CSMS Message: 99-000472

TO : ALL ABI BROKERS.

FROM : BOB KERSTEIN

SUBJECT : ENT- USE OF HTS 8456

DATE : 06/18/1999

THE PURPOSE OF THIS ADMINISTRATIVE MESSAGE IS CALL ATTENTION TO
PATTERN OF DISCREPANCIES AND NON-COMPLIANCE INVOLVING HTS 8456
WHICH HAVE LED TO AN UNACCEPTABLE COMPLIANCE RATE IN THE PAST
SEVERAL FISCAL YEARS. HTS HEADING 8456 COVERS MACHINE TOOLS
WHICH REMOVE ANY MATERIAL BY LASER OR OTHER LIGHT OR PHOTON BEA
ULTRASONIC, ELECTRO-DISCHARGE, ELECTRO-CHEMICAL, ELECTRO-BEAM,
IONIC-BEAM OR PLASMA ARC PROCESSES.

MACHINES OF HTS 8456 ARE USED FOR SHAPING OR SURFACE WORKING OF
ANY MATERIAL, AND THEY MUST MEET THREE ESSENTIAL REQUIREMENTS:

(1) THEY MUST WORK BY REMOVING MATERIAL,
(2) THEY MUST CARRY OUT OPERATIONS PERFORMED BY MACHINE TOOLS
EQUIPPED WITH CONVENTIONAL TOOLS, FOUND IN HEADING 8457 THROUGH
8465, AND
(3) THEY MUST USE ONE OF THE FOLLOWING SEVEN PROCESSES: LASER O
OTHER LIGHT OR PHOTON BEAM, ULTRASONIC, ELECTRO-DISCHARGE,
ELECTRO-CHEMICAL, ELECTRON BEAM, IONIC-BEAM OR PLASMA ARC.
HTS HEADING 8456 DOES NOT CONTAIN PROVISIONS FOR PARTS AND
ACCESSORIES OF THESE MACHINES AND ALSO EXCLUDES ULTRASONIC
APPARATUS FOR CLEANING, SOLDERING, BRAZING OR WELDING MACHINES
AND APPARATUS (WHETHER OR NOT CAPABLE OF CUTTING), AND TESTING
MACHINES. RESEARCH CONDUCTED BY THE U.S. CUSTOMS STRATEGIC TRA
CENTER IN SOUTH FLORIDA, WHICH HAS INCLUDED A REVIEW OF ALL
NON-COMPLIANT IMPORTATIONS OF MACHINE TOOLS IN HTS 8456, IMPORT
FROM JUNE 1, 1998, THROUGH MAY, 31,1999, HAS IDENTIFIED SEVERA
SIGNIFICANT PATTERNS TO THESE DISCREPANCIES:

(1) HTS HEADING 8456 COVERS ONLY THOSE MACHINE TOOLS WHICH REMO
ANY MATERIAL BY LASER OR OTHER LIGHT OR PHOTON BEAM, ULTRASONIC
ELECTRO-DISCHARGE, ELECTRO- CHEMICAL, ELECTRON-BEAM, IONIC BEAM
OR PLASMA ARC PROCESSES. IF ONE OF THESE PROCESSES IS NOT USED
THE REMOVAL OF THE MATERIAL, THEN CLASSIFICATION UNDER HTS 8456
IS INAPPROPRIATE. ENTRY DOCUMENTATION SUBMITTED TO CUSTOMS SHOU
CLEARLY STATE THE PROCESS WHICH IS UTILIZED TO REMOVE THE
MATERIAL.

(2) CLASSIFICATION OF THE MACHINE TOOLS IN HTS HEADING 8456 IS
BASED UPON WHICH OF THE SEVEN PROCESSES IS INVOLVED IN REMOVING
THEMATERIAL. INVOICES SHOULD CLEARLY STATE THE PROCESS WHICH IS
UTILIZED TO REMOVE THE MATERIAL, I.E., ULTRASONIC, LASER BEAM,
ETC. MISCLASSIFICATIONS OFTEN OCCUR DUE TO INSUFFICIENT
INVOICES. LIKEWISE, CLASSIFICATION OF THE MACHINE TOOLS IN HTS
8456 IS ALSO DETERMINED BY WHETHER THE MACHINE WORKS METAL OR
SOME OTHER MATERIALS. METAL WORKING MACHINES ARE OFTEN
MISCLASSIFIED AS "OTHER" NON-METAL WORKING MACHINES. THESE
DISCREPANCIES ARE OFTEN CAUSED AGAIN BY INSUFFICIENT INVOICES.

(3) MACHINE PARTS AND ACCESSORIES ARE NOT PROVIDED FOR WITHIN
HTS HEADING 8456. THEREFORE, IF AN IMPORTED SHIPMENT CONTAINS
MACHINES, JUST PARTS AND ACCESSORIES FOR THE MACHINES, THESE
PARTS AND ACCESSORIES MUST NOT BE CLASSIFIED UNDER HTS 8456,
AND SHOULD BE INDIVIDUALLY CLASSIFIED ELSEWHERE WITHIN THE
HARMONIZED TARIFF SCHEDULE. WHEN CLASSIFYING THESE PARTS AND
1 ACCESSORIES, IMPORTERS MUST ABIDE BY THE RELEVANT SECTION NOTES
AND CHAPTER NOTES TO THE HARMONIZED TARIFF SCHEDULE SINCE THESE
NOTES PROVIDE THE LEGAL GUIDANCE AS TO WHAT ITEMS CAN AND CANNO
BE CLASSIFIED UNDER SPECIFIC TARIFF HEADINGS. FOR EXAMPLE, HTS
SECTION XVI NOTE 1(G) STATES THAT PARTS OF GENERAL USE, SUCH AS
NUTS, BOLTS, SCREWS, AND SPRINGS, ARE EXCLUDED FROM
CLASSIFICATION UNDER HTS CHAPTERS 84 AND 85, AND MUST BE
CLASSIFIED UNDER THEIR OWN APPROPRIATE HEADING.

LIKEWISE, ITEMS OF HTS CHAPTER 90 (MEASURING AND CHECKING
INSTRUMENTS; LASERS) ARE ALSO EXCLUDED FROM CLASSIFICATION UNDE
HTS CHAPTERS 84 AND 85 BY SECTION XVI NOTE 1(M). MANY MACHINE
PARTS AND ACCESSORIES FOR THE MACHINES COVERED BY HTS 8456 MAY
CLASSIFIED UNDER HTS 8466, UNLESS THESE PARTS AND ACCESSORIES A
SPECIFICALLY PROVIDED FOR ELSEWHERE WITHIN THE HARMONIZED TARIF
SCHEDULE. IMPORTERS SHOULD REMEMBER, THAT IN ACCORDANCE WITH TH
GENERAL RULES OF INTERPRETATION AND ANY RELEVANT LEGAL NOTES,
CERTAIN MACHINE PARTS ARE ALWAYS CLASSIFIED IN THEIR OWN
APPROPRIATE TARIFF HEADING, EVEN IF SPECIALLY DESIGNED TO WORK
PART OF A SPECIFIC MACHINE. EXAMPLES INCLUDE BEARINGS, MOTORS,
PUMPS, VALVES, CONTROLS, AND MEASURING DEVICES.

ADDITIONAL EXAMPLES OF MACHINE PARTS WHICH ARE ALWAYS CLASSIFIE
IN THEIR OWN APPROPRIATE TARIFF HEADING, EVEN IF SPECIALLY
DESIGNED TO WORK AS PART OF A SPECIFIC MACHINE, CAN BE FOUND IN
THE SECTION XVI NOTES TO THE HTS, AND ON PAGE 1225 OF THE
EXPLANATORY NOTES.

IF THE IMPORTED SHIPMENT CONSISTS OF MACHINES ONLY, YET THE
IMPORT INVOICE FOR THE MACHINE LISTS A BASE PRICE AND SEPARATEL
LISTS VARIOUS OPTIONS OR ACCESSORIES PROVIDED WITH THE MACHINE,
THE ITEMS REMAIN CLASSIFIED WITH THE MACHINE IN HTS 8456. IF TH
IMPORTED MACHINES CONTAIN SPARE PARTS, THESE SPARE PARTS MUST B
SEPARATELY IDENTIFIED ON YOUR INVOICE AND SEPARATELY CLASSIFIED

(4) OTHER DISCREPANCIES INCLUDE FAILURE TO PROPERLY MARK
IMPORTED GOODS WITH THE COUNTRY OF ORIGIN.

(5) HTS 8456 CONTAINS SEVERAL TARIFF PROVISIONS FOR MACHINERY
SPECIFICALLY DESIGNED TO PROCESS SEMICONDUCTOR WAFERS,
SPECIFICALLY HTS 8456.10.6000, HTS 8456.91.0000, 8456.99.1000,
AND HTS 8456.99.7000. NON-SEMICONDUCTOR PROCESSING MACHINERY I
OFTEN MISCLASSIFIED UNDER THESE SPECIFIC SEMICONDUCTOR
PROVISIONS.

(6) HTS SECTION XVI NOTE 1(M) STATES THAT ARTICLES OF HTS CHAPT
90, SUCH AS LASER AND LASER PARTS, ARE EXCLUDED FROM
CLASSIFICATION UNDER HTS CHAPTER 84. TO BE PROPERLY CLASSIFIEDI
HEADING 8456, THE IMPORTATION MUST INCLUDE THE WORK HANDLING AN
POSITIONING EQUIPMENT, NOT JUST THE LASER. LASERS AND PARTS OF
LASERS, WHICH THEMSELVES ARE PROPERLY CLASSIFIED UNDER HTS 9013
ARE OFTEN FOUND MISCLASSIFIED UNDER HTS 8456 AND/OR 8466.
HOWEVER, HTS 9013 EXCLUDES LASERS WHICH HAVE BEEN ADAPTED TO
PERFORM SPECIFIC FUNCTIONS BY ADDING ANCILLARY EQUIPMENT SUCH A
1 WORK TABLES, WORK HOLDERS, MEANS OF FEEDING AND POSITIONING WO
PIECES,ETC.

(7) MANY MACHINES THAT ARE SPECIFICALLY PROVIDED FOR ELSEWHERE
WITHIN HTS 8456 ARE MISCLASSIFIED UNDER THE "OTHER, OTHER"
PROVISIONS OF 8456.99. SPECIFICALLY, MACHINES OPERATED BY
ELECTRO-DISCHARGE PROCESSES, WHICH ARE PROVIDED FOR 8456.30, AR
OFTEN FOUND INCORRECTLY ENTERED UNDER 8456.99. INSUFFICIENT
INVOICES MAY AGAIN BE THE ROOT CAUSE OF THIS PROBLEM. A
SUPPLEMENTAL TECHNICAL FACT SHEET MAY BE NEEDED TO ASSIST YOUR
CUSTOMS BROKER IN CORRECTLY DESCRIBING AND CLASSIFYING THESE
GOODS FOR CUSTOMS PURPOSES.

(8) NUMERICALLY CONTROLLED MACHINES ARE CLASSIFIED AS
NON-NUMERICALLY, AND VISE VERSA. THESE TYPES OF DISCREPANCIES A
EASILY AVOIDED IF THE INVOICE IS SUFFICIENT, AND THE
IMPORTER/BROKER USES REASONABLE CARE WHEN CLASSIFYING THE
IMPORTED MERCHANDISE. (**NOTE: A "COMPUTER NUMERICAL CONTROL"
CNC, IS ESSENTIALLY A MICROPROCESSOR-BASED CONTROL FOR
CONTROLLING THE COORDINATED MOTIONS AND FUNCTIONS OF A MACHINE.

ON JUNE 17, 1999, THE SOUTH FLORIDA STRATEGIC TRADE CENTER ISSU
INFORMED COMPLIANCE LETTERS TO 188 SIGNIFICANT IMPORTERS OF
MACHINE TOOLS WHICH REMOVE ANY MATERIAL BY LASER OR OTHER LIGHT
OR PHOTON BEAM, ULTRASONIC, ELECTRO-DISCHARGE, ELECTRO-CHEMICAL
ELECTRO-BEAM, IONIC-BEAM OR PLASMA ARC PROCESSES, ALL OF WHICH
ARE CLASSIFIABLE UNDER HTS 8456. THE PURPOSE OF THESE LETTERS
WAS TO INFORM THE IMPORTERS OF OUR CONCERNS AND THE CURRENT TRE
OF DISCREPANCIES. THESE FIRMS WERE ALSO NOTIFIED THAT IF THEIR
COMPANY'S INDIVIDUAL IMPORT TRANSACTIONS ARE NOT FREE FROM THES
TYPE OF ERRORS OUTLINED IN THE LETTERS, AND THEY DO NOT TAKE
IMMEDIATE CORRECTIVE ACTIONS DESIGNED TO FOSTER COMPLIANCE, THE
COMPANY COULD FIND ITSELF SUBJECT TO INCREASED ENTRY REVIEWS
AND/OR CARGO EXAMINATIONS, PENALTIES, OR OTHER REMEDIAL ACTION
THIS ADMINISTRATIVE MESSAGE IS BEING PROVIDED TO HELP
MAXIMIZE COMPLIANCE AND AVOID THE ERRORS WHICH ARE COMMON TO
MERCHANDISE CLASSIFIED UNDER HTS 8456. FOR FURTHER INFORMATION
PLEASE CONTACT THE IMPORT SPECIALISTS AT YOUR LOCAL PORT OF
ENTRY, OR INTERNATIONAL TRADE SPECIALIST MICHELLE NUALART AT TH
SOUTH FLORIDA STRATEGIC TRADE CENTER AT (954) 327-2806.