Webcams and conference cameras are properly classified under tariff subheadings for communication apparatus that carry a zero rate of duty, the Court of International Trade ruled Aug. 24 in a case won by Sandler, Travis & Rosenberg attorneys.
The items at issue contain cameras, omnidirectional microphones, on-board video and audio processing, and other hardware and software designed for videoconferencing. The conference camera systems also contain speakerphones. U.S. Customs and Border Protection had classified these items as television cameras under HTSUS 8525.80.3010. The plaintiff contended that they are properly classified as communication apparatus under HTSUS 8517.69.0000 (webcams) or HTSUS 8517.62.0050 (conference cameras).
According to the CIT, the term “television cameras” in heading 8525 is an eo nomine provision; i.e., it describes articles by specific names and includes all forms of the named article. By contrast, the term “other apparatus for the transmission or reception of voice, images, or other data … for communication in a wired or wireless network” in heading 8517 is a principal use provision, which requires the court to determine the principal use of the goods at issue based on established factors. Broadly speaking, the CIT said, heading 8517 covers telephony apparatus while heading 8525 covers broadcast radio and television apparatus, and it is “helpful to keep in mind” whether the goods at issue are more telephonic or television.
The CIT found that the webcams and conference cameras are classifiable as television cameras under heading 8525 because they capture, convert, and transmit images to another location. However, the CIT also determined that the items are classified in heading 8517 because their physical characteristics point to their use to facilitate real-time videoconferencing, users expect to use the items in that way, and they are recognized in the trade for such use.
The CIT then determined pursuant to GRI 3(a) that heading 8517 provides a more specific description of the webcams and conference cameras than heading 8525. The CIT explained that heading 8517 has requirements that are more difficult to satisfy and describes the devices with a greater degree of accuracy and certainty, whereas heading 8525 describes the articles regardless of use.
The CIT’s decision also rejected the government’s position that heading 8517 is limited to intermediary networking equipment like the modems, routers, and multiplexers described in the Explanatory Notes to that heading, stating that nothing in the actual text of that heading limits it to such devices.
While all the tariff subheadings at issue in this case are currently duty-free, the court’s decision will provide for lower additional China Section 301 tariffs on the conference camera systems.
For more information on this decision or other tariff classification issues, please contact attorney Deb Stern at (305) 894-1007 or via email.
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