H301814

U.S. Customs and Border Protection HQ H301814 July 13, 2020 CLA-2 OT:RR:CTF:EMAIN HQ H301814 NVF CATEGORY: Classification TARIFF NO.: 8479.89.94 Customs and Border Protection Port of Chicago 5600 Pearl Street Rosemont, IL 60018 Attn: Mr. Osbaldo Cruz, Supervisory Import Specialist RE: Request for Internal Advice on Tariff Classification of the SoftBank PEPPER Robot Dear Port Director: This is in response to a request for internal advice concerning the proper classification of a PEPPER robot (“PEPPER” or “robot”). The request was filed by the law firm of Junker & Nakachi on behalf of SoftBank Robotics America, Inc. (“SoftBank”). In reaching our decision, we have considered information presented in SoftBank’s April 12, 2018 request, supplemental information provided via email, and publicly available information. On June 30, 2020, SoftBank waived their request to hold a conference. FACTS: The PEPPER robot is a wheeled, humanoid robot that contains a tablet on its chest. It can move and interacts with people using the tablet and artificial speech. The robot is capable of analyzing voice, facial expressions, and vocabulary to allow it to read human emotions and interact with human beings. The robot has four major components: an electrical block unit, hip and knee motors, the tablet, and a rechargeable lithium ion battery. The electrical block unit and the tablet both contain an internal computer with RAM and flash memory. Other components include, but are not limited to: additional electronic boards, two autofocus cameras, a 3D camera, loudspeakers, microphones, Android OS, various LEDs, multiple small motors, and laser, infrared, sonar and touch sensors. PEPPER can store its own programming or access cloud-based software. In its request for internal advice, SoftBank states that it has developed two applications for PEPPER: Promotor and Host. The Promotor application is described as used to engage and attract customers, manage promotional content in real time, and capture customer data, among other functions. The Host application is described as used to greet customers or guests when they walk through the door, let everyone know who has arrived and when, and answer frequently asked questions. However, the robot runs on an open platform and therefore can be customized or further developed according to the user’s needs. Indeed, PEPPER is programmable in several programming languages and users can create new apps and functions to change how the robot performs. SoftBank estimates that approximately 50% of the units it will deploy in the next 12 months will run either the Promotor or Host application, 25% will be used to develop new applications, and 25% will be used in an academic setting. As an example, SoftBank states that the San Francisco Unified School District and Boston Public School will use PEPPER as a learning tool to support computer science education at the high school level. ISSUES: Whether the robot is classified under heading 9023, HTSUS, as apparatus or models designed for demonstrational purposes; heading 8471, HTSUS as an automatic data processing machine; or under heading 8479, HTSUS, as a machine having individual functions not specified elsewhere. 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 GRIs 2 through 6 may then be applied in order. The HTSUS subheadings 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: -------------------------------------------------------------- 8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof: -------------------------------------------------------------- 9023 Instruments, apparatus and models, designed for demonstrational purposes (for example, in education or exhibitions), unsuitable for other uses, and parts and accessories thereof: -------------------------------------------------------------- SoftBank argues that the robot should be classified as apparatus designed for demonstrational purposes of subheading 9023.00.0000, HTSUS. As support for this position, SoftBank asserts that PEPPER has been sold explicitly for demonstrations and tours. It also argues that PEPPER is similar to the robotic baby in HQ H201596 (May 7, 2016) (RealCare Baby), which we classified under heading 9023, HTSUS. In the alternative, SoftBank argues that the robot is properly classified under subheading 8471.41.0150, HTSUS, which provides for automatic data processing machines. SoftBank also argues that heading 8479 is precluded from consideration because it is a residual provision intended to encompass articles that do not fall under a more specific heading. Finally, SoftBank asserts that PEPPER is not an article intended for amusement and therefore cannot be classified under heading 9503 as a wheeled toy, or under heading 9505 as other articles of entertainment. Note 1(m) to Section XVI, which encompasses Chapter 84 states that Section XVI does not cover articles of Chapter 90. Therefore we must first consider whether the subject robot is prima facie classifiable as an article of heading 9023, HTSUS. The Harmonized Commodity Description and Coding System Explanatory Notes (“ENs”) constitute the official interpretation of the HTSUS. While not legally binding or 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 at the international level. See T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989). Heading 9023 describes “instruments, apparatus and models” which are “designed for demonstrational purposes” and are “unsuitable for other uses.” EN 90.23 provides in pertinent part: This heading covers a wide range of instruments, apparatus and models designed for demonstrational purposes (e.g., in schools, lecture rooms, exhibitions) and unsuitable for other uses. Subject to this proviso, the heading includes: Special demonstrational machines or appliances such as the Wimshurst machine (for experiments with electricity), the Atwood machine (for demonstrating the law of gravity), Magdeburg hemispheres (for demonstrating the effects of atmospheric pressure), the Gravesande ring (for demonstrating thermal expansion), Newton’s disc (for demonstrating the colour composition of white light). Models of human or animal anatomies (whether or not articulated or fitted with electric lighting); models of stereometric bodies, of crystals, etc. Models of this kind are usually made of plastics or of compositions based on plaster. Training dummies, constituting an inflatable life-size model of the human body with artificial respiratory parts reproducing those of a human being; used for training in the “kiss-of-life” revival method. Cross-sectional models of ships, locomotives, engines, etc., cut to show their internal operation or the functioning of an important part; panels showing, in relief, for example, the assembly of a radio (for radiotelegraphists’ schools), or the oil circulation in an engine, etc., whether or not fitted with an electric lighting system. Show-cases and exhibit panels, etc., displaying samples of raw materials (textile fibres, woods, etc.), or showing the various stages of manufacture or processing of a product (for instruction in technical schools). Models, etc., for artillery training, used i

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 GRIs 2 through 6 may then be applied in order. The HTSUS subheadings 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:--------------------------------------------------------------8479 Machines and mechanical appliances having individual functions, not specified or included elsewhere in this chapter; parts thereof:--------------------------------------------------------------9023 Instruments, apparatus and models, designed for demonstrational purposes (for example, in education or exhibitions), unsuitable for other uses, and parts and accessories thereof:--------------------------------------------------------------SoftBank argues that the robot should be classified as apparatus designed for demonstrational purposes of subheading 9023.00.0000, HTSUS. As support for this position, SoftBank asserts that PEPPER has been sold explicitly for demonstrations and tours. It also argues that PEPPER is similar to the robotic baby in HQ H201596 (May 7, 2016) (RealCare Baby), which we classified under heading 9023, HTSUS. In the alternative, SoftBank argues that the robot is properly classified under subheading 8471.41.0150, HTSUS, which provides for automatic data processing machines. SoftBank also argues that heading 8479 is precluded from consideration because it is a residual provision intended to encom