, hard drive, and software. After importation, hard drives and keyboards will be installed into the notebook computer. To install the BIOS for the first time, the notebook computer is turned on and the BIOS chip will initialize and check the memory of the notebook computer. At this stage, the end-user will insert a floppy disk into the disk drive and download the current version of the BIOS instructions.

ISSUE:

Whether a notebook computer with CPU chip and non-operational flash BIOS chip and without a keyboard and a hard drive is classifiable as an unfinished ADP machine or as a part of an ADP machine under the HTSUS?

LAW AND ANALYSIS:

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.

To be classified as an ADP machine, merchandise must meet the criteria in Legal Note 5(A)(a) to Chapter 84, HTSUS, which provides as follows:

For purposes of heading 8471, the expression "automatic data processing machines" means:

(a) Digital machines, capable of (1) storing the processing program or programs and at least the data immediately necessary for execution of the program; (2) being freely programmed in accordance with the requirements of the user; (3) performing arithmetical computations specified by the user; and, (4) executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run. . . .

The definitions for the terms "motherboard" and "ROM BIOS" can be found in The Computer Glossary, Sixth Edition. The term "motherboard" is defined as:

Main printed circuit board in an electronic device which contains sockets that accept additional boards. In a personal computer, the motherboard contains the bus, CPU and coprocessor sockets, memory sockets, keyboard controller and supporting chips.

Chips that control the video display, serial and parallel ports, mouse and disk drives may or may not be present on the motherboard. If not, they are independent controllers that are plugged into an expansion slot on the motherboard.

The term "ROM BIOS" is defined as:

Instructions contained in a ROM chip that activate the peripheral devices in a PC. It includes routines for the keyboard, screen, disk, parallel and serial port and for internal services such as time and date. It accepts requests from the device drivers in the operating system as well as from application programs.

It also contains autostart functions that test the system on startup and prepare the computer for operation. It searches for other BIOS's on the plug-in boards and sets up pointers (interrupt vectors) in memory to access BIOS routines. It loads the operating system and passes control to it.

In HQ 957524, dated March 28, 1995, Customs determined the configurations of two notebook ADP machine subassemblies with liquid crystal displays. The first configuration is comprised of the notebook ADP machine without the BIOS ROM chip. The second configuration is comprised of the notebook ADP machine without the ROM BIOS chip, hard drive unit, and floppy drive unit. In that ruling, Customs stated:

In HQ 950762, dated February 20, 1992, a CPU motherboard with an 80286 microprocessor, two 64k EPROMS, and a direct memory access controller was classified as a finished digital processing unit under heading 8471, HTSUS. In the ruling, it was stated that "[t]he subject CPU board satisfies this description [note 5(A)(a), chapter 84, HTSUS] of an ADP machine. The 80286 microprocessor and EPROMS enable the board to perform these functions."

Unlike the motherboard in HQ 950762, the subject subassemblies [in HQ 957524] do not contain the BIOS ROM chip. Therefore they cannot perform the functions described in note 5(A)(a), chapter 84, HTSUS. The lack of the BIOS ROM chip prevents the motherboard within the subassemblies from performing input/output functions with the keyboard. Logic and control functions cannot be performed. Also, the processing program cannot be executed without human intervention.

According to the information provided, the subject merchandise contains a non-operational flash BIOS chip. After the keyboard and hard drive is added, the laptop is capable of receiving the BIOS code via a floppy diskette. Legal Note 5(A)(a) to chapter 84, HTSUS, only requires that the merchandise is "capable" of performing the functions listed. Customs has consistently held that the presence of the hardware and/or firmware was a crucial factor in determining whether or not the terms of Legal Note 5(A)(a) to chapter 84, HTSUS, have been met. See HQ 957524; HQ 957178 (March 28, 1995); HQ 951443 (April 13, 1992); HQ 950762 (February 20, 1992); HQ 950221 (November 22, 1991). We conclude that the subject merchandise satisfies the terms of heading 8471, HTSUS, because it is capable of executing, without human intervention, a processing program which requires them to modify their execution, by logical decision during the processing run.

GRI 2(a) provides that: "[a]ny reference in a heading to an article shall be taken to include a reference to that article incomplete or unfinished, provided that, as presented, the incomplete or unfinished article has the essential character of the complete or finished article." The subject merchandise is an incomplete or unfinished digital processing unit, needing only the keyboard, hard drive, and software. In its condition as imported, the Ascentia 910 notebook computer has the essential character of a complete or finished digital processing unit because it possesses the essential elements required for data processing.

In HQ 953403, dated March 28, 1995, Customs determined that a motherboard missing Stage 2 BIOS (lacking the ability to accept, store and process data) could not be classified as an unfinished or incomplete ADP machine. The basis for this decision was the mistaken belief that the Stage 2 BIOS was firmware (i.e., a programmed chip) and not software. Therefore, we find that the rationale of HQ 953403 is incorrect and is not applicable in this case.

HOLDING:

Under the authority of GRI 2(a), we find that the Ascentia 910 series notebook computer with a non-operational flash BIOS chip is classifiable under subheading 8471.91.80, HTSUS, which provides for: "Automatic data processing machines and units thereof . . . : [o]ther: [d]igital processing machines, whether or not entered with the rest of a system, which may contain in the same housing one or two of the following types of units: storage units, input units, output units: [o]ther. . . . " The general, column one rate of duty is 3.5 percent ad valorem.

Sincerely,

John Durant, Director
Commercial Rulings Division

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