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Digital Cameras Capable of Capturing Still and Moving Images Classified in Duty-Free Subheading, Court Says

Monday, December 30, 2013
Sandler, Travis & Rosenberg Trade Report

The U.S. Court of International Trade ruled Dec. 23 that certain “net-sharing cams” capable of capturing still images at five different resolutions and moving images at two resolutions are properly classified as digital still image video cameras under HTSUS 8525.80.40 (duty free) because that provision encompasses digital cameras capable of recording both still and moving images. U.S. Customs and Border Protection had classified these items as other television cameras, digital cameras and video camera recorders under HTSUS 8525.80.50, subject to a 2.1% duty rate.

The CIT focused on the correct eight-digit tariff classification of the merchandise because there was no question regarding its classification at the four- or six-digit level. CBP argued that the phrase “digital still image video cameras” in HTSUS 8525.80.40 references a single function article capable only of capturing still pictures and recording them by electronic means. For CBP, the word “video” in the context of the full phrase refers to a technology used for the capture and reproduction of images by electronic means, rather than film. Under this interpretation, a camera that principally records still images by electronic means is a still image video camera but one that primarily captures moving images is not.

The plaintiff, on the other hand, argued that the phrase “digital still image video cameras” is intended to cover digital cameras that are capable of taking both still images and moving images. It noted that CBP’s interpretation of the term “video” would make that word redundant because the word “digital” already provides that the camera captures pictures electronically. The plaintiff added that since each word of subheading 8525.80.40 must be given meaning, “video” must mean something other than electronic picture capture and this meaning can only be “moving pictures.”

The court found, among other things, that CBP has not consistently interpreted HTSUS 8525.80.40 as covering any article that would be identified as a “digital camera” regardless of whether the camera could capture both still and moving images. It agreed with the plaintiff that “moving images” is the meaning of “video” in HTSUS 8525.80.40 and observed that the inclusion of the word “digital” in the phrase “digital still image video cameras” serves to distinguish moving image video recorders using digital technology from video camera recorders using analog technology, which fall under HTSUS 8525.80.50. The CIT concluded that since a single tariff provision, 8525.80.40, fully describes the merchandise at hand, “it is not necessary to engage in an analysis beyond GRI 1.” While the merchandise is a machine capable of two functions (i.e., capturing moving and still images), the court stressed that both of those functions are described by subheading 8525.80.40.

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