H303881

HQ H303881 April 30, 2021 OT:RR:CTF:TCM H303881 TPB CATEGORY: Classification TARIFF NO.: 6404.11.90 Casey Richter Jeffrey Whalen Counsel for Nike USA, Inc. One Bowerman Drive Beaverton, OR 97005-6453 Re: Tariff classification of the Nike Adapt BB basketball shoe Dear Sirs: This in response to your correspondence, dated January 18, 2019, in which you requested a prospective binding tariff classification ruling from U.S. Customs and Border Protection (CBP) on behalf Nike USA, Inc. Your ruling request concerns the tariff classification of certain footwear incorporating Nike wearable technology (Nike Adapt BB) under the Harmonized Tariff Schedule of the United States. This ruling also takes into consideration information presented to CBP in your video conference of February 23, 2021 as well as the written supplement provided by your counsel on March 12, 2021. FACTS: You request a tariff classification ruling concerning certain Nike wearable technology, referred to as the Adapt BB, or “Adapt”. In your request, you state that the Adapt platform consists of five primary components: (1) a Bluetooth® system-on-chip (SoC); (2) a sensor pack consisting of a gyroscope, accelerometer, and capacitive sensor; (3) system and subsystem components including three microcontroller unit (MCU) processors, flash memory and a wireless power receiver; (4) an auto-lacing platform with an optical quadrature rotary encoder and a low-resistance, high-torque, DC motor; and (5) a “performance basketball shoe” housing. As imported, the Nike Adapt BB contains one pair of shoes (incorporating the above electronics components), a wireless charging pad, a USB cable/wall charger combo and operating manual packaged together for retail sale. Below are two photographs that are representative of the merchandise at issue in its condition as imported: Image 1 
 Image 2 
   ISSUE: What is the tariff classification of the Nike Adapt BB? LAW AND ANALYSIS: Classification under the Harmonized Tariff Schedule of the United States (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 in their appropriate order. In your request, you indicate that the Adapt is a fitness platform, which combines wireless communication technology with sensing and fitness tracking, and packages it into auto-adjustable performance footwear. The platform consists of five primary components: 1) a Bluetooth system on chip (SoC), 2) a sensor pack - gyroscope, accelerometer, and capacitive sensor, 3) system and subsystem components – microcontroller unit processors, flash memory and power receiver, 4) an auto lacing platform, optical quadrature rotary encoder, a DC motor, and (5) a performance basketball shoe housing. You also provided a cost break-down of the product. You note that the Adapt includes multiple components and functions that are not described under any single provision of the HTSUS. You provide a description of the Adapt’s materials and components and their proposed classification as follows: Bluetooth SoC – heading 85.17, which provides for telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network, other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528; parts thereof; Sensors – heading 90.31 which provides for measuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter; profile projectors; parts and accessories thereof; System Technologies: Data Processing – heading 85.42 which provides for electronic integrated circuits; parts thereof; Memory – heading 85.23 which provides for discs, tapes, solid-state non-volatile storage devices, "smart cards" and other media for the recording of sound or of other phenomena, whether or not recorded, including matrices and masters for the production of discs, but excluding products of Chapter 37; Auto-fit technology – heading 85.01 which provides for electric motors and generators (excluding generating sets); Wireless charging pad – heading 85.04 which provides for electrical transformers, static converters (for example, rectifiers) and inductors. Shoe – heading 64.04 which provides for footwear with outer soles of rubber, plastics, leather or composition leather and uppers of textile materials. According to your submission, the value of the Bluetooth SoC, sensors, memory, and other electronic components, when taken together, constituted the largest percentage of landed costs when compared to the footwear base and packaging, although we note that the value of the electronic components is not further broken down. Based on the above, it is your view that the Adapt is a good consisting of different materials and made up of different components. As such, classification cannot be done under any single provision of the HTSUS so we turn to GRI 2, which states that the classification of goods consisting of more than one material or substance shall be according to the principles of GRI 3. See General Rule of Interpretation 2(b). Rule 3 reads: When by application of Rule 2 (b) or for any other reason, goods are prima facie, classifiable under two or more headings, classification shall be effected as follows: The heading which provides the most specific description shall be preferred to headings providing a more general description. However, when two or more headings each refer to part only of the materials or substances contained in mixed or composite goods or to part only of the items in a set put up for retail sale, those headings are to be regarded as equally specific in relation to those goods, even if one of them gives a more complete or precise description of the goods. Mixtures, composite goods consisting of different materials or made up of different components, and goods put up in sets for retail sale, which cannot be classified by reference to 3 (a), shall be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable When goods cannot be classified by reference to 3 (a) or 3 (b), they shall be classified under the heading which occurs last in numerical order among those which equally merit consideration The Harmonized Commodity Description and Coding System Explanatory Notes (ENs) constitute the official interpretation of the Harmonized System (HS) at the international level. While not legally binding, the ENs provide a commentary on the scope of each heading of the HS and are thus useful in ascertaining the proper classification of merchandise. It is CBP’s practice to follow, whenever possible, the terms of the ENs when interpreting the HTSUS. See T.D. 89-90, 54 Fed. Reg. 35127, 35128 (August 23, 1989). The Explanatory Note to GRI 3(b) states: (VII) In all these cases the goods are to be classified as if they consisted of the material or component which gives them their essential character, insofar as this criterion is applicable. (VIII) The factor which determines essential character will vary as between different kinds of goods. It may, for example, be determined by the nature of the material or component, its bulk, quantity, weight or value, or by the role of a constituent material in relation to the use of the goods. (IX) For the purposes of this Rule, composite goods made up of different components shall be taken to mean not only those in which the components are attached to each other to form a practically insep

Classification under the Harmonized Tariff Schedule of the United States (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 in their appropriate order. In your request, you indicate that the Adapt is a fitness platform, which combines wireless communication technology with sensing and fitness tracking, and packages it into auto-adjustable performance footwear. The platform consists of five primary components: 1) a Bluetooth system on chip (SoC), 2) a sensor pack - gyroscope, accelerometer, and capacitive sensor, 3) system and subsystem components – microcontroller unit processors, flash memory and power receiver, 4) an auto lacing platform, optical quadrature rotary encoder, a DC motor, and (5) a performance basketball shoe housing. You also provided a cost break-down of the product.You note that the Adapt includes multiple components and functions that are not described under any single provision of the HTSUS. You provide a description of the Adapt’s materials and components and their proposed classification as follows:Bluetooth SoC – heading 85.17, which provides for telephone sets, including telephones for cellular networks or for other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network (such as a local or wide area network, other than transmission or reception apparatus of heading 8443, 8525, 8527 or 8528; parts thereof;Sensors – heading 90.31 which provides for measuring or checking instruments, appliances and machines, not specified or included elsewhere in this chapter