H308264

 HQ H308264 April 30, 2021 OT:RR:CTF:CPMMA H308264 AJK CATEGORY: Classification TARIFF NO: 9031.49.9000 Mr. Brian S. Goldstein Duane Morris LLP 1540 Broadway New York, NY 10036-4086 RE: Request for Reconsideration of NY N306741; Classification of Universal Bill Acceptor Dear Mr. Goldstein: This letter is in response to your reconsideration request, dated January 9, 2020, on behalf of your client, JCM American Corporation (JCM), in which you requested a reconsideration of New York Ruling Letter (NY) N306741, dated November 13, 2019, concerning the classification of the universal bill acceptors (UBA) under the Harmonized Tariff Schedule of the United States (HTSUS). U.S. Customs and Border Protection (CBP) has reviewed NY N306741 and found it to be correct with respect to the classification of the UBA. FACTS: The subject merchandise was described in NY N306741 as follows: The products under consideration are referred to as Universal Bill Acceptors (UBA), model numbers UBA-10, UBA-14 and UBA-24. You state that the UBAs are able to detect multiple currencies simultaneously and distinguish counterfeit bills. The UBAs are used in industries such as banking, financial, gaming, kiosk, retail, transportation, vending and specialty industries. Each UBA model is composed of three subparts, which include a transport unit, frame and cash box. The UBA-14 also includes Universal Serial Bus (USB) communication capabilities. The UBA-24 adds the feature of upside-down mounting capability. Finally, each model contains magnetic and optical sensing as well as mechanical anti-stringing technology. ISSUE: Whether the UBA is classified in heading 9031, HTSUS, as a banknote measuring machine, or heading 9504, HTSUS, as a part of a gaming machine operated by banknotes. LAW AND ANALYSIS: Classification of goods under HTSUS is governed by the General Rules of Interpretation (GRI), and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation (ARI). 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 GRIs 2 through 6 may then be applied in order. The ARI 1(a), which applies to principal use provisions, provides as follows: In the absence of special language or context which otherwise requires-- a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use; …. * * * * * * The HTSUS provisions at issue are as follows: 9031 Measuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter; profile projectors; parts and accessories thereof: Other optical instruments and appliances: 9031.49 Other: 9031.49.90 Other 9504 Video game consoles and machines, 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: 9504.30.00 Other games, operated by coins, banknotes, bank cards, tokens or by any other means of payment, other than automatic bowling alley equipment; parts and accessories thereof Other: Games: 9504.30.0060 Parts and accessories * * * * * * Note 1 to Chapter 90, HTSUS, provides, in pertinent part: This chapter does not cover: … (k) Articles of chapter 95; .... Note 3 to Chapter 95, HTSUS, provides, as follows: Subject 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. Subheading Note to Chapter 95, HTSUS, provides, in pertinent part: [Subheading 9504.50] does not cover video game consoles or machines operated by coins, banknotes, bank cards, tokens or by any other means of payment (subheading 9504.30). * * * * * * The Harmonized Commodity Description and Coding System (HS) Explanatory Notes (ENs) constitute the official interpretation of the HS. While not legally binding or dispositive, the ENs provide a commentary on the scope of each heading of the HS at the international level, and are generally indicative of the proper interpretation of these headings. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989). The General EN to Chapter 95, HTSUS, provides, in pertinent part: Each of the headings of this Chapter also covers identifiable parts and accessories of articles of this Chapter which are suitable for use solely or principally therewith, and provided they are not articles excluded by Note 1 to this Chapter. EN 90.31, HTSUS, provides, in pertinent part: [T]his heading covers measuring or checking instruments, appliances and machines, whether or not optical. The Subheading EN for subheading 9031.49, HTSUS, provides as follows: This subheading covers not only instruments and appliances which provide a direct aid or enhancement to human vision, but also other instruments and apparatus which function through the use of optical elements or processes. EN 95.04, HTSUS, provides, in pertinent part: This heading includes: … (6) Machines, operated by coins, banknotes, bank cards, tokens or by other means of payment, of the kind used in amusement arcades, cafés, funfairs, etc., for games of skill or chance (e.g., machines for revolver practice, pintables of various types).… The Subheading EN for subheading 9504.50, HTSUS, provides as follows: This subheading does not cover video game consoles or machines operated by coins, banknotes, bank cards, tokens or by any other means of payment; these are to be classified in subheading 9504.30. * * * * * * It is undisputed that the UBA is not a stand-alone machine and that it is used as an internal component of other machines that need a separate part to accept, verify, and store banknotes. In NY N306741, CBP classified the merchandise in heading 9031, HTSUS, as a banknote measuring machine under GRI 1, because it found that the principal use of the merchandise is to validate and determine the authenticity of banknotes and store them. In your reconsideration request, however, you contend that CBP’s classification was incorrect and that the merchandise should be classified in heading 9504, HTSUS, as a part of gaming machines operated by banknotes. Upon our reconsideration, we affirm NY N306741 and hold that the UBA is properly classified in heading 9031, HTSUS. The Legal Note 3 to Chapter 95 provides that “parts and accessories which are suitable for use solely or principally with articles of [chapter 95] are to be classified with those articles.” The EN to subheading 9504.50 provides that “video game consoles or machines operated by … banknotes” are classified in subheading 9504.30. See also Subheading Note to Chapter 95. Accordingly, subheading 9504.30.00, HTSUS, which provides for parts of video game machines operated by banknotes, is a principal use provision subject to ARI 1(a). To classify an article under a principal provision, ARI 1(a) requires that the classification is controlled by the principal use of “goods of that class or kind to which the imported goods belong”. In United States v. Carborundum Co., the U.S. Court of Customs and Patent Appeals held that to determine whether an article is included in a particular class or kind of merchandise, the court must consider a variety of factors, including: (1) the general physical characteristics of the merchandise; (2) the channels, class or kind of trade in which the merchandise moves (i.e., where the merchandise is sold); (3) the expectation of the ultimate purchasers; (4) the environment of the sale (i.e., accompanying accessories and marke

Classification of goods under HTSUS is governed by the General Rules of Interpretation (GRI), and, in the absence of special language or context which otherwise requires, by the Additional U.S. Rules of Interpretation (ARI). 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 GRIs 2 through 6 may then be applied in order. The ARI 1(a), which applies to principal use provisions, provides as follows:In the absence of special language or context which otherwise requires--a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use; ….* * * * * *The HTSUS provisions at issue are as follows:9031 Measuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter; profile projectors; parts and accessories thereof: Other optical instruments and appliances:9031.49 Other:9031.49.90 Other9504 Video game consoles and machines, 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:9504.30.00 Other games, operated by coins, banknotes, bank cards, tokens or by any other means of payment, other than automatic bowling alley equipment; parts and accessories thereof Other: Games:9504.30.0060 Parts and accessories* * * * * *Note 1 to Chapter 90, HTSUS, provides, in pertinent part: This chapter does not cover: … (k) Articles of chapter 95; .... Note 3 to Chapter 95, HTSUS, provides, as follows: Subject to note 1