HQ 951443: Component Parts for Laptop Computers; Motherboard; BIOS ROM; CPU; GRI 2(a); Note 5(A)(a), Chapter 84; HQ 950762; HQ 950221; Essential Character; Explanatory Notes (V) and (VIII), GRI 2(a); Unassembled Digital Processing Unit

Native CBP ruling rendition. Applicability is fact-specific; modification/revocation relationships and original publisher date are retained. Publisher sentinel year0001 means unknown date, not a historical legal adoption.

                            HQ 951443
                         April 13, 1992


CLA-2 CO:R:C:M 951443 DWS

CATEGORY: Classification

TARIFF NO.: 8471.20.00

District Director
U.S. Customs Service
Room 2017
300 South Ferry Street
Terminal Island
San Pedro, CA 90731

RE: Component Parts for Laptop Computers; Motherboard; BIOS ROM;
    CPU; GRI 2(a); Note 5(A)(a), Chapter 84; HQ 950762; 
    HQ 950221; Essential Character; Explanatory Notes (V) and    
    (VIII), GRI 2(a); Unassembled Digital Processing Unit     

Dear Sir:

     This is our response to electronic Customs Form 6431, dated
March 20, 1992, relating to an entry of component parts for a
lap-top computer, imported by Texas Instruments, Inc.  The matter
was referred to this office for response by the National Import
Specialist.

FACTS:

     The subject merchandise consists of various component parts
for lap-top computers.  According to counsel for the importer,
one lap-top computer contains 414 parts, of which 142 are
imported.  Among the 142 parts imported are the motherboard, the
CPU (central processing unit) chip, ROMs (read only memory), the
cabinet, the power supply, the display screen, the keyboard, the
display controller, and SRAM chips (static random access memory). 
Among the remaining 272 parts added in the United States are the
BIOS ROM (basic input output system read only memory) chip, the
hard disk drive, the video memory components, and  TTL
(transistor logic) ICs (integrated circuit). 

     It should be noted that the BIOS ROM chip is mounted on a
separate board.  That board is then mated to the motherboard
after the motherboard's importation into the United States.

     It appears that the Los Angeles port, based upon information
it was given, believed that the parts were divided into kits,
such that 51 kits of imported parts can build 51 laptop
computers.  Only after meetings between counsel for the importer
and the National Import Specialist was it learned that the
imported components are shipped for inventory purposes.  When the
imported parts are received, they "are removed from any groupings
in which they may have been shipped and placed in inventory by
part number along with other like numbered parts."

ISSUE:

     Whether, for classification purposes, the subject shipment
of parts has the essential character of a finished digital
processing unit?  

LAW AND ANALYSIS:

     Classification of merchandise under the HTSUS is in
accordance with the General Rules of Interpretation (GRI's),
taken in order.  GRI 1 provides that classification is determined
according to the terms of the headings and any relative section
or chapter notes.

     It is claimed that the subject shipment of component parts
has the essential character of a digital processing unit, and,
therefore, is classifiable under subheading 8471.20.00,
Harmonized Tariff Schedule of the United States (HTSUS), which
provides for: "[d]igital automatic data processing machines,
containing in the same housing at least a central processing unit
and an input and output unit, whether or not combined."

     The definitions for "motherboard" and "BIOS ROM" can be
found in The Computer Glossary, Fourth Edition.  The term
"motherboard" is defined as:

     the main printed circuit board in an electronic device which
     contains sockets that accept additional printed circuit
     boards.  In a personal computer, the motherboard contains   
     the bus, the microprocessor and all the chips used for 
     controlling the peripherals that are considered standard
     with the system, such as the keyboard, text and graphics    
     display, serial and parallel ports and joystick and mouse
     interfaces.

     The term "BIOS ROM" is defined as:

     the part of an operating system that contains the machine
     instructions necessary to activate the peripheral devices.
     The ROM indicates that it is permanently stored in a read   
     only memory chip.

     By definition, then, the motherboard contains all the
devices necessary for controlling the peripherals with the
system.  The BIOS ROM is responsible for activating the
peripheral devices.  Therefore, the BIOS ROM is essential to the
operation of the motherboard.

     Note 5(A)(a), chapter 84, HTSUS, states that:

     (A) For purposes of heading 8471, the expression "automatic
         data processing machines" means:

     (a) Digital machines, capable of (1) storing the processing
         program or programs and at least the data immediately
         necessary for execution of the program; (2) being freely
         programmed in accordance with the requirements of the
         user; (3) performing arithmetical computations specified
         by the user; and, (4) executing, without human 
         intervention, a processing program which requires them  
         to modify their execution, by logical decision during   
         the processing run.

     In HQ 950672, dated February 20, 1992, a CPU motherboard
with an 80286 microprocessor, two 64k EPROMS, and a direct memory
access controller was classified as a finished digital processing
unit under heading 8471, HTSUS.  In the ruling, it was stated
that "[t]he subject CPU board satisfies this description [note
5(A)(a), chapter 84, HTSUS] of an ADP machine.  The 80286
microprocessor and EPROMS enable the board to perform these
functions."

     Unlike the motherboard in HQ 950672, the subject motherboard
does not contain the BIOS ROM chip.  Therefore it cannot perform
the functions described in note 5(A)(a), chapter 84, HTSUS.  The
lack of the BIOS ROM chip prevents the motherboard from
performing input/output functions with the keyboard.  Logic and
control functions cannot be performed.  Also, the processing
program cannot be executed without human intervention.

     GRI 2(a) provides that:

     [a]ny reference in a heading to an article shall be taken to
     include a reference to that article incomplete or          
     unfinished, provided that, as entered, the incomplete or    
     unfinished article has the essential character of the 
     complete or finished article.  It shall also include a 
     reference to that article complete or finished (or falling
     to be classified as complete or finished by virtue of this 
     rule) entered unassembled or disassembled.

     In HQ 950221, dated November 22, 1991, it was ruled that a
motherboard, imported without a CPU unit, did not have the
essential character of a finished ADP processing unit.  Because
the subject motherboard does not contain the BIOS ROM chip,
essential to its operation, it does not impart the essential
character of a finished digital processing unit under GRI 2(a).

     Therefore, under GRI 2(a), the subject component parts do
not impart the essential character of a digital processing unit. 
The BIOS ROM, essential to the operation of the motherboard and
the computer, is not included with the motherboard, precluding
the motherboard from classification as a finished digital
processing unit.

     Even if we ruled that the component parts impart the
essential character of finished digital processing units, they
still would be precluded from classification under subheading
8471.20.00, HTSUS, because they are not "unassembled" digital
processing units as described in GRI 2(a). 

     In understanding the language of the HTSUS, the Harmonized
Commodity Description and Coding System Explanatory Notes may be
utilized.  The Explanatory Notes, although not dispositive, are
to be used to determine the proper interpretation of the HTSUS. 
54 Fed. Reg. 35127, 35128 (August 23, 1989).  Explanatory Notes
(V) and (VII), GRI 2(a) (p. 2), HTSUS, states that:

     (V)   The second part of Rule 2(a) provides that complete or
           finished articles presented unassembled or           
           disassembled are to be classified in the same heading 
           as the assembled article.  When goods are so          
           presented, it is usually for reasons such as          
           requirements or convenience of packing, handling or   
           transport.

     (VII) For the purposes of this Rule, "articles presented
           unassembled or disassembled" means articles the 
           components of which are to be assembled either by
           means of simple fixing devices (screws, nuts, bolts,
           etc.) or by riveting or welding, for example, provided
           only simple assembly operations are involved.

     First, the subject component parts, as noted, were not
shipped unassembled for convenience of packing, handling, or
transport, but as inventory for a manufacturing operation. 
Second, the creation of the computers in the United States is not
a simple assembly operation.  Complex operations are performed in
the United States after importation, such as surface-mount
processing, wave soldering, baking of the integrated circuits,
screen printing, and bar coding.

     Therefore, under the Explanatory Notes to GRI 2(a), the
component parts are clearly not unassembled digital processing
units for classification purposes.

HOLDING:

     Under GRI 2(a), the subject shipment of component parts does
not impart the essential character of a finished digital
processing unit.  Therefore, the component parts are not
classifiable under subheading 8471.20.00, HTSUS. Each part is
classifiable in its respective eo nomine heading.

                           Sincerely,



                           John Durant, Director
                           Commercial Rulings Division           

cc: Michael Mitchell
    Chief, Customs Information Exchange