HQ H014781

March 19, 2008

CLA-2: OT:RR:CTF:TCM H014781 KSH

CATEGORY: Classification

TARIFF NO.: 8527.90.95

Port Director

U.S. Customs and Border Protection

Attn: Entry Unit

9901 Pacific Highway

Blaine, WA  98230

RE: Application for Further Review of Protest 3004-07-100164; e-Link
receiver

Dear Port Director:\
\
This is in reply to your correspondence forwarding Application for
Further Review of Protest (AFR) 3004-07-100164, filed by Strader-Ferris
international, on behalf of its client Verichip, Corp. The protest is
against Customs and Border Protection's (CBP) classification and
liquidation of eighteen entries of e-Link receivers under the Harmonized
Tariff Schedule of the United States (HTSUS).

Between February 2, 2006 and June 2, 2006, protestant entered the
subject merchandise in subheading 8527.90.5000, HTSUS, which provides
for "Reception apparatus for radiotelephony, radiotelegraphy or
radiobroadcasting, whether or not combined, in the same housing, with
sound recording or reproducing apparatus or a clock: Other apparatus:
Other: Infant nursery monitor systems, each consisting in the same
package of a radio transmitter, an electrical adapter, and a radio
receiver." On May 2, 2006, CBP issued a Request for Information to
obtain information concerning how the receivers operate. On January 23,
2006, protestant responded to the Request for Information. On December
15, 2006, the merchandise was rate advanced and reclassified in
subheading 8527.90.9590, HTSUS, which provides for "Reception apparatus
for radiotelephony, radiotelegraphy or radiobroadcasting, whether or not
combined, in the same housing, with sound recording or reproducing
apparatus or a clock: Other apparatus: Other: Other: Other, Other." The
entries were liquidated on January 5, 2007.

On June 22, 2007, protestant filed a protest and application for further
review against the classification and liquidation of the merchandise in
subheading 8527.90.9590, HTSUS. Protestant's AFR request was approved.
The protest was timely filed pursuant to 19 U.S.C. 1514(c)(3).

In support of protestant's application for further review, protestant
alleges that the protest is inconsistent with court decisions and New
York Ruling Letter (NY) M82159, dated April 8, 2006. See 19 C.F.R.
174.24(a) and (b). Further review is warranted pursuant to 19 C.F.R.
§§174.24(a) and 174.25.

FACTS:

The merchandise at issue is an e-Link receiver which is a component of
an infant protection system. It receives radio frequency signals from
deployed infant transponder tags (monitors) and passes this information
via Ethernet cable connection to a PC server running proprietary
software. It can detect tag messages within a 20 foot radius.
Information passed from the receiver is used by the proprietary software
to make decisions such as sounding an alarm, lock or unlock a door,
presenting information on screen regarding the position of a particular
tag on a floor plan. The receivers are placed at specific points
throughout a facility to ensure communications from tags are received
through the area of concern. The complete infant protection system can
be used in various types of settings including adult and infant
monitoring.

ISSUE:\
\
Whether the e-Link receiver is classified in heading 8517, HTSUS, as
other telegraphic apparatus or in heading 8527, HTSUS, as other
reception apparatus.

LAW AND ANALYSIS:\
\
Classification of goods under the HTSUS is governed by the General Rules
of Interpretation (GRI). GRI 1 provides that classification 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 GRI may then be
applied.

The Harmonized Commodity Description and Coding System Explanatory Notes
(EN), constitute the official interpretation of the Harmonized System at
the international level. While neither legally binding nor dispositive,
the EN provide a commentary on the scope of each heading of the HTSUSA
and are generally indicative of the proper interpretation of the
headings. It is Customs and Border Protection's (CBP) practice to
follow, whenever possible, the terms of the ENs when interpreting the
HTSUSA. See T.D. 89-80, 54 Fed. Reg. 35127, 35128 (August 23, 1989).

In support of the application for further review, protestant argues that
the e-Link receiver is akin to networking apparatus as its primary
function is to provide a network link between wireless transceivers at
one end of the network and a personal computer on the other end of the
network. In support of this claim, protestant cites to NY M82159, which
classified a Wireless IP Access System in subheading 8517.50.9000,
HTSUS.

Subheading 8517.50.9000, HTSUS, provides for: "Electrical apparatus for
line telephony or line telegraphy, including line telephone sets with
cordless handsets and telecommunication apparatus for carrier-current
line systems or for digital line systems; videophones; parts thereof:
Other apparatus, for carrier-current line systems or

for digital line systems: Other: Telegraphic: Other."

The EN to heading 8517, HTSUS, states in relevant part:

> These systems are based on the modulation of an electrical
> carrier-current or of a light beam by analogue or digital signals. 
> Use is made of the carrier-current modulation technique and pulse code
> modulation (PCM) or some other digital system.  These systems are used
> for the transmission of all kinds of information (characters,
> graphics, images, or other data, etc.).
>
> \* \* \* \*
>
> Similar apparatus used for radio transmission systems is excluded
> (heading 85.25 or 85.27).

As heading 8517, HTSUS, covers only apparatus for line telephony or
telegraphy, classification of the subject merchandise, which receives
radio frequencies, under heading 8517, HTSUS, is precluded. The EN to
heading 8517, HTSUS, supports this conclusion.

Subheading 8527.90.9590, HTSUS, provides for: "Reception apparatus for
radiotelephony, radiotelegraphy or radiobroadcasting, whether or not
combined, in the same housing, with sound recording or reproducing
apparatus or a clock: Other apparatus: Other: Other: Other, Other."

The EN to heading 8527, HTSUS, provides in relevant part:

> The sound radio‑broadcasting apparatus falling in this heading must be
> for the reception of signals by means of electro‑magnetic waves
> transmitted through the ether without any line connection.

This group includes :

> (1)   Domestic radio receivers of all kinds (table models, consoles,
> receivers for mounting in furniture, walls, etc., portable models,
> receivers, whether or not combined, in the same housing, with sound
> recording or reproducing apparatus or a clock).

\* \* \* \*

The instant merchandise receives radio frequency signals from the
patients' tags through the ether without any line connection and passes
that information via a local area network to a PC server. Its principal
function is radio frequency reception. Indeed, the radio frequency
reception is a necessary predicate to the subsequent transmission of the
signals to the infant monitoring system. Therefore, we find it is
classified in heading 8527, HTSUS, as reception apparatus for
radiotelegraphy. It is distinguishable from the merchandise at issue in
NY M82159, which transmitted a signal through optical fiber cable and
coaxial cable thereby precluding classification in heading 8527, HTSUS.
Rather, it is more akin to the Nurse Call Local Unit at issue in NY
C82035, dated December 19, 1997, which was designed to receive signals
concerning a patient's condition in a hospital, nursing home or other
care facility. The Nurse Call Local Unit was classified in heading 8527,
HTSUS.

HOLDING:

Protest number 3004-07-100164 is DENIED. Pursuant to GRI 1, the e-Link
receiver is classified in heading 8527, HTSUS. It is provided for in
subheading 8527.90.9590, HTSUS, which provides for "Reception apparatus
for radiotelephony, radiotelegraphy or radiobroadcasting, whether or not
combined, in the same housing, with sound recording or reproducing
apparatus or a clock: Other apparatus: Other: Other: Other, Other." The
rate of duty at the time of entry was 6% *ad valorem*.

In accordance with the Protest/Petition Processing Handbook, (CIS HB,
January 2002, pp 18 and 21), you are to mail this decision, together
with the CBP Form 19, to the protestant no later than 60 days from the
date of this letter. Any reliquidation of the entry in accordance with
the decision must be accomplished prior to mailing the decision. Sixty
days from the date of the decision, Regulations and Rulings of the
Office of International Trade will make the decision available to CBP
personnel, and to the public on the CBP Home Page on the World Wide Web
at www.cbp.gov, by means of the Freedom of Information Act, and other
methods of public distribution.

> Sincerely,
>
> Myles B. Harmon, Director
>
> Commercial and Trade Facilitation Division