26 Allston Street, Unit 2
Mount Pearl, NL A1N 0A4
Date of issuance of ruling: November 17, 2015
This is in response to a request submitted on your behalf by Avalon Customs Brokers for an advance ruling on the tariff classification of UHD-III ROV System. This product is exported from Schilling Robotics, David, California, USA.
|Effective Date:||November 17, 2015|
The UHD-III ROV (remotely operated vehicle) is an unmanned, highly maneuverable underwater vehicle piloted from the surface and used to perform various tasks on underwater structures. It is designed as a highly stable, powerful work platform, able to undertake the heaviest deep water intervention tasks in oil and gas developments worldwide. The dimensions of this product are 3.5m x 1.9m x 2.1m. It comes with 2 x electric pan & tilt, 4 x cameras, 12 x lights, 1 x heading/pitch & roll sensor, 1 x TITAN 4 manipulator, 1x rig Master manipulator, 1 x 8 functions manifold, 1 x tooling manifold, 1 x depth transducer, 3 x nodes c/w modules, 1 x sonar, 1 x emergency location equipment, 1 x doppler velocity log, 1 x auxiliary tooling system (8cylinders), 2 x 8 liters compensators, 2 x 2.2 liters compensators and 3 x 8 liters reservoirs.
Analysis and Justification
The UHD-III ROV system is a machine or mechanical appliance. It has multiple mechanical parts, each with a specific function, that interact, and as a whole are used by the operators to descend to depths, maneuver to destinations, visualize the environment and perform, through specialized tools, the necessary operations in order to accomplish the assigned tasks on underwater structures.
Explanatory Notes B), Heading 84.79 states: "Mechanical devices which cannot perform their function unless they are mounted on another machine or appliance, or are incorporated in a more complex entity, provided that this function: (i) is distinct from that which is performed by the machine or appliance whereon they are to be mounted, or by the entity wherein they are to be incorporated, and (ii) does not play an integral and inseparable part in the operation of such machine, appliance or entity." This product, UHD-III meets this definition.
The Canadian International Trade Tribunal, in appeal AP-2012-017 for a similar product, stated the following: "The Tribunal finds that the documentary evidence and the testimony clearly establish that the integrated ROV system is a machine or mechanical appliance. The system is an assemblage of multiple mechanical parts, each with a specific function, that interact, and as a whole are used by the operators to descend to depths, swim to immediate destinations, visualize their environment and perform, through specialized tools, the necessary operations in order to accomplish the assigned tasks on underwater structures. Accordingly, the ROV system is a complex assembly of moving parts, which are able to perform work. In addition, whether it is through the thrusters, which provide motion, or through special attachments, such as arms and tools which move about to accomplish their individual tasks, the goods in issue produce or transmit force and motion." Turning to the question of whether the goods in issue are parts of a machine or mechanical appliance having individual functions, the Tribunal notes that the explanatory notes to heading number 84.79 provide further detail as to what constitutes individual functions.
Nevertheless, the ROV system can be said to have a function that is distinct from that of the ship or rig upon which it is mounted and which is individual to the ROV system. Specifically, the main function of the ROV system is distinguishable from the purpose of a ship or rig, which is usually to navigate or to exploit petroleum deposits, respectively. In addition, ROV systems do not play an integral or inseparable part in the operation of a ship or rig. While the role of an ROV system can be complementary to the functioning of a ship or rig, their roles remain independent from each other; a ship is able to navigate and a rig is able to exploit petroleum deposits without the goods in issue. Finally, turning to the third requirement for classification in heading number 84.79, the Tribunal is satisfied that ROV systems are not more specifically described elsewhere in Chapter 84.
For the foregoing reasons, the Tribunal concludes that the goods in issue are properly classified under tariff item number 8422.214.171.124.
Section 10 of the Customs Tariff directs that classification of imported goods shall be determined in accordance with the General Rules for the Interpretation of the Harmonized System. Section 11 of the Customs Tariff states that in interpreting the headings and subheadings, regard shall be had to the World Customs Organization's (WCO) Explanatory Notes to the Harmonized Commodity Description and Coding System.
General Interpretative Rule 1 (GIR 1) directs that titles of Sections, Chapters and sub- Chapters are provided for ease of reference only. For legal purposes, classification shall be determined according to the terms of the heading and any relative Section and Chapter Notes. Similarly, General Interpretative Rule 6 (GIR 6) directs that classification shall be determined according to the terms of those subheadings and any related Subheading Notes.
The UHD-III ROV (remote operated vehicle) is classified under 84126.96.36.199, by application of GIRs 1 and 6.
This ruling has been issued under paragraph 43.1(1)(c) of the Customs Act and will be honoured by the Canada Border Services Agency (CBSA) for future importations of the goods specified, provided the material facts and circumstances remain as originally presented; all conditions in the ruling have been met; the ruling has not been modified, revoked, revised, or cancelled; and the Customs Tariff legislation has not changed. Should there be a change in the material facts or circumstances pertaining to the goods, you must notify the CBSA as soon as possible. You may request that the advance ruling be modified or revoked as of the date of the change.
Importers should quote the advance ruling number at the time of importation in either the description field of the B3 entry document or on the Canada Customs Invoice. Exporters or producers should quote the advance ruling number on the Certificate of Origin or commercial invoice accompanying the goods.
Should you disagree with this advance ruling, you may file a dispute notice under subsection 60(2) of the Customs Act within 90 days of the date of issuance. Please see the procedures outlined in Appendix C of the CBSA's Memorandum D11-11-3, Advance Rulings for Tariff Classification.
This advance ruling is considered 'reason to believe' for the purposes of section 32.2 of the Customs Act and the CBSA's Administrative Monetary Penalty System, described in Memorandum D22-1-1.
All Memoranda referenced in this letter may be accessed on the CBSA website.
Consent to the Public Release of the Advance Ruling
As per your consent statement, we will release this advance ruling to the public, in both official languages, in accordance with the procedures described in Memorandum D11-11-3. The ruling will be published on the CBSA website in 30 days.
Manager, Tariff Policy Unit 'B'
Trade Policy Division
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