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HQ W968259




August 29, 2006

CLA-02 RR:CTF:TCM W968259 RSD

CATEGORY: CLASSIFICATION

TARIFF NO. 8543.89.9695

Douglas Turnbull
Corporate Import/Export Manager
Hitachi America, Ltd.
50 Prospect Avenue
Tarrytown, New York 10591

RE: Tariff Classification of a Finger Vein Demo Kit Door Unit

Dear Mr. Turnbull:

This letter is in response to your eruling request submitted on May 9, 2006, concerning the tariff classification of a finger vein demo kit door unit under the Harmonized Tariff Schedule of the United States (HTSUS). Accompanying your request were pictures and general information regarding the product.

FACTS:

The imported product under consideration is a finger vein demo kit door unit. It is a biometric door access control system demo kit designed to demonstrate the technology of Biometrics in security systems. This system consists of a biometric finger vein scanner, a ten-key keypad, ACPU, and a controller that are all housed within a metal travel case. The CPU is a printed circuit assembly (PCA) that consists of a microprocessor with a fixed operating system, flash memory, a power supply and a digital converter. As imported, the finger vein demo kit door unit has a fixed program with blocks that prevent the user from programming, adding, modifying, or changing the functions of the unit in accordance with the requirements of the user.

The unit contains a finger vein biometric reader that scans and verifies a person’s finger vein pattern before granting access rights. The biometric finger vein scanner (Optical Reader) scans an individual’s finger when it is inserted into the slot of the scanner. Infrared LEDs light-up the finger and a CCD (charged coupe device) camera takes a picture (scan) of the illuminated finger. The pattern is then compressed and digitized so that it can be registered as a template of a person’s biometric authentication data. The device was developed to perform the above-described detection process. The digitized data is transmitted to the CPU. A person’s access rights are determined by a software function.

In addition to the finger vein scanner, to get access to an area, a person must input a PIN (Personal Identification Number) using the buttons of a keypad (input unit). This data is transmitted to the CPU. The CPU stores matched sets of the finger vein images and the PINS of specific individuals. When a transmission is received from the scanner, the CPU compares the current image with stored images. If the current image cannot be identified, the processing stops. If the current image is identified, the CPU awaits receipt of a transmission of data that corresponds to the stored PIN matched with the image in its set. If data representing an unidentified or unmatched PIN is received, the processing will stop. If data representing a match PIN number is received and identified, the CPU sends a signal to the controller to unlock an automatic door lock.

The controller keeps the door latch extended (locked) when the door is shut, and it retracts the latch when it receives an appropriate signal from the CPU.

ISSUE:

Whether the Finger Vein Demo Kit Door Unit is classified in heading 8471, HTSUS, as: Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded and machines or in heading 8543, HTSUS, as: Electrical machines and apparatus, having individual functions not specified or included elsewhere in this chapter.

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 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:

8471.90.00 Other.

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

Other:

8543.89.96 Other.

When interpreting and implementing the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, while neither legally binding nor dispositive, provide a guiding commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. CBP believes the ENs should always be consulted. See, T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

The first of the alternative headings, 8471, HTSUS provides for Automatic data processing machines and units thereof; magnetic or optical readers machines for transcribing data onto data media in coded form structures and machines for processing such data. To be classified as an “ADP machine” under heading 8471, HTSUS, the merchandise must meet the requirements of Legal Note 5(A)(a) to Chapter 84, HTSUS, which provides that: Digital machines, must be 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.

Additionally, Legal Note 5(E) to Chapter 84, HTSUS, provides that: “[m]achines performing a specific function other than data processing and incorporating or working in conjunction with an automatic data processing machine are to be classified in headings appropriate to their respective functions or falling that, in residual headings.”

Therefore, for a computer or computer system to be classified in heading 8471, HTSUS, it must meet the terms of Legal Note 5(A)(a)(2) to Chapter 84 in that it must be freely programmable in accordance with the requirements of the user. As imported, this system is designed to perform a specific function and it has blocs that prevent the user from installing additional software. Therefore, for tariff purposes, the Finger Vein Demo Kit Door unit is not classifiable as a data processing machine that would be classified in heading 8471, HTSUS.

However, heading 8471, HTSUS, also includes magnetic and optical readers. Accordingly, we must consider whether the Finger Vein Demo Kit Door Unit can be considered as an optical reader. For an explanation of the meaning of the term optical reader, we have reviewed relevant sections of the Explanatory Notes. EN 84.71 indicates:

Magnetic or optical readers read characters, generally in a special form and convert them into electric signals (impulses) which can be directly used by machines for transcribing or processing coded information.

Magnetic readers. In this type of appliance, the characters printed with a special “magnetic” ink, are magnetized and then converted into electric impulses by a magnetic reader head. They are subsequently identified either by comparison with data registered in the storage units of the machine or by means of numeric code, usually binary.

Optical readers. These do not require the use of special ink. The characters are read directly by a series of photoelectric cells and translated on the binary code principle. This group also includes bar code readers. These machines generally use photosensitive semiconductor devices, e.g. laser diodes, and are used as input units in conjunction with an automatic data processing machine, or with other machines, e.g., cash registers. They are designed for working in the hand, for placing on a table or for fixing to a machine.

The readers described above are classified in this heading only if presented separately. When combined with other machines (e.g., machines for transcribing data onto data media in coded form and machines for processing such data in coded form) they are classified with those machines provided they are presented with them.

Although the unit does have an optical reader that reads finger vein patterns, the reader is only one part of a larger system that is used for controlling access to a physical area by locking and unlocking doors. Since the reader is combined with other components to form the device, EN 84.71 instructs that the Finger Vein Demo Kit Door Unit is not classifiable as a reader in heading 8471, HTSUS.

The alternative proposed tariff provision for classifying the subject product is heading 8543, HTSUS. Heading 8543, HTSUS, provides for electrical machines and apparatus, having individual functions, not specified or included elsewhere in Chapter 85. Explanatory Note 85.43 provides that "this heading covers all electrical appliances and apparatus, not falling in any other heading of the Chapter, nor covered more specifically by a heading of any other Chapter of this Nomenclature, nor excluded by the operation of a Legal Note to Section XVI or to this Chapter."

Because the Finger Vein Demo Kit Door Unit is a machine that is operated by electricity, it is prima facie classifiable in heading 8543, HTSUS. However, EN 85.43 indicates that this proposed classification is a "basket" provision, in that, merchandise may only be classified in this heading if not more specifically covered by any other tariff heading.

In NY K82918 dated March 4, 2004, CBP considered the classification of a device known as the “Biometric Authentication Unit”, which stored a template of an individual fingerprints for future use in allowing access to a particular restricted area or for monitoring the movement of individuals within a certain area. The unit consisted of an optical reading device that verified stored fingerprint information, and a keypad for inputting an assigned code. CBP classified the unit in heading 8543, HTSUS. Based on the description of the product in the ruling, the device described in NY K2918 appears to be very similar to the unit that is under consideration in this case. The Finger Vein Demo Kit Door Unit is an integrated device. The optical reader is just one component in a device that is used for controlling access to a restricted area by locking and unlocking doors. Since the optical reader is combined with other components to make an access control device, in accordance to EN 84.71, we believe that classification of the optical reader must be subordinated to the classification of the total unit. Thus, the Finger Vein Demo Kit Door Unit system cannot be classified based on the optical reader in heading 8471, HTSUS. Since classification of the Finger Vein Demo Kit Door Unit in heading 8471, HTSUS, is precluded, we instead, find consistent with NY K82918, that it is most appropriately classified in heading 8543, HTSUS, as an electrical machine and apparatus having individual function not specified or included elsewhere.

HOLDING:

Under the GRI 1, the Finger Vein Demo Kit Door Unit is classified in heading 8543, HTSUS. It is specifically provided for in subheading 8543.89.9695, HTSUS as Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter, parts thereof: Other: Other, The applicable column one, general duty rate under the 2006 HTSUSA is 2.6 percent ad valorem.

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 the World Wide Web at www.usitc.gov.

Sincerely,

Gail A. Hamill, Chief

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