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HQ 964682




July 15, 2002

CLA-2 RR: CR: GC 964682 TPB

CATEGORY: CLASSIFICATION

TARIFF NO.: 9504.10.00; 8543.89.9695

Lucy Richardson
Trade Strategy and Compliance
Sony Electronics, Inc.
123 Tice Blvd.
Woodcliff Lake, NJ 07675

RE: Sony PlayStation 2; ADP machines; Retail Set; Accessories.

Dear Ms. Richardson:

This is in response to your letter dated October 13, 2000, to the Director, Customs National Commodity Specialist Division, New York, requesting classification of the Sony PlayStation 2 (“PS2”), on behalf of Sony Computer Entertainment of America (“SCEA”), under the Harmonized Tariff Schedule of the United States (“HTSUS”). Your letter was referred to this office for reply. In reaching our conclusion, consideration was given to your additional submissions, as well as the demonstration that you presented to us on August 23, 2001. We sincerely regret the delay in responding.

As we are aware, due to the length of time in issuing this ruling, Sony has begun the importation of the subject merchandise. By copy of this ruling, we are informing the identified ports of our decision as to the classification of the Sony PS2.

FACTS:

The Sony PS2 is an electronic console which utilizes a 128-bit central processing unit (“CPU”) named the Emotion Engine (“EE”) that has a 300 MHz clock speed. The EE is a reduced instruction set computer (“RISC”). Instructions and computations performed by the processor are simpler and fewer than those on a standard computer. The RISC chips are also superscalar, which allow them to perform multiple instructions simultaneously, thus processing instructions much more quickly than computers with higher clock speeds. The EE can perform ~6Gflops (billions of floating-point operations per second) and 150 MV/s (3-D computations measured in Million Vectors/second).

The basic operating system containing the Basic Input Output System (“BIOS”) is incorporated in a read only memory (“ROM”) integrated circuit chip on the main board along with a main memory module consisting of 32 mega-byte dynamic random access memory (“DRAM”). The PS2 includes a “Graphics Synthesizer” graphics chip with 4 Mbyte video random access memory (“VRAM”); digital versatile disk drive (“DVD-ROM”); two memory card slots; two universal serial bus (“USB”) connectors; i.Link connector (IEEE 1394); one drive day; two controller ports; audio video (“AV”) multi-out connector; and a digital-out connector. The USB connectors enable a standard keyboard, mouse, printer, scanner, network-adapters, etc. to be connected to the PS2 and the drive bay allows for a 3.5” hard disk drive and Ethernet adapter. The Ethernet function connectivity permits broadband Internet access via a cable or digital subscriber line (“DSL”) modem.

Accessories packaged together with the PS2 console include a “Dual Shock” 2 analog controller; an AV Multi cable with PlayStation specific connectors that will connect to both the PlayStation and PS2; and a standard AC power cord.

ISSUE:

(I) What is the proper classification of the PS2 console? (II) What is the classification of the PS2 accessories, if imported separately? (III) What is the classification of the Sony PS2 retail set?

LAW AND ANALYSIS:

Classification under the HTSUS is made in accordance with the General Rules of Interpretation (“GRIs”). GRI 1 provides that the classification of goods shall be determined according to the terms of the headings of the tariff schedule and any relative Section or Chapter Notes. In the event that the goods cannot be classified solely on the basis of GRI 1, and if the headings and legal notes do not otherwise require, the remaining GRIs may then be applied.

The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the Harmonized System at the international level. While neither legally binding nor dispositive, the ENs provide a commentary on the scope of each heading of the HTSUS and are generally indicative of the proper interpretation of these headings. See T.D. 89-80.

The HTSUS provisions under consideration are as follows:

8471 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:

Articles for arcade, table or parlor games, including pinball machines, bagatelle, billiards and special tables for casino games; automatic bowling alley equipment; parts and accessories thereof: 8519 Turntables, record players, cassette players and other sound reproducing apparatus, not incorporating a sound recorder:

8521 Video recording or reproducing apparatus, whether or not incorporating a video game tuner:

8543 Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof:

(I) What is the proper classification of the PS2 console?

Classification of merchandise is based upon their condition as imported. See U.S. v. Citroen, 223 U.S. 407 (1912). You claim that the Sony PS2, in its condition as imported, is properly classified as an automatic data processing (“ADP) machine in heading 8471, HTSUS.

ADP machines, for tariff purposes, are defined in Note 5(A) to Chapter 84, HTSUS, which reads, in pertinent part:

5. (A) For purposes of heading 8471, the expression “automatic data processing machines” means:

(a) Digital machines capable of (1) storing the processing 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;

In its condition as imported, the Sony PS2 contains a main memory module consisting of 32 mega-byte DRAM. This stores the processing program (BIOS+) in its MASK ROM. Thus, the memory module stores the data immediately necessary for the execution of the program in a non-volatile RAM. (Note 5(A)(a)(1)). The PS2 is also capable of executing, without human intervention processing programs which require them to modify their execution by logical decision during the processing run. (Note 5(A)(a)(4)). However, it has not been demonstrated that the PS2 is capable of being freely programmed in accordance with the requirements of the user (Note 5(A)(a)(2)) or performing arithmetical computations specified by the user (Note 5(A)(a)(3)) in its imported condition.

Your demonstration on August 23, 2001, showed that when loaded with an optional Linux kit, which included a Sony version of the Linux operating system (“OS”), the PS2 could be capable of performing all of the requirements of Note 5(A)(a) to chapter 84. The presence of the Sony Linux disc in the PS2 was a necessary step in order for the user to be able to write original programs. Proprietary blocks in the PS2 prevent the console from running any commercially available Linux OS and only specially designed Sony discs can be read by the system. If a non-PS2 compatible disc is inserted into the console, the hardware-layer (with the firmware) determines that the disc does not contain one of the accepted formats and thus does not acknowledge it as accepted media. Once the optional Sony Linux OS is booted through the DVD-ROM drive, all types of Linux-based programs can be executed on the PS2. These programs can be read either from an external hard disc drive or the Internet connected to the PS2. For further discussion on Note 5(A)(a), see HQ 964880, dated December 21, 2001. Therefore, because the PS2 does not meet all four criteria of Note 5(A)(a) to chapter 84, HTSUS, it cannot be considered an ADP machine for tariff purposes and classification under heading 8471 is precluded.

Heading 9504 provides for articles for arcade, table or parlor games, including pinball machines, bagatelle, billiards and special tables for casino games; automatic bowling alley equipment; parts and accessories thereof. Subheading 9504.10 provides for video games of a kind used with a television receiver and parts and accessories thereof. The PS2 has a library of hundreds of licensed games available to the purchaser, which can be immediately played on the PS2 with the included Dual Shock controller and wiring connections. The PS2 is also advertised as a video game console by a wide variety of retailers. Clearly, the PS2 video console is of a kind that is classifiable under subheading 9504.10, HTSUS.

In its imported condition, the Sony PS2 is a complete and fully functional video game machine of the type that works in conjunction with a television receiver. The PS2 is shipped along with a “Dual Shock” 2 analog controller; an AV Multi cable with PlayStation specific connectors and a standard AC power cord. All of these accessories work in conjunction to facilitate gameplay on a television receiver.

In addition to its ability to play games, the PS2 is also capable of playing digital versatile disc (“DVD”) movies and audio compact discs (“CDs”), with the Dual Shock 2 controller directing functions such as fast-forward and track select. DVD playing machines are classified under heading 8521, HTSUS, as video reproducing apparatus without a video tuner and CD players are classified under heading 8519, HTSUS, as other sound reproducing apparatus, not incorporating a sound recording device. Because its functions make the PS2 classifiable in three possible headings, we consult GRI 3, which reads, in pertinent part:

When, by application of rule 2(b) or for any other reason, goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows:

(a) The heading which provides the most specific description shall be preferred to the headings providing a more general description.

EN (IV) to GRI 3(a) states, in pertinent part:

It is not practicable to lay down hard and fast rules by which to determine whether one heading more specifically describes the goods than another, but in general it may be said that:

If the goods answer to a description which more clearly identifies them, that description is more specific than one where the identification is less complete.

As you had also indicated in our meeting of August 23, 2001, the PS2s ability to play DVD movies and audio CDs stem from the same hardware and software that allow the PS2 to play video games. The PS2 is commercially known as a video game console. We therefore view these other capabilities as ancillary to the PS2’s game-playing capabilities. Therefore, by application of GRI 3(a), the PS2 is classifiable under heading 9504, HTSUS, which provides the most specific and complete description of the merchandise, i.e. an article for arcade games.

What is the classification of the PS2 accessories, if imported separately?

In addition to the console, the PS2 is shipped with a “Dual Shock” 2 analog controller, an AV multi cable with PlayStation specific connectors that will connect to both the original PlayStation and PS2 and a standard AC power cord. As determined above, the PS2 console itself is classified under heading 9504, HTSUS. Classification of parts and accessories of articles of chapter 95 are controlled by Note 3 to that chapter, which states that: “[s]ubject to Note 1 above, parts and accessories which are suitable for use solely or principally with articles of this chapter are to be classified with those articles.” As all of these accessories are designed specifically for use with the PlayStation or PS2, they are all classifiable under subheading 9504.10, HTSUS, as accessories of video games of a kind used with a television receiver, if they are separately imported.

You also requested the classification of the following accessories, which will be imported separately:

A plastic vertical stand designed specifically for the PS2; A plastic horizontal stand designed specifically for the PS2; An S-video cable with dedicated connectors that can be used with the original PlayStation and PS2; A standard Radio Frequency Unit (“RFU”) adapter; A multitap connector designed for use only with the PS2.

With the exception of the RFU adapter, all of the above accessories that are designed for exclusive use with the PS2 are classifiable under subheading 9504.10, HTSUS, which provides for parts and accessories of video games of a kind used with a television receiver.

The RFU adapter is classifiable under subheading 8543.89.9695, HTSUS, which provides for electrical machines and apparatus, having individual functions, not specified elsewhere in this chapter, other machines and apparatus, other, other, other, other.

What is the classification of the Sonly PS2 retail set?

In its condition as imported, the Sony PS2 is shipped in a set which includes the PS2 console, a “Dual Shock” 2 controller, an AV multi cable and a standard AC power cord. The classification of goods put up in sets for retail sale is governed by GRI 3(b). 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. 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 repacking.

However, as indicated in section (II) above, the accessories packaged with the PS2 are not, prima facie, classifiable in different headings. The controller, AV multi cable and AC power cord are designed exclusively for use with either the PlayStation or PS2 and are all, therefore classifiable under subheading 9504.10, HTSUS, by virtue of Note 3 to chapter 95. Therefore, GRI 3(b) is not applicable here. The entire PS2 retail set is therefore classifiable at GRI 6 GRI 6 provides that:

For legal purposes, the classification of goods in the subheadings of a heading shall be determined according to the terms of those subheadings and any related subheading notes and, mutatis mutandis, to the above rules, on the understanding that only subheadings at the same level are comparable. For the purposes of this rule, the relative section, chapter and subchapter notes also apply, unless context otherwise requires. under subheading 9504.10, HTSUS, which provides for video games of a kind used with a television receiver and parts and accessories thereof, as that is the only applicable heading.

HOLDING:

For the reasons stated above, Sony PS2 is to be classified under subheading 9504.10.00, HTSUS, as: Articles for arcade, table or parlor games, including pinball machines, bagatelle, billiards and special tables for casino games; automatic bowling alley equipment; parts and accessories thereof: video games of a kind used with a television receiver and parts and accessories thereof.

The analog controller, AV multi cable and AC power cord that are shipped with the PS2 console are also classifiable under subheading 9504.10, HTSUS, as articles for arcade, table or parlor games, including pinball machines, bagatelle, billiards and special tables for casino games; automatic bowling alley equipment; parts and accessories thereof: video games of a kind used with a television receiver and parts and accessories thereof.

The plastic horizontal and vertical stands designed for the PS2, the S-video cable with dedicated connectors and the multitap connector designed for the PS2 are classifiable under subheading 9504.10, HTSUS, as articles for arcade, table or parlor games, including pinball machines, bagatelle, billiards and special tables for casino games; automatic bowling alley equipment; parts and accessories thereof: video games of a kind used with a television receiver and parts and accessories thereof.

The RFU adapter is classifiable under subheading 8543.89.9695, HTSUS, which provides for electrical machines and apparatus, having individual functions, not specified elsewhere in this chapter, other machines and apparatus, other, other, other, other.

Sincerely,

Myles B. Harmon, Acting Director

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