Fiber Optic Network Modules Classifiable in HTS Chapter 90 as Optical Equipment, CIT Says
Fiber optic telecommunications network equipment is classifiable as optical instruments of chapter 90 of the Harmonized Tariff Schedule of the United States (HTSUS), the Court of International Trade said in an Oct. 18 decision. ADC Telecommunications argued CBP should have classified its “value added modules” as data transmission equipment in a duty fee provision of heading 8517. But CIT held that optical equipment includes fiber optic cables that transmit non-visible light, confirming CBP’s liquidation as “other optical appliances and instruments” in heading 9013.
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The value added modules at issue in the case included splitter modules, monitor modules and wavelength division multiplexer modules, with features such as connectors and jacketing to make it easier for telecommunications providers to incorporate the modules into their networks. Among other things, ADC argued that the modules, which operate using invisible infrared light, can’t be classified as optical instruments, which are meant to enhance human vision.
According to CIT, it would make no sense for chapter 90 to include heading 9001, which covers optical fibers, but not bundles of optical fibers, even if they transmit infrared light. “The authors made the express addition of heading 9001, HTSUS, thereby making plain their awareness of the ‘optical’ properties of fiber optics in ‘light’ transmission -- including that which is beyond the visible spectrum,” CIT said. And the explanatory notes to chapter 90 references not only visible light in its definition of “optical elements,” but also ultraviolet and infrared light, CIT said.
On the other hand, U.S. note 1(m) to chapter 85 excludes goods of chapter 90. That means ADC’s value added modules, classifiable in chapter 90, cannot be classified in chapter 85, which “addresses the antecedent fixed-line data transmission technology of fiber optics (i.e., via copper line) and otherwise gives no indication that optical fiber technology should be included.” As appliances or instruments “with no purpose but to channel and direct information through fiber optic cables, and which is not the fibers themselves,” ADC’s value added modules are classifiable in subheading 9013.80.90 as “other optical appliances and instruments,” dutiable at 4.5%, CIT said.
(ADC Telecommunications, Inc. v. U.S., Slip Op. 17-144, CIT # 13-00400, dated 10/18/17, Judge Musgrave)
(Attorneys: Michael Roll of Pisani & Roll for plaintiff ADC Telecommunications; Guy Eddon for defendant U.S. government)