CIT Rules on Tariff Classification of Still and Moving Image Digital Cameras
The Court of International Trade weighed in on the classification of combination digital cameras and camcorders, finding on Dec. 23 that they are classifiable under the Harmonized Tariff Schedule’s provision for “digital still image video cameras.” CBP had said classification of digital cameras should be determined by whether the product’s principal function is for capturing still or moving images. But CIT found that CBP had misinterpreted the tariff schedule, and that digital cameras for either still or moving images, or combinations of both, belonged in the same subheading and enter duty free.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
Sony’s NSCGC1 “Net-Sharing” Camcorder is an electronic device that digitally records both still and moving images. It weighs about five ounces, has an LCD monitor display, a built-in microphone, and uses a rechargeable lithium ion battery. In 2007, Sony requested a customs ruling on the correct classification of the product, arguing it should be classified as a “digital still image video camera” under HTS subheading 8525.80.40, which is duty free. CBP responded in August 2007 with HQ ruling H012688 (here), finding the camcorder should instead be classified as “Television cameras, digital cameras and video camera recorders: Other” under subheading 8525.80.50, which is dutiable at 2.1%. Sony than imported the merchandise in November 2007, protested CBP’s classification, and filed suit at CIT.
The dispute hinged on the interpretation of the word “video.” CBP said “digital still image video cameras” only include single-function still image cameras. The word “video” in the subheading referred to the electronic capture of the images (rather than film), said CBP. Cameras for recording moving images are classifiable in the “other” provision. For multifunction cameras, the principal function governs whether they should be classified as still or moving image cameras, said CBP. Because the principal function of Sony’s camera is to record moving images, it should be classified under subheading 8525.80.50 along with “other” digital cameras.
Part of CBP’s argument was that “digital still image video cameras” was a term of art for cameras that use “video technology” to capture and reproduce still images. In the 1980s, before the advent of computers that could process, store and display still images at an affordable price, devices called “video camera recorders” captured still images and would transmit them to a television as an analog broadcast video signal for viewing. Congress added the current form of the subheading for “digital still image video cameras” to the HTS in 1997.
Sony countered that the subheading for “digital still image video cameras” is instead intended to cover digital cameras that can take both still and moving images. For Sony, the word “video” meant “moving images.” To interpret “video” to mean electronic, as CBP had done, would render the word “digital” redundant, said Sony.
In his opinion, CIT Judge Richard Eaton noted that CBP’s policy on the classification of digital cameras shifted markedly over the years. In the years before CBP’s ruling on the Sony camcorder, it had “regularly” classified digital cameras for both still and moving images as “digital still image video cameras” under subheading 8525.80.40, said the court. “If anything, prior to importation at issue in this litigation,” Customs could most consistently have been said to interpret 8525.80.40 as covering any article that would be identified as a “digital camera” regardless of whether the camera could capture both still and moving images,” said Eaton.
Turning to the definition of “video,” CIT ruled in favor of Sony, finding that “video” refers to moving images and not the electronic format. The “video camera recorders” from the 1980s were already long gone by the time Congress created the subheading for “digital still image video cameras” in 1997, said CIT. And dictionary definitions from the 1990s invariably define video as referring to moving pictures, it said. As such, Congress intended the subheading to cover both still and moving image cameras, as well as combinations of both, said the court.
Furthermore, the explanatory notes “consistently” use the word “video” to mean a moving image. And use of the word “video” to distinguish electronic formats from film would render meaningless notes in the tariff schedule that require classification of digital cameras in chapter 85, and film cameras in chapter 90.
Sony’s NSCGC1 camcorder is a “digital still image video camera,” found the court, and is correctly classified under subheading 8525.80.40, the court ruled.
(Sony Electronics v. U.S., Slip Op. 13-153, dated 12/23/13, Judge Eaton)
(Jack Mlawski of Galvin & Mlawski for plaintiff Sony Electronics, Inc.; Amy Rubin for defendant U.S. government)