Main Idea: Automatic data processing (ADP) system units of heading 8471 must satisfy three criteria: sole or principal use in an ADP system, connectable to processing units, and capable of accepting or delivering data within the system.
In ruling NY N328964 (Nov. 10, 2022), Customs and Border Protection (CBP) discusses the tariff classification of the Grabba X-Series, a biometric scanner device. This device contains a fingerprint reader, passport reader, facial recognition scanner, barcode reader, RFID and Smart Card reader within a single enclosure. A USB connector connects the device to a compatible Android smartphone. Various industries, e.g., law enforcement, retail, security, border protection, emergency response services, travel, and warehousing, use the device to capture biometric and biographic data and populate the data on the smartphone for the user’s viewing.
Despite the requestor’s suggestion, CBP determines that the Grabba X-Series is not classified under subheading 8471.90.0000 of the Harmonized Tariff Schedule of the United States (HTSUS), which provides for “Automatic data processing [ADP] machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included: Other.”
To classify a machine as an ADP system unit under heading 8471, the item must meet the terms specified in Legal Note 6 (C) of Chapter 84, HTSUS, which are as follows:
(i) It is of a kind solely or principally used in an automatic data processing system;
(ii) It is connectable to the central processing unit either directly or through one or more other units; and
(iii) It is able to accept or deliver data in a form (code or signals) that can be used by the system.
The Grabba X-Series fails the first and second conditions set forth in Note 6 (C) to Chapter 84 because it is not primarily used in ADP systems, nor is it connectable to the central processing unit directly or through one or more other ADP units. Instead, the Grabba X-Series mounts to an Android smartphone to collect data from scannable sources (e.g., passport or biometric fingerprint). Therefore, the Grabba X-Series is not classifiable as an ADP system unit.
Instead, CBP concludes that the applicable subheading for the Grabba X-Series will be 8543.70.9860, HTSUS, which provides for “Electrical machines and apparatus, having individual functions, not specified or included elsewhere in this chapter; parts thereof: Other machines and apparatus: Other: Other: Other: Other,” which carries a general rate of duty of 2.6% ad valorem.