CSMS Message: 00-001099

TO : ALL ABI BROKERS.

FROM : JIM H TOKMENKO

SUBJECT : MIS- ABI DAILY MESSAGE

DATE : 09/20/2000

ABI DAILY MESSAGE

THE PURPOSE OF THIS ABI DAILY MESSAGE IS CALL ATTENTION TO A
PATTERN OF DISCREPANCIES AND NON-COMPLIANCE INVOLVING THE
IMPORTATIONS OF MERCHANDISE ENTERED UNDER HTS 8479.89.8590 AND
HTS 8479.89.9797, WHICH HAVE LED TO AN UNACCEPTABLE COMPLIANCE
RATE IN THE PAST SEVERAL FISCAL YEARS. BOTH OF THESE TARIFF
PROVISIONS APPLY TO MACHINES AND MECHANICAL APPLIANCES WHICH
HAVE INDIVIDUAL FUNCTIONS NOT SPECIFIED OR INCLUDED ELSEWHERE IN
CHAPTER 84. HTS 8479.89.8590 COVERS "OTHER" TYPES OF MACHINES
FOR PROCESSING OF SEMICONDUCTOR MATERIALS AND CARRIES A DUTY
FREE STATUS, WHILE HTS 8479.89.9797 PROVIDES FOR "OTHER, OTHER,
OTHER, OTHER TYPES OF MACHINES AND MECHANICAL APPLIANCES NOT
SPECIFICALLY PROVIDED FOR ELSEWHERE" AND IS CURRENTLY DUTIABLE
AT 2.5 PERCENT AD VALOREM.

RESEARCH CONDUCTED BY THE U.S. CUSTOMS STRATEGIC TRADE CENTER IN
SOUTH FLORIDA, WHICH HAS INCLUDED A REVIEW OF ALL NON-COMPLIANT
IMPORTATIONS OF OTHER MACHINE NSPF UNDER HTS 8479.89.8590 AND
HTS 8479.89.9797, IMPORTED FROM OCTOBER 1, 1999, THROUGH JULY
31, 2000, HAS IDENTIFIED SEVERAL SIGNIFICANT PATTERNS TO THESE
DISCREPANCIES.

IN ORDER TO BE PROPERLY CLASSIFIED UNDER HTS 8479.89.8590, THE
IMPORTED MACHINES MUST BE USED FOR PROCESSING SEMICONDUCTOR
MATERIALS, OR FOR PRODUCING OR ASSEMBLING SEMICONDUCTOR DEVICES,
ELECTRONIC SEMICONDUCTOR DEVICES, OR ELECTRONIC INTEGRATED
CIRCUITS AND MUST NOT BE MORE SPECIFICALLY PROVIDED IN ONE OF
THE FOUR STATISTICAL BREAKOUTS SPECIFICALLY LISTED, AND MUST NOT
BE MORE SPECIFICALLY PROVIDED FOR ELSEWHERE IN HTS CHAPTER 84.
THE TYPES OF MACHINES WHICH ARE PROPERLY CLASSIFIED UNDER HTS
8479.89.8590 IS STRICTLY LIMITED BY THE NARROWLY DEFINED TARIFF
STRUCTURE OF THIS PROVISION. HOWEVER, WIDESPREAD AND SIGNIFICANT
CLASSIFICATION DISCREPANCIES ARE BEING FOUND IN THIS TARIFF
PROVISION, OFTEN RESULTING IN A LOSS OF REVENUE. THE TWO MOST
COMMON TYPES OF DISCREPANCIES FOUND INVOLVE:

* MACHINES WHICH ARE NOT USED IN ANY WAY TO PROCESS
SEMICONDUCTOR MATERIALS OR PRODUCE SEMICONDUCTOR DEVICES AND
ELECTRONIC INTEGRATED CIRCUITS ARE FOUND MISCLASSIFIED UNDER
THIS TARIFF PROVISION. THESE MACHINES ARE PROVIDED FOR
ELSEWHERE IN HTS CHAPTER 84, AND OFTEN UNDER A DUTIABLE
CLASSIFICATION. THE FOLLOWING CATEGORIES OF MACHINES ARE NOT
ELIGIBLE FOR CLASSIFICATION UNDER HTS 8479.89.8590:

-MACHINES FOR MAKING CD'S OR DVD'S;

-MACHINES FOR MAKING PRINTED CIRCUIT BOARDS OR FOR
ASSEMBLING SEMICONDUCTOR DEVICES OR ELECTRONIC
INTEGRATED CIRCUITS ON TO PRINTED CIRCUIT BOARDS;

-MACHINES FOR MAKING COMPACITORS OR RESISTORS;

* MISCLASSIFICATION OF MACHINERY WHICH IS USED TO PROCESS
SEMICONDUCTOR MATERIALS, OR PRODUCES ELECTRONIC INTEGRATED
CIRCUITS, BUT WHICH IS MORE SPECIFICALLY PROVIDED FOR IN THE
FOUR PROVISIONS WITHIN HTS 8479.89.85. THESE ERRORS EFFECT
TRADE STATISTICS AND CAN HAVE A NEGATIVE IMPACT ON THE
SEMICONDUCTOR INDUSTRY.

HTS 8479.89.9797 APPLIES TO "OTHER, OTHER, OTHER, OTHER MACHINES
AND MECHANICAL APPLIANCES HAVING INDIVIDUAL FUNCTIONS, NOT
SPECIFIED OR INCLUDED ELSEWHERE IN HTS CHAPTER 84". THESE
MACHINES CANNOT BE CLASSIFIED IN ANY OTHER PARTICULAR HEADING OF
CHAPTER 84 BECAUSE NO OTHER HEADING COVERS THEM BY REFERENCE TO
THEIR METHOD OF FUNCTIONING, DESCRIPTION, OR TYPE, AND NO OTHER
HEADING COVERS THEM BY REFERENCE TO THEIR USE OR TO THE INDUSTRY
IN WHICH THEY ARE EMPLOYED, OR THEY COULD FALL EQUALLY WELL INTO
TWO (OR MORE) OTHER SUCH HEADINGS (GENERAL PURPOSE MACHINES). A
DETAILED LISTING OF THE TYPES OF MACHINES WHICH ARE PROPERLY
CLASSIFIED WITHIN HTS 8479, AS WELL AS THOSE WHICH ARE NOT
PROVIDED FOR UNDER HTS 8479, CAN BE FOUND ON PAGES 1313-1318 OF
THE EXPLANATORY NOTES.

THE MOST COMMON TYPE OF DISCREPANCY FOUND WITHIN HTS
8479.89.9797 INVOLVES THE MISCLASSIFICATION OF VARIOUS TYPES OF
MACHINES WHICH ARE MORE SPECIFICALLY PROVIDED FOR ELSEWHERE
WITHIN HTS CHAPTER 84 UNDER THIS "BASKET" PROVISION. THIS ERROR
OFTEN OCCURS WHEN IMPORT INVOICES ARE INSUFFICIENT, AND/OR THE
IMPORTER/BROKER FAILS TO USE REASONABLE CARE WHEN CLASSIFYING
THE IMPORTED MACHINERY.

ON SEPTEMBER 18, 2000, THE SOUTH FLORIDA STRATEGIC TRADE CENTER
ISSUED INFORMED COMPLIANCE LETTERS TO 383 SIGNIFICANT IMPORTERS
OF HTS 9479.90.8590 AND HTS 8479.89.9797, BOTH OF WHICH APPLY TO
MACHINES AND MECHANICAL APPLIANCES WHICH HAVE INDIVIDUAL
FUNCTIONS NOT SPECIFIED OR INCLUDED ELSEWHERE IN CHAPTER 84.
THE PURPOSE OF THESE LETTERS WAS TO INFORM THE IMPORTERS OF OUR
CONCERNS AND THE CURRENT TREND OF DISCREPANCIES. THESE FIRMS
WERE ALSO NOTIFIED THAT IF THEIR COMPANY'S INDIVIDUAL IMPORT
TRANSACTIONS ARE NOT FREE FROM THESE TYPE OF ERRORS OUTLINED IN
THE LETTERS, AND THEY DO NOT TAKE IMMEDIATE CORRECTIVE ACTIONS
DESIGNED TO FOSTER COMPLIANCE, THEIR COMPANY COULD FIND ITSELF
SUBJECT TO INCREASED ENTRY REVIEWS AND/OR CARGO EXAMINATIONS,
PENALTIES, OR OTHER REMEDIAL ACTIONS.

BEGINNING OCTOBER 1, 2000 U.S. CUSTOMS WILL INITIATE INCREASED
SCRUTINY OF MERCHANDISE ENTERING THE UNITED STATES CLASSIFIED
UNDER EITHER OF THESE TWO PROVISIONS. THIS INCREASED SCRUTINY
MAY INCLUDE BOTH INCREASE CARGO EXAMINATIONS AND/OR ENTRY
SUMMARY REVIEWS. ANY DISCREPANCIES NOTED WILL BE REFERRED TO THE
ENFORCEMENT EVALUATION TEAMS AT THE PORTS OF ENTRY FOR FURTHER
ACTIONS AS WARRANTED.

THIS ABI DAILY MESSAGE IS BEING PROVIDED TO HELP MAXIMIZE
COMPLIANCE AND AVOID THE ERRORS WHICH ARE COMMON TO MERCHANDISE
CLASSIFIED UNDER HTS 8479.89.8590 AND HTS 8479.899797. FOR
FURTHER INFORMATION, PLEASE CONTACT THE IMPORT SPECIALISTS AT
YOUR LOCAL PORT OF ENTRY, OR INTERNATIONAL TRADE SPECIALIST AT
THE SOUTH FLORIDA STRATEGIC TRADE CENTER AT (954) 327-2806.