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Court Upholds Classification of Fiber Optic Network Components as Optical Instruments

Monday, February 25, 2019
Sandler, Travis & Rosenberg Trade Report

The Court of Appeals for the Federal Circuit has upheld an October 2017 ruling by the Court of International Trade that three types of fiber optic telecommunications network equipment are properly classified as optical appliances and instruments under HTSUS 9013.80.90 (4.5 percent duty). The plaintiff had argued for classification as machines for the reception and transmission of voice, images, or other data under HTSUS 8517.62.00 (duty-free).

The items at issue are splitter modules, which enable single signals to reach multiple subscribers; monitor modules, which allow access to signaling and control functions to evaluate network performance and detect problems; and wavelength division multiplexer modules, which permit signals of two different wavelengths to travel simultaneously on a single fiber. Each model has connectors on the ends of the fibers and protective housings or jacketing over the fibers to ease installation. None contain any electronic components or electrical circuit boards.

The CAFC states that optical appliances and instruments of HTSUS heading 9013 must incorporate one or more optical elements that serve more than a subsidiary purpose. The court upholds the CIT’s finding that “optical” refers to not only visible light but also the adjacent parts of the electromagnetic spectrum (i.e., infrared and ultraviolet) and concludes that because the equipment at issue exclusively uses such light to accomplish its function it is classified in heading 9013.

For more information on trade litigation, please contact Arthur Purcell at (212) 549-0131.

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