HQ 954249

August 9, 1993

CLA-2 CO:R:C:M 954249 MBR

CATEGORY: Classification

TARIFF NO.: 8471.99.15

Mr. Mark Jones
Import/Export Specialist
Hitachi America, Ltd.
50 Prospect Avenue
Tarrytown, New York 10591-4698

RE: Hitachi Telecom (USA), Inc.; Asynchronous Transfer Mode
Switch/Multiplexor; Model AMS5000; ATM; LAN; WAN; Automatic
Data Processing Machine; ADP; Control or Adapter Units;
Telegraphic Switch; HQ 952628; HQ 954093; HQ 954059; HQ 952659

Dear Mr. Jones:

This is in response to your letter of May 6, 1993, to the
Regional Commissioner of Customs, New York, requesting
classification of the Hitachi Telecom (USA), Inc., Asynchronous
Transfer Mode Switch/Multiplexor model AMS5000, under the
Harmonized Tariff Schedule of the United States ("HTSUS"). Your
letter was forwarded to this office for reply.

FACTS:

The Hitachi Asynchronous Transfer Mode Switch/Multiplexor
("ATM") model AMS5000 is designed for and marketed to network
service providers for the interconnection and communication of
local area networks ("LANs"). The ATM functions as a switching
device, routing data packets of information. The ATM closely
resembles a packet switching device. In addition to general LAN
automatic data processing ("ADP") information, the ATM is capable
of transmitting digital video, and multimedia, such as medical
imaging and high definition television ("HDTV").

ISSUE:

Is the Hitachi ATM classifiable under subheading 8517.30.50,
HTSUS, which provides for telegraphic switching apparatus, or under
subheading 8471.99.15, HTSUS, which provides for ADP "control or
adapter units"?


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LAW AND ANALYSIS:

The importer states that the ATM is designed for and marketed
to network service providers for the interconnection of LANs.

Legal note 5(B) to chapter 84, HTSUS, provides guidance
regarding the scope of the provisions for "units" of automatic data
processing machines. It states as follows:

Automatic data processing machines may be in the form of
systems consisting of a variable number of separately housed
units. A unit is to be regarded as being a part of the
complete system if it meets all of the following conditions:

(a) It is connectable to the central processing unit either
directly or through one or more other units; and

(b) It is specifically designed as part of such a system (it
must, in particular, unless it is a power supply unit,
be able to accept or deliver data in a form (code or
signals) which can be used by the system).

The ATMs are connectable numerous CPUs through the LAN
systems. Furthermore, the instant ATMs are designed for, and
essential to, the ADP systems with which they are integrated
because they process and format the data of the computers they
serve.

The Harmonized Commodity Description and Coding System
Explanatory Notes (ENs), pages 1299-1300, describe separately
presented ADP units as follows:

This heading also covers separately presented constituent
units of data processing systems. Constituent units are those
defined in Parts (A) and (B) above as being parts of a
complete system.

Apart from central processing units and input and output
units, examples of such units include:

* * * * * * * * * * * * * *

(4) Control and adaptor units such as those to effect
interconnection of the central processing unit to other
digital data processing machines, or to groups of input
or output units which may comprise visual display units,
remote terminals, etc.

Since the issuance of HQ 952659, dated October 7, 1992,
Customs has consistently held that LAN units are classifiable as
ADP control or adapter units in subheading 8471.99.15, HTSUS,
because they meet the chapter 84, legal note 5(B) definition.

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Furthermore, they meet the ENs, pages 1299-1300, which describe
separately presented ADP units. The instant ATM performs LAN
functions by, in fact, creating larger LAN networks.

Therefore, although the ATM is capable of transmitting other
digital signals, such as video images and medical imaging, it is
principally used for ADP LAN interconnection.

The current legal precedent for this merchandise is HQ 952628,
dated October 13, 1992, which held that a Packet Assembler
/Disassembler was classifiable in subheading 8471.99.15, HTSUS,
which provides for ADP control or adapter units. In HQ 952628 we
stated:

It is now our conclusion that the data processing features of
control and adaption do in fact represent the principal
function of the PAD unit, directing classification in
subheading 8471.99.15, HTSUS, which provides for: "[a]utomatic
data processing machines and units thereof: [o]ther: [o]ther:
[c]ontrol or adapter units."

Additionally, the ATM is similar to the merchandise ruled upon
in HQ 954093, dated July 22, 1993, and HQ 954059, dated July 16,
1993, which held that LAN packet switching merchandise was properly
classifiable under subheading 8471.99.15, HTSUS.

HOLDING:

The Hitachi model AMS5000 Asynchronous Transfer Mode Switch/
Multiplexor, which is designed for the interconnection of LANs, is
properly classifiable under subheading 8471.99.15, HTSUS, which
provides for: "[a]utomatic data processing machines and units
thereof: [o]ther: [o]ther: [c]ontrol or adapter units." The rate
of duty is Free.

Sincerely,


John Durant, Director