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HQ 956169




April 29, 1994

CLA-2 CO:R:C:M 956169 MBR

CATEGORY: CLASSIFICATION

TARIFF NO.: 8525.10.80; 8525.20.60; 8529.90.23

Mr. Joseph Prohm
Export/Import Coordinator
Honeywell Inc.
P.O. Box 29000
Phoenix, Arizona 85038-9000

RE: SATCOM; Racal "Satfone" System; Radio Transmission Apparatus; Satellite Telephonic System; Satellite Data Unit; Radio Frequency Unit; NY 857982

Dear Mr. Prohm:

This is in reply to your letter of February 7, 1994, to the Area Director of Customs, New York Seaport, requesting classification of the Racal "Satfone" System, under the Harmonized Tariff Schedule of the United States (HTSUS). Your letter was forwarded to this office for reply.

FACTS:

SATCOM is an aeronautical satellite communications multi- channel system that provides the aircraft with simultaneous, independant communications. It has been certified by the F.A.A. for use on civil aircraft. It allows passengers to make or receive telephone calls, including fax messages. For ground-to-air contact, the voice, fax modem or packet data is sent over traditional phone lines to a Ground Earth Station ("GES"). The GES then transmits the digitized information to the International Maritime Satellite ("INMARSAT"), which covers the region in which the aircraft is flying. For air-to-ground communication, the process is simply reversed.

The Racal Avionics "Satfone" System is the Aircraft Earth Station ("AES") radio transmission and reception system which is mounted in the aircraft. The "Satfone" system provides a digital link (9600 bits per second) between the AES and an INMARSAT via radio waves. The "Satfone" system is comprised of several components described below.

The Satellite Data Unit ("SDU") provides interface functions, command, control and coordination of the system. The SDU also maintains a table of frequencies for each ocean
region, controls system log-on procedures, monitors timing sequences, formats inputs and outputs, and receives position input from the aircraft's navigation system in order to provide the antenna with directional steering coordinates.

The Radio Frequency Unit ("RFU") converts radio frequency inputs from the SDU to frequencies needed by the High Power Amplifier for transmission. You state that the RFU is the system's transmitter/receiver. The RFU transmits at 1626.5 to 1660.5 MHz and receives at 1530 to 1559 MHz radio frequencies.

ISSUE:

What is the classification of the Racal Avionics "Satfone" System, imported as a system and imported in separate components, 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...

Classification of Goods Under General Rule of Interpretation 1 of the Harmonized System, T.D. 89-80, 54 Fed. Reg. 35127, 35128 (Aug. 23, 1989) states, in pertinent part, that classification under GRI 1 proceeds as follows:

(1) If the nature or make-up of the goods reveals a function (a specific intended use), then the proper function-related chapter must be examined. First, it must be determined that the function of the article is indeed included in the chapter. Next, the section and chapter notes must be consulted to ensure that classification of the article is not ruled out by a legal note....Consideration must also be given to the possibility that more than one function related chapter may apply.

The nature and make-up of the Satfone system reveals the function to be digital radio transmission and reception.

Specifically, the function is that of transmission apparatus for radio-telegraphy, i.e., "for the transmission of signals (representing speech, messages or still pictures) by means of electro-magnetic waves which are transmitted through the ether without any line connection." Harmonized Commodity Description and Coding System Explanatory Notes (EN), page 1374.

Thus, the Satfone system is prima facie classifiable under the function-related heading of 8525, HTSUS, which provides for:

8525 Transmission apparatus for radiotelephony, radiotelegraphy, radiobroadcasting or television, whether or not incorporating reception apparatus...:

8525.20.60 Transmission apparatus incorporating reception apparatus: [o]ther: [o]ther.

Section XVI, Legal Note 4, provides guidance here: "where a machine (including a combination of machines) consists of individual components (whether separate or interconnected by piping, by transmission devices, by electric cables or by other devices) intended to contribute together to a clearly defined function covered by one of the headings in chapter 84 or chapter 85, then the whole falls to be classified in the heading appropriate to that function."

The Satfone system components are principally intended to contribute to the clearly defined function of transmission apparatus incorporating reception apparatus in chapter 85, and therefore must be classified in this chapter. Therefore, the system, imported together, is classifiable in subheading 8525.20.60, HTSUS, which provides for other transmission apparatus incorporating reception apparatus. See NY 857982, dated November 30, 1990, for a similar holding.

The SDU provides interface functions, command, control and coordination of the system, maintains a table of frequencies for each ocean region, controls system log-on procedures, monitors timing sequences, formats inputs and outputs, and receives position input from the aircraft's navigation system in order to provide the antenna with directional steering coordinates. However, the SDU does not incorporate reception apparatus. Therefore, separately imported, the SDU is classifiable as other transmission apparatus in subheading 8525.10.80, HTSUS.

The RFU, imported with all four modules (main processor, channel filter, radio output and transcoder), is transmission apparatus incorporating reception apparatus, and as such is classifiable in subheading 8525.20.60, HTSUS, which provides for: "[t]ransmission apparatus for radiotelephony, radiotelegraphy, radiobroadcasting or television, whether or not incorporating reception apparatus...: [t]ransmission apparatus incorporating reception apparatus: [o]ther: [o]ther."

However, the RFU modules, imported individually do not impart the essential character of the finished RFU, as required by GRI 2(a). Therefore, the individual RFU modules are classifiable in subheading 8529.90.23, HTSUS, which provides for: "[p]arts suitable for use solely or principally with the apparatus of headings 8525 to 8528: [o]ther: [p]rinted circuit assemblies: [o]ther."

HOLDING:

The components of the Racal Avionics Satfone System, imported together, are classifiable in subheading 8525.20.60, HTSUS, which provides for: "[t]ransmission apparatus for radiotelephony, radiotelegraphy...whether or not incorporating reception apparatus...:

[t]ransmission apparatus incorporating reception apparatus: [o]ther: [o]ther." The rate of duty is 6% ad valorem.

The Satellite Data Unit, separately imported, is classifiable as other transmission apparatus in subheading 8525.10.80, HTSUS. The rate of duty is 6% ad valorem.

The Radio Frequency Unit, imported with all four of its constituent modules, is transmission apparatus incorporating reception apparatus classifiable in subheading 8525.20.60, HTSUS, which provides for: "[t]ransmission apparatus for radiotelephony, radiotelegraphy, radiobroadcasting or television, whether or not incorporating reception apparatus...: [t]ransmission apparatus incorporating reception apparatus: [o]ther: [o]ther." The rate of duty is 6% ad valorem.

The Radio Frequency Modules, imported individually, are classifiable in subheading 8529.90.23, HTSUS, which provides for: "[p]arts suitable for use solely or principally with the apparatus of headings 8525 to 8528: [o]ther: [p]rinted circuit assemblies: [o]ther." The rate of duty is 5.9% ad valorem.

Sincerely,

John Durant, Director

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