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Telematics Module Is a 'Measuring Instrument,' CBP HQ Rules in Reconsideration Request

An automotive telematics device is properly classified as a "measuring or checking instrument" under Harmonized Tariff Schedule heading 9031 and not as a "telephone" under heading 8517, according to a recent ruling by CBP headquarters.

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The device is installed in a vehicle’s engine diagnostics port and is used to collect, analyze and transmit data about the vehicle to a server via the global cellular network. The key components of the unit include an accelerometer/gyroscope, a GPS device, a code reader and a cellular modem/transceiver. The accelerometer/gyroscope detects gravitational force to collect data on braking, acceleration and cornering. The GPS collects vehicle location data. The reader function is used to pull data from the car’s computer and sensors. The cellular modem/transceiver then processes and transmits collected data to servers wirelessly.

The ruling came in response to a request for reconsideration by DanLaw, arguing for classification under heading 8517 as “telephone sets, including telephones for cellular networks or for other wireless networks." The company argued that a ruling previously issued by CBP, HQ H323185, was based on an incorrect assessment of the subject merchandise and the roles of its parts. DanLaw claimed that the product is a data transmission device and that it does not perform analytics. The description in HQ H323185 that the device “used to collect, analyze and transmit data,” was partially incorrect, DanLaw argued.

CBP said that DanLaw's argument represented "a fundamental misreading of HQ H323185." CBP said that it applied Note 3 to Section XVI and Note 3 to Chapter 90 because the subject merchandise is a composite machine and is properly classified according to its principal function. CBP said that the item does feature a cellular modem or transceiver that would likely be classified under heading 8517 on its own. However, heading 8517 doesn't cover any device that also features a GPS component and an accelerometer/gyroscope, CBP said.

In the ruling under review, the agency said it correctly noted that the principal function of the entire device wasn't that of data transmission because the GPS and accelerometer/gyroscope components performed functions of equal importance to that of transmitting the collected data.

DanLaw's secondary argument that HQ H323185 had the effect of revoking or modifying CBP’s treatment of the item was unconvincing to CBP. DanLaw referenced several prior protests, which CBP had granted, that allowed the item to be classified under heading 8517. CBP said that the granted protests didn't amount to “treatment” under CBP regulations, and that another HQ ruling in November 2021 revoked or modified any treatment previously accorded by CBP anyway.