WEBVTT 00:00:04.255 --> 00:00:05.505 MOOSBRUGGER, KARL Good afternoon, everyone. 00:00:07.767 --> 00:00:09.160 MOOSBRUGGER, KARL My name is Carl Moosbrugger. 00:00:09.160 --> 00:00:10.140 I'm NIS 220. 00:00:10.140 --> 00:00:13.190 MOOSBRUGGER, KARL And I just wanted to thank everyone 00:00:13.190 --> 00:00:15.850 for taking the time out of your busy schedules 00:00:15.850 --> 00:00:18.090 to attend this presentation today. 00:00:18.159 --> 00:00:21.969 Our goal is that you will come away with a better understanding. 00:00:48.805 --> 00:00:50.565 MOOSBRUGGER, KARL Before we get started, 00:00:50.565 --> 00:00:52.900 we have some general housekeeping slides to go over. 00:00:52.900 --> 00:00:55.167 Our intent for this webinar. 00:00:55.167 --> 00:00:56.833 As I said before, is to discuss. 00:09:39.515 --> 00:09:41.595 MOOSBRUGGER, KARL Some terminology really quick, 00:09:41.595 --> 00:09:45.567 there are many more types of cryptocurrency other than Bitcoin, 00:09:45.567 --> 00:09:48.567 and but most cryptocurrencies are called. 00:09:48.567 --> 00:09:53.100 MOOSBRUGGER, KARL Coins, if they're not Bitcoin, they're called alt coins. 00:09:54.033 --> 00:09:56.967 MOOSBRUGGER, KARL We'll go over 80P in greater detail 00:09:56.967 --> 00:09:59.233 later on the presentation or throughout the presentation, 00:09:59.233 --> 00:10:04.367 but the legal provisions for ADP are found in Chapter 84, Note 6. 00:10:04.367 --> 00:10:07.233 MOOSBRUGGER, KARL But the presentation when we say ADP, 00:10:07.233 --> 00:10:10.633 we are referring to Automatic Data Processing machines. 00:10:10.633 --> 00:10:15.900 The term computer is just too vague and it could refer to a machine 00:10:15.900 --> 00:10:16.833 that computes. 00:10:16.833 --> 00:10:19.767 MOOSBRUGGER, KARL But it may not satisfy node 6. 00:10:22.300 --> 00:10:25.100 MOOSBRUGGER, KARL An application specific integrated circuit 00:10:25.100 --> 00:10:28.567 is a semiconductor component that is soldered onto a printed circuit board. 00:10:28.567 --> 00:10:34.500 The ASIC, as they're called, is designed to perform a specific function, 00:10:34.500 --> 00:10:38.700 whereas the FPGA or field programmable gate array gets 00:10:38.700 --> 00:10:42.233 its specific functionality through programming. 00:10:42.233 --> 00:10:46.100 MOOSBRUGGER, KARL We'll discuss ASICS and FPGA's 00:10:46.100 --> 00:10:47.767 and greeted detail throughout the presentation. 00:10:49.567 --> 00:10:52.500 MOOSBRUGGER, KARL A GPU is a graphics processing 00:10:52.500 --> 00:10:56.500 printed circuit board assembly that can be used to perform mining functions. 00:10:56.500 --> 00:10:58.700 These are relatively common boards. 00:10:58.700 --> 00:11:02.633 MOOSBRUGGER, KARL That are frequently used in gaining personal computers. 00:11:02.633 --> 00:11:05.233 If you play video games at home, you probably have a GPU 00:11:05.233 --> 00:11:06.500 in your personal computer. 00:11:07.967 --> 00:11:11.700 MOOSBRUGGER, KARL The hash rate is a special is a specification 00:11:11.700 --> 00:11:14.900 of the number of guests that are performed per second. 00:11:14.900 --> 00:11:16.833 MOOSBRUGGER, KARL So. 00:11:16.833 --> 00:11:19.767 MOOSBRUGGER, KARL 1,000,000 hashes is how good that machine works. 00:11:19.767 --> 00:11:23.967 We discussed mining already, but in general crypto mining is how new units 00:11:23.967 --> 00:11:25.500 of cryptocurrency. 00:11:25.500 --> 00:11:28.367 MOOSBRUGGER, KARL Which we set are called coins are created. 00:11:31.567 --> 00:11:35.100 MOOSBRUGGER, KARL Although a personal computer is used to configure 00:11:35.100 --> 00:11:37.167 and manage the mining pools. 00:11:37.167 --> 00:11:40.167 MOOSBRUGGER, KARL For a particular cryptocurrency, 00:11:40.167 --> 00:11:43.367 the personal computers themselves are not typically used 00:11:43.367 --> 00:11:46.833 to mine cryptocurrency any longer, simply because they can't generate 00:11:46.833 --> 00:11:49.900 enough hash calculations to be profitable. 00:11:49.900 --> 00:11:53.233 MOOSBRUGGER, KARL A personal computer simply doesn't have 00:11:53.233 --> 00:11:56.167 the processing power to keep up with mining technologies. 00:11:56.167 --> 00:11:59.433 MOOSBRUGGER, KARL For example, under the current level of mining, 00:11:59.433 --> 00:12:00.833 difficulty for a Bitcoin. 00:12:00.833 --> 00:12:02.633 MOOSBRUGGER, KARL Even the fastest personal computer 00:12:02.633 --> 00:12:06.367 would likely take millions of years to mine one single Bitcoin. 00:12:08.833 --> 00:12:12.133 MOOSBRUGGER, KARL Another type of mining hardware is the GPU. 00:12:12.133 --> 00:12:16.067 These are graphics boards, as we said earlier. 00:12:16.067 --> 00:12:19.330 MOOSBRUGGER, KARL They've been repurposed to do crypto mining, 00:12:19.330 --> 00:12:22.353 so while they're made and they're generally dedicated 00:12:22.376 --> 00:12:23.663 to be graphics boards. 00:12:24.767 --> 00:12:26.592 MOOSBRUGGER, KARL Specialized software was written 00:12:26.593 --> 00:12:29.153 to harness their processing power to do mining functions. 00:12:32.080 --> 00:12:36.010 MOOSBRUGGER, KARL GPU mining is much faster than the personal computer, 00:12:36.010 --> 00:12:39.849 and some cryptocurrencies are actually designed to work better from a GPU 00:12:39.859 --> 00:12:43.609 than other mining technologies like Ethereum, for example. 00:12:43.610 --> 00:12:46.830 MOOSBRUGGER, KARL And because there are many preexisting graphics boards 00:12:46.830 --> 00:12:48.310 already in the market. 00:12:48.310 --> 00:12:51.340 MOOSBRUGGER, KARL Mining with GPU's became very popular 00:12:51.340 --> 00:12:52.590 and still is to some extent. 00:12:56.230 --> 00:13:00.700 MOOSBRUGGER, KARL GPU's are pretty good at calculating the hash algorithms 00:13:00.700 --> 00:13:04.220 and can be combined with multiple GPUs into a single machine 00:13:04.220 --> 00:13:05.850 that is commonly referred to as a rig. 00:13:08.100 --> 00:13:09.990 MOOSBRUGGER, KARL And because there are hundreds of different types 00:13:09.990 --> 00:13:12.830 of currencies in existence, some are better suited by GPU. 00:13:14.100 --> 00:13:16.660 MOOSBRUGGER, KARL And the market has evolved in such a way 00:13:16.660 --> 00:13:21.070 that there are now GPU boards that have been specifically designed for use 00:13:21.070 --> 00:13:22.900 with mining cryptocurrencies. 00:13:24.315 --> 00:13:25.940 MOOSBRUGGER, KARL We would want to keep our eyes open. 00:13:27.233 --> 00:13:30.170 MOOSBRUGGER, KARL Specifically for these, as they could be considered 00:13:30.170 --> 00:13:33.990 having a dedicated use which would impact the turf classification. 00:13:36.900 --> 00:13:39.030 MOOSBRUGGER, KARL Field programmable gate arrays. 00:13:39.030 --> 00:13:44.490 MOOSBRUGGER, KARL Fpgas are microprocessors that can be programmed 00:13:44.490 --> 00:13:46.260 for a specific purpose. 00:13:46.260 --> 00:13:51.340 They can be used in manufacturing processes like a controller, 00:13:51.340 --> 00:13:56.160 or they can be programmed to control lights or operate sensors and pumps. 00:13:56.160 --> 00:13:57.970 All sorts of electrical machines. 00:13:57.970 --> 00:14:00.756 MOOSBRUGGER, KARL In the case of cryptocurrency mining, 00:14:00.757 --> 00:14:03.574 they are configured to perform hash calculations, 00:14:03.575 --> 00:14:05.490 and they could do it pretty well. 00:14:06.367 --> 00:14:09.620 MOOSBRUGGER, KARL But Fpgas have only a slight performance advantage 00:14:09.620 --> 00:14:10.930 over using a GPU. 00:14:11.833 --> 00:14:13.570 MOOSBRUGGER, KARL And they're much harder to come by, 00:14:13.570 --> 00:14:17.190 so the FPGA mining at the moment is not as popular 00:14:17.190 --> 00:14:18.680 as some of the other technologies. 00:14:20.433 --> 00:14:22.920 MOOSBRUGGER, KARL With the introduction of the ASIC miners, 00:14:22.920 --> 00:14:24.790 some mining operators. 00:14:24.790 --> 00:14:27.860 MOOSBRUGGER, KARL Compelled to make a move from FPGA's to basics. 00:14:27.860 --> 00:14:33.560 MOOSBRUGGER, KARL Nevertheless, FPGA mining is worth learning about 00:14:33.560 --> 00:14:35.530 and maybe become popular again. 00:14:35.530 --> 00:14:39.380 You were generation FPGA's are much faster and run leaner than those 00:14:39.380 --> 00:14:40.260 in the past. 00:14:40.260 --> 00:14:43.270 So we wanna keep our eyes out for their use. 00:14:43.270 --> 00:14:46.290 What's important to remember about Fpgas is that 00:14:46.290 --> 00:14:48.379 they are printed circuit board assemblies 00:14:48.380 --> 00:14:51.250 that are programmed to the type of currency that are mined. 00:14:56.429 --> 00:14:59.269 MOOSBRUGGER, KARL ASIC Mining is currently the fastest method 00:14:59.270 --> 00:15:00.650 of farming cryptocurrency. 00:15:01.890 --> 00:15:05.210 MOOSBRUGGER, KARL The mining rigs can be set up as a single unit. 00:15:05.210 --> 00:15:06.820 MOOSBRUGGER, KARL Or, as I'm sure you've heard, 00:15:06.820 --> 00:15:09.980 they can be grouped together to form mining farms. 00:15:09.980 --> 00:15:12.170 MOOSBRUGGER, KARL Which I have hundreds or even thousands 00:15:12.170 --> 00:15:13.820 of ASIC miners working together. 00:15:13.820 --> 00:15:18.300 MOOSBRUGGER, KARL The typical ASIC miner has the single controller board 00:15:18.300 --> 00:15:22.870 with an aluminum enclosure and one or more hash boards that I'll show you 00:15:22.870 --> 00:15:23.960 on the next slide. 00:15:23.960 --> 00:15:28.141 MOOSBRUGGER, KARL This unit pictured here requires a separate power supply 00:15:28.170 --> 00:15:29.880 that is attached to the individual hash boards. 00:15:30.820 --> 00:15:34.129 MOOSBRUGGER, KARL The ASIC miners have the largest known hash rates 00:15:34.130 --> 00:15:39.500 for the ones being imported today are capable of processing in the ballpark 00:15:39.500 --> 00:15:42.590 of 110 terahash per second. 00:15:46.967 --> 00:15:49.510 MOOSBRUGGER, KARL This slide shows a single hash board. 00:15:49.510 --> 00:15:51.280 You can see that it's printed circuit board assembly 00:15:51.280 --> 00:15:53.930 with many ASICS mounted to it. 00:15:53.930 --> 00:15:55.570 The three hash boards. 00:15:56.833 --> 00:16:00.930 MOOSBRUGGER, KARL Are connected to an onboard controller by a ribbon cable. 00:16:00.930 --> 00:16:04.720 During the Operation, A6 consume a lot of electricity and produce a lot 00:16:04.720 --> 00:16:09.190 of heat, and that's why there are heat sinks attached to top of each chip 00:16:09.190 --> 00:16:12.810 and the mining enclosure typically has dual fans to increase the air flow. 00:16:17.260 --> 00:16:19.270 MOOSBRUGGER, KARL So back in 2018. 00:16:20.425 --> 00:16:21.690 MOOSBRUGGER, KARL Did the first webinar 00:16:21.690 --> 00:16:25.270 on my name machines like I said before, there were no classification rulings 00:16:25.270 --> 00:16:26.130 for these devices yet. 00:16:27.900 --> 00:16:30.060 MOOSBRUGGER, KARL Since then, CBP has issued a number 00:16:31.633 --> 00:16:33.380 of joints where consideration was given to the mining machines 00:16:33.380 --> 00:16:37.770 being classifiable or possibly being classifiable under heading 8471 00:16:37.770 --> 00:16:38.500 as an 80P machine. 00:16:39.700 --> 00:16:43.010 MOOSBRUGGER, KARL CBP is consistently disagreed with this position, 00:16:43.010 --> 00:16:46.250 and it's what we're going to be focusing on for the rest of my portion 00:16:46.250 --> 00:16:46.770 of the webinar. 00:16:47.567 --> 00:16:50.200 MOOSBRUGGER, KARL Before we begin, I'd like to remind everyone 00:16:50.200 --> 00:16:53.050 that we don't take a piece of information for one ruling or a webinar. 00:16:53.068 --> 00:16:56.570 MOOSBRUGGER, KARL And apply it across the board 00:16:56.570 --> 00:16:59.830 to multiple unrelated machines that we think might be similar. 00:16:59.830 --> 00:17:01.470 You have to look at all the facts. 00:17:01.470 --> 00:17:04.880 You can't just look at the name or the type of technology use. 00:17:04.880 --> 00:17:09.580 MOOSBRUGGER, KARL When CBP issues the ruling for a particular product, 00:17:09.580 --> 00:17:12.440 it reviews the facts presented for that machine 00:17:12.440 --> 00:17:15.370 and the classification is determined based on those individual facts. 00:17:19.433 --> 00:17:22.850 MOOSBRUGGER, KARL Just a real quick look at the legal notes for Session 16. 00:17:22.850 --> 00:17:28.320 Note 2 instructions on how to classify parts of machines that are classifiable 00:17:28.320 --> 00:17:29.800 in chapters 84 and 85. 00:17:29.800 --> 00:17:32.630 MOOSBRUGGER, KARL It also lays the groundwork for 00:17:32.630 --> 00:17:34.100 how we classify those parts. 00:17:34.956 --> 00:17:38.110 MOOSBRUGGER, KARL Either in their own specific tariff number or as part 00:17:38.110 --> 00:17:40.230 of the machine that they are intended to be used with, 00:17:41.250 --> 00:17:45.730 node three is particularly relevant because we are instructed 00:17:45.730 --> 00:17:50.550 to identify a machines principal function and to classify according 00:17:50.550 --> 00:17:51.750 to that function. 00:17:51.750 --> 00:17:54.950 MOOSBRUGGER, KARL And then a four to section 16 talks about 00:17:54.950 --> 00:17:58.980 when a combination of machines that are intended to contribute together 00:17:58.980 --> 00:18:03.220 to a clearly defined function, you're instructed to classify according 00:18:03.220 --> 00:18:04.220 to that function. 00:18:08.050 --> 00:18:12.210 MOOSBRUGGER, KARL Moving on to the chapter notes, up until 2022, 00:18:12.217 --> 00:18:15.167 Chapter 84, Note 6 used to be Note 5. 00:18:16.189 --> 00:18:21.589 So if you go on into across or online and you are researching rulings 00:18:21.590 --> 00:18:25.850 that refer to a different note, remember that the tariff is a living document. 00:18:25.850 --> 00:18:28.820 MOOSBRUGGER, KARL That changes throughout the years. 00:18:28.820 --> 00:18:30.580 All, be it excruciatingly slow. 00:18:30.580 --> 00:18:31.840 Sometimes it does change. 00:18:33.688 --> 00:18:35.860 MOOSBRUGGER, KARL OK, so note 6 lays out the requirements 00:18:35.860 --> 00:18:39.050 for classification of merchandise under 8471. 00:18:39.050 --> 00:18:42.520 MOOSBRUGGER, KARL Node 6A is the ADP machine itself. 00:18:43.567 --> 00:18:47.480 MOOSBRUGGER, KARL 6B refers to 80P systems 00:18:47.480 --> 00:18:53.730 which were just gonna touch a little bit on note 6C talks about units of ADP. 00:18:53.730 --> 00:18:59.910 MOOSBRUGGER, KARL 6D are the exclusions to ADP and then note 6E. 00:19:01.500 --> 00:19:04.480 MOOSBRUGGER, KARL Are the specific function exclusions. 00:19:09.033 --> 00:19:11.840 MOOSBRUGGER, KARL As I said, no 6A covers the ADP machine itself. 00:19:11.840 --> 00:19:14.320 MOOSBRUGGER, KARL It list the four core requirements 00:19:14.349 --> 00:19:18.839 for classifying the central processing unit like a motherboard or a laptop 00:19:18.840 --> 00:19:23.460 or a personal computer or other type of ADP machine under heading 8471. 00:19:23.460 --> 00:19:27.760 MOOSBRUGGER, KARL The requirements to classify an 80P machine 00:19:27.760 --> 00:19:31.630 and heading 8471 requires that the machine must be able 00:19:31.630 --> 00:19:34.520 to store the program for its execution. 00:19:34.520 --> 00:19:38.280 It has to be freely programmable, it must perform computation specified 00:19:38.280 --> 00:19:41.702 by the user and it must run the processing program 00:19:41.703 --> 00:19:43.580 without human intervention. 00:19:43.580 --> 00:19:46.906 MOOSBRUGGER, KARL I mentioned laptops, desktops, tablets 00:19:46.907 --> 00:19:51.039 and similar devices, but technology moves fast much faster 00:19:51.040 --> 00:19:53.490 than turf is able to keep up with. 00:19:53.490 --> 00:19:56.250 MOOSBRUGGER, KARL So we're constantly being challenged with the concepts 00:19:56.250 --> 00:19:58.093 of what is or isn't an 80P machine, 00:19:58.094 --> 00:20:00.410 which is the reason for this presentation. 00:20:03.033 --> 00:20:06.000 MOOSBRUGGER, KARL Note 6B talks about ADP systems. 00:20:06.767 --> 00:20:09.730 MOOSBRUGGER, KARL Like I said, we're not really gonna discuss ADP systems 00:20:09.730 --> 00:20:10.220 much today. 00:20:12.567 --> 00:20:14.520 MOOSBRUGGER, KARL But the explanatory notes do spell out 00:20:14.520 --> 00:20:18.320 what comprises a system which is the processor. 00:20:18.320 --> 00:20:20.060 MOOSBRUGGER, KARL An input unit in an output unit. 00:20:25.100 --> 00:20:25.700 MOOSBRUGGER, KARL Chapter 8 four. 00:20:25.700 --> 00:20:27.410 Note 6C. 00:20:27.410 --> 00:20:31.680 MOOSBRUGGER, KARL Starts out with subject to the exclusions of note D&E. 00:20:31.680 --> 00:20:36.350 Note 6 E governs units of ADP, so to be considered a unit of ADP, 00:20:36.350 --> 00:20:40.950 the machine must be principally used, and an ADP system, 00:20:40.950 --> 00:20:45.970 it must connect to the CPU either directly or through another unit, 00:20:45.970 --> 00:20:50.610 and it must give or receive data that is used by the system. 00:20:50.610 --> 00:20:54.820 MOOSBRUGGER, KARL Note 5C formalizes the term units, 00:20:54.820 --> 00:20:58.580 so whenever you're discussing Automatic Data Processing 00:20:58.580 --> 00:21:01.600 when the term unit is used, it means ADP unit. 00:21:03.633 --> 00:21:06.860 MOOSBRUGGER, KARL ADT units are not the same as ADP machines. 00:21:06.860 --> 00:21:09.820 MOOSBRUGGER, KARL Rather, they're the devices that connect to 00:21:09.820 --> 00:21:12.570 and work with the ADP machines. 00:21:12.570 --> 00:21:16.210 For example, a computer keyboard isn't ADP input unit. 00:21:16.210 --> 00:21:19.200 MOOSBRUGGER, KARL A USB hub is an input unit. 00:21:22.167 --> 00:21:24.770 MOOSBRUGGER, KARL But if you exceptions, note 6C requires 00:21:24.770 --> 00:21:27.570 that all units must fulfill the three bullets listed here. 00:21:29.233 --> 00:21:32.000 MOOSBRUGGER, KARL An important point to make is that the ability 00:21:32.007 --> 00:21:35.440 to be used in an 80P system does not necessarily mean 00:21:35.440 --> 00:21:39.650 that the item is classifiable in the ADP unit provisions. 00:21:39.650 --> 00:21:40.970 So let's talk about exclusions. 00:21:40.970 --> 00:21:43.410 It does say right here subjects to note. 00:21:43.410 --> 00:21:46.680 MOOSBRUGGER, KARL I'm sorry, subject to paragraph DNE. 00:21:49.767 --> 00:21:53.620 MOOSBRUGGER, KARL Note 6D in general says telecommunications equipment, 00:21:53.620 --> 00:21:56.760 cameras, microphones, printers, and other machines. 00:21:56.760 --> 00:21:59.930 There's a list of them that say they're not allowed to be classified ad for 71. 00:21:59.930 --> 00:22:05.060 So I'm not going to have that slide, but chapter 84 note 6E. 00:22:05.833 --> 00:22:08.730 MOOSBRUGGER, KARL Says this machines incorporating or working 00:22:08.730 --> 00:22:11.690 in conjunction with an Automatic Data Processing machine 00:22:11.690 --> 00:22:16.230 and performing a specific function other than data processing 00:22:16.230 --> 00:22:19.910 or to be classified and their headings and the headings appropriate 00:22:19.910 --> 00:22:21.130 to their respective functions. 00:22:21.145 --> 00:22:22.955 Or failing that, in residual headings. 00:22:25.929 --> 00:22:28.464 MOOSBRUGGER, KARL This is especially relevant to the classification 00:22:28.464 --> 00:22:32.408 of mining hardware because in some fashion mining machine. 00:22:32.408 --> 00:22:35.693 MOOSBRUGGER, KARL Work in conjunction with an AP machine, 00:22:35.693 --> 00:22:38.900 and they may even incorporate an AP machine. 00:22:38.900 --> 00:22:42.400 MOOSBRUGGER, KARL But they have a dedicated function of mining 00:22:42.400 --> 00:22:46.253 and it's not data processing and they would be subject to note 60. 00:22:46.253 --> 00:22:48.033 MOOSBRUGGER, KARL For example. 00:25:23.167 --> 00:25:26.058 MOOSBRUGGER, KARL The mini USB C is what we call a single board computer. 00:25:27.124 --> 00:25:31.999 MOOSBRUGGER, KARL And all in one PC should be pretty familiar to everyone. 00:25:32.000 --> 00:25:33.970 MOOSBRUGGER, KARL Each of these machines have the capability 00:25:33.970 --> 00:25:38.990 to perform some type of mining function, but the main or the principal function 00:25:38.990 --> 00:25:44.400 of the 80 ADP machine is general purpose computing through the use 00:25:44.400 --> 00:25:46.350 of a variety of programs. 00:25:46.350 --> 00:25:50.910 So these computers would not be dedicated to performing mining hashes. 00:25:55.633 --> 00:25:57.430 MOOSBRUGGER, KARL And of course, another consideration is 00:25:57.430 --> 00:25:59.120 how the products are marketed. 00:25:59.120 --> 00:26:02.760 MOOSBRUGGER, KARL Are they solely dedicated for use in mining? 00:26:02.760 --> 00:26:05.940 Is there an economic practicality of the important being used 00:26:05.940 --> 00:26:07.380 for a particular purpose? 00:26:07.380 --> 00:26:09.980 MOOSBRUGGER, KARL These are all the characteristics 00:26:09.980 --> 00:26:12.790 that must be considered along with the physical characteristics 00:26:12.790 --> 00:26:16.560 of the merchandise, the expectations of the ultimate purchaser, 00:26:16.560 --> 00:26:19.460 environment of sale, the use of a similar machine 00:26:19.460 --> 00:26:23.260 that defines the class of merchandise, economic practicality 00:26:23.260 --> 00:26:25.290 or recognition in the trade of its use. 00:26:30.767 --> 00:26:33.370 MOOSBRUGGER, KARL Here we have the personal computer on the left, 00:26:33.370 --> 00:26:35.570 which is an ADP machine. 00:26:35.570 --> 00:26:36.620 It's freely programmable. 00:26:36.620 --> 00:26:40.850 There are no hardware or software limitations imposed on the user. 00:26:40.850 --> 00:26:43.156 It has standard hardware and an operating system that. 00:26:44.900 --> 00:26:46.429 MOOSBRUGGER, KARL Like can be changed. 00:26:46.966 --> 00:26:50.109 MOOSBRUGGER, KARL It satisfies note 6A and is commercially recognized 00:26:50.110 --> 00:26:53.010 as a PC and function cost etcetera. 00:26:53.010 --> 00:26:56.290 MOOSBRUGGER, KARL On the right, however, we have a motherboard 00:26:56.290 --> 00:26:59.800 with 12 PCI E slots that can accommodate 12 GPU. 00:26:59.800 --> 00:27:02.200 MOOSBRUGGER, KARL Worst picture? 00:27:02.200 --> 00:27:06.250 MOOSBRUGGER, KARL USB riser boards for expanding the mining hardware 00:27:06.250 --> 00:27:08.280 to a single motherboard. 00:27:08.280 --> 00:27:10.700 The crypto mining motherboard especialized. 00:27:10.700 --> 00:27:11.900 It's marketed that way. 00:27:11.900 --> 00:27:14.140 It's priced that way and it's used as a money machine. 00:27:14.140 --> 00:27:17.718 MOOSBRUGGER, KARL Where the motherboard merely acts 00:27:17.719 --> 00:27:21.130 as the controller or the connection point running the mining software. 00:27:21.130 --> 00:27:24.690 MOOSBRUGGER, KARL In this example, it doesn't matter 00:27:24.690 --> 00:27:29.980 that the crypto minor could be used as an ADP machine section. 00:27:29.980 --> 00:27:33.610 MOOSBRUGGER, KARL Note 3 requires us to classify machines according 00:27:33.610 --> 00:27:34.830 to their principal function. 00:27:40.449 --> 00:27:49.119 MOOSBRUGGER, KARL 80 machines don't operate on fixed programs. 00:27:49.120 --> 00:27:55.380 MOOSBRUGGER, KARL And they are capable of storing multiple programs. 00:27:55.380 --> 00:27:57.500 The interesting thing. 00:27:57.500 --> 00:28:08.900 MOOSBRUGGER, KARL That I think about. 00:28:08.900 --> 00:28:13.790 MOOSBRUGGER, KARL Here's the people forget the physical mismatch between. 00:28:13.790 --> 00:28:17.170 MOOSBRUGGER, KARL A device like an epic mining machine, 00:28:17.170 --> 00:28:20.800 as compared to a functional ADP machine, the ASIC miners, 00:28:20.800 --> 00:28:23.480 they have no storage, they don't have the video output. 00:28:23.480 --> 00:28:26.370 There isn't even a reason to attach a keyboard or a mouse. 00:28:26.370 --> 00:28:29.320 MOOSBRUGGER, KARL There's nothing that is done locally 00:28:29.320 --> 00:28:32.740 on the machine once it's configured to run, because the interface 00:28:32.740 --> 00:28:36.180 with the mining machine is done by a web application over a network. 00:28:43.167 --> 00:28:45.930 MOOSBRUGGER, KARL OK, so we've determined the cryptocurrency miners 00:28:45.930 --> 00:28:49.610 in general are not considered, are not classified. 00:28:49.610 --> 00:28:51.740 MOOSBRUGGER, KARL As the ADP machine under. 00:28:51.740 --> 00:28:55.810 MOOSBRUGGER, KARL 8471 they're not for the programmable. 00:28:55.810 --> 00:28:58.490 MOOSBRUGGER, KARL And they're not performing general purpose 00:28:58.491 --> 00:28:59.694 computing functions etcetera. 00:29:01.300 --> 00:29:03.900 MOOSBRUGGER, KARL But what about classification under 8471? 00:29:03.900 --> 00:29:06.320 Has a unit of ADP. 00:29:06.967 --> 00:29:11.170 MOOSBRUGGER, KARL Remember note 6C1 says that the unit 00:29:11.170 --> 00:29:13.530 must be principally used in an ADP system. 00:29:13.530 --> 00:29:18.590 MOOSBRUGGER, KARL Just we already discussed, they aren't and 662. 00:29:18.590 --> 00:29:21.210 MOOSBRUGGER, KARL Says the unit must be connectable 00:29:21.210 --> 00:29:25.350 to the ADP machine directly or through another unit. 00:29:25.350 --> 00:29:29.360 MOOSBRUGGER, KARL A network connection does not satisfy 00:29:29.360 --> 00:29:31.160 through another unit requirement. 00:29:31.160 --> 00:29:34.940 MOOSBRUGGER, KARL Lastly, the mining is an autonomous function. 00:29:34.940 --> 00:29:38.110 Once it's configured, it just runs and generates hashes until it solves one. 00:29:40.100 --> 00:29:42.940 MOOSBRUGGER, KARL This falls to note 6E and is excluded by function. 00:29:43.633 --> 00:29:46.540 MOOSBRUGGER, KARL As a result, cryptocurrency mining machines 00:29:46.540 --> 00:29:48.450 cannot be considered units of ADP. 00:29:52.367 --> 00:29:55.400 MOOSBRUGGER, KARL So to recap, note 6 to chapter 84. 00:29:55.400 --> 00:29:59.098 MOOSBRUGGER, KARL We said 80P machines are free 00:29:59.099 --> 00:30:00.910 to programmable devices. 00:30:00.910 --> 00:30:04.470 Users can add programs that they're choosing 00:30:04.471 --> 00:30:07.160 when cryptocurrency mining is one 00:30:07.160 --> 00:30:10.810 of the many applications the ADP machine performs. 00:30:10.810 --> 00:30:12.990 The mining function may not. 00:30:12.990 --> 00:30:14.840 MOOSBRUGGER, KARL Precluded from. 00:30:14.840 --> 00:30:17.830 MOOSBRUGGER, KARL Being satisfying note 6A, and it 00:30:17.830 --> 00:30:20.460 may not be excluded by 6 E. 00:30:20.460 --> 00:30:24.380 MOOSBRUGGER, KARL A machine that incorporates at 8:00 PM machine 00:30:24.380 --> 00:30:27.790 but is performing a dedicated function of cryptocurrency mining 00:30:27.790 --> 00:30:30.790 would be precluded from classification 8471. 00:30:30.790 --> 00:30:36.450 Buy Note 6E and my machines can't be ADP units because they're not used 00:30:36.450 --> 00:30:39.300 in an ADP system, and they're not connectable. 00:30:39.300 --> 00:30:40.490 MOOSBRUGGER, KARL To a. 00:30:40.490 --> 00:30:42.320 MOOSBRUGGER, KARL AP machine. 00:30:46.033 --> 00:30:48.140 MOOSBRUGGER, KARL Before we end this up to Luke, I want to circle back 00:30:48.140 --> 00:30:50.870 and talk about parts and section 16. 00:30:50.870 --> 00:30:55.640 We classify parts in their own turf provision whenever applicable. 00:30:55.640 --> 00:30:57.960 MOOSBRUGGER, KARL Here we have our commercially available 00:30:57.960 --> 00:30:59.600 graphics processing unit. 00:30:59.600 --> 00:31:03.670 MOOSBRUGGER, KARL Readily available online and after big electronic stores, 00:31:03.670 --> 00:31:08.370 they're recognized and sold as graphics boards for personal computers. 00:31:08.370 --> 00:31:15.980 The classification for the GPU is imported on its own is 8473 thirty 1180. 00:31:18.433 --> 00:31:19.140 MOOSBRUGGER, KARL But GPU. 00:31:21.233 --> 00:31:23.090 MOOSBRUGGER, KARL I'm sorry, once the GPU is installed 00:31:23.090 --> 00:31:26.610 into a machine, whether it's an ADP machine or a mining machine, 00:31:26.610 --> 00:31:28.660 it's classified with that machine. 00:31:28.660 --> 00:31:30.500 That's classification 101. 00:31:30.500 --> 00:31:33.430 MOOSBRUGGER, KARL But what about the GPU that's been modified, 00:31:33.430 --> 00:31:38.206 especially for use as a crypto minor because it's dedicated as. 00:31:38.299 --> 00:31:39.549 MOOSBRUGGER, KARL A cryptocurrency miner. 00:31:39.550 --> 00:31:44.350 MOOSBRUGGER, KARL It would no longer be recognized as a part in 8473 00:31:44.350 --> 00:31:48.320 if imported by itself, and it would be classified outside 00:31:48.320 --> 00:31:49.500 of Chapter 84 altogether. 00:31:53.433 --> 00:31:54.990 MOOSBRUGGER, KARL The same goes for the FPGA and the ASIC. 00:31:54.990 --> 00:31:58.420 MOOSBRUGGER, KARL Remember that the function of the FPGA is determined 00:31:58.420 --> 00:31:59.020 by its programming. 00:31:59.020 --> 00:32:03.220 MOOSBRUGGER, KARL Mining programs must be written to the FPGA 00:32:03.220 --> 00:32:04.880 to determine its use as a crypto miner. 00:32:04.880 --> 00:32:08.870 MOOSBRUGGER, KARL Just like the code that's written for other functions 00:32:08.870 --> 00:32:13.550 such As for industrial control or medical purposes, programs are written 00:32:13.550 --> 00:32:16.590 to the FPGA to accomplish those functions. 00:32:16.590 --> 00:32:21.350 MOOSBRUGGER, KARL Whereas ASICS used for mining are designed 00:32:21.350 --> 00:32:25.380 and manufactured for that purpose, today's market, the internal circuitry 00:32:25.380 --> 00:32:29.660 of an ASIC, has manufactured specifically for crypto mining, 00:32:29.660 --> 00:32:32.280 is what likely dedicates its use for that function. 00:32:32.280 --> 00:32:33.780 And it's not just programming. 00:32:34.967 --> 00:32:37.410 MOOSBRUGGER, KARL But not all FPGA and ASICS are used 00:32:37.410 --> 00:32:39.420 for cryptocurrency mining. 00:32:39.420 --> 00:32:42.080 MOOSBRUGGER, KARL They are also used throughout the electronics 00:32:42.080 --> 00:32:42.820 and machinery industry. 00:32:44.471 --> 00:32:45.370 MOOSBRUGGER, KARL Just with crypto. 00:32:46.300 --> 00:32:47.247 MOOSBRUGGER, KARL Just remember, 00:32:47.248 --> 00:32:49.660 every classification must stand on its own, 00:32:49.660 --> 00:32:53.230 so in ASIC board that is part of a laser cutting machine cannot be called 00:32:53.230 --> 00:32:56.710 a mining board simply because it has a 6 mounted to. 00:32:58.500 --> 00:33:01.650 MOOSBRUGGER, KARL And when ASICS and Fpgas are imported. 00:33:01.650 --> 00:33:05.850 MOOSBRUGGER, KARL Unmounted or unattached to a board or assembly. 00:33:05.850 --> 00:33:10.900 We're likely looking at heading 8542 because Chapter 85, node 12 says. 00:33:10.900 --> 00:33:15.770 MOOSBRUGGER, KARL Headings 8541 and 8542 shall take precedence 00:33:15.770 --> 00:33:17.320 over any other heading in the nomenclature. 00:33:17.320 --> 00:33:21.930 MOOSBRUGGER, KARL Therefore, even if an ASIC that is specially designed 00:33:21.930 --> 00:33:26.210 to be a cryptocurrency mining processor, when imported in an 00:33:26.210 --> 00:33:28.220 in an integrated circuit form. 00:33:28.220 --> 00:33:31.870 MOOSBRUGGER, KARL It must be classified under 8542. 00:33:35.490 --> 00:33:37.600 MOOSBRUGGER, KARL Since the 2018 webinar 00:33:37.600 --> 00:33:40.330 we have had some very detailed rulings issued 00:33:40.330 --> 00:33:42.770 that could be a tremendous resource for the classification 00:33:42.770 --> 00:33:44.080 of cryptocurrency mining machines. 00:33:45.300 --> 00:33:46.530 MOOSBRUGGER, KARL I think that we can all recognize 00:33:46.530 --> 00:33:48.264 that these machines are complex. 00:33:48.287 --> 00:33:50.480 MOOSBRUGGER, KARL The classification approach that we have 00:33:50.480 --> 00:33:51.670 to use is very convoluted. 00:33:54.700 --> 00:33:55.410 MOOSBRUGGER, KARL Please do a good job 00:33:55.410 --> 00:33:58.800 in addressing all the various angles and provide an explanation 00:33:58.800 --> 00:34:03.550 as to why they are not AP machines where units, as you can see here, 00:34:03.550 --> 00:34:08.770 CVP's position is that mine functions are not data processing functions. 00:34:08.770 --> 00:34:10.780 MOOSBRUGGER, KARL That's the take away from the first half 00:34:10.780 --> 00:34:11.300 of today's webinar. 00:34:13.300 --> 00:34:14.710 MOOSBRUGGER, KARL Before we hand this off to Luke, I wanted 00:34:14.710 --> 00:34:17.450 to bring up the pending classification issue before the Court 00:34:17.450 --> 00:34:18.817 of International Trade. 00:34:18.829 --> 00:34:21.089 The number is right here on the slide. 00:34:21.090 --> 00:34:25.300 MOOSBRUGGER, KARL And the issue brought forth to the to the court. 00:34:25.300 --> 00:34:26.448 MOOSBRUGGER, KARL Is. 00:34:26.448 --> 00:34:29.167 MOOSBRUGGER, KARL The HP system classification 00:34:29.168 --> 00:34:31.701 under 84 Seventy 149 versus. 00:34:47.107 --> 00:34:48.980 MOOSBRUGGER, KARL That's all I have for my part today and I'm going 00:34:48.980 --> 00:34:49.840 to hand it off to Luke. 00:34:49.840 --> 00:34:53.170 I remember that specialized machines performing a function 00:34:53.170 --> 00:34:57.560 that is not data processing or excluded from heading 8471. 00:34:57.560 --> 00:34:59.870 It doesn't matter if it's hardware or software limitation. 00:34:59.870 --> 00:35:04.380 If the machine cannot be freely programmed, it does not go in 8471. 00:35:06.433 --> 00:35:08.060 MOOSBRUGGER, KARL If you have any questions, we can address them 00:35:08.060 --> 00:35:09.510 at the conclusion of the webinar. 00:35:09.510 --> 00:35:11.850 If time permits, or you can email me. 00:35:12.433 --> 00:35:14.120 MOOSBRUGGER, KARL Here are our email addresses. 00:35:16.433 --> 00:35:18.520 MOOSBRUGGER, KARL Which are also going to be at the end of this slide. 00:35:18.520 --> 00:35:20.950 At this time, I'm gonna hand this off to. 00:35:20.950 --> 00:35:24.603 MOOSBRUGGER, KARL Luke and I appreciate everyone again 00:35:24.604 --> 00:35:25.820 for stopping in. 00:35:25.820 --> 00:35:26.480 Thank. 00:35:41.774 --> 00:35:44.643 LEPAGE, LUKE OK, everybody just give me one second while we. 00:35:46.470 --> 00:35:48.690 LEPAGE, LUKE Get everything switched over. 00:36:01.699 --> 00:36:03.379 LEPAGE, LUKE Alright, looks like I'm ready to go. 00:36:03.900 --> 00:36:04.500 LEPAGE, LUKE Alright. 00:36:04.500 --> 00:36:05.860 Hi everyone. 00:36:05.860 --> 00:36:10.380 At first wanna thank Carl for his in depth and interesting presentation 00:36:10.380 --> 00:36:15.010 that got us started as he said, my name's Lukla Paige and I'm the NIS 00:36:15.010 --> 00:36:16.020 for Office 212. 00:36:16.020 --> 00:36:18.600 LEPAGE, LUKE And I'll continue to discuss 00:36:18.600 --> 00:36:22.340 where these minors should be classified in the rationale behind it, 00:36:22.340 --> 00:36:26.640 but it's Carl did a really job discussing the particular technology. 00:36:26.640 --> 00:36:27.240 LEPAGE, LUKE UM. 00:36:29.167 --> 00:36:31.250 LEPAGE, LUKE That uh, the merchandise uses. 00:36:31.250 --> 00:36:35.360 I'm gonna focus pretty much solely on how we got to the final classification. 00:36:35.360 --> 00:36:37.333 LEPAGE, LUKE I got an email a bitterly 00:36:37.334 --> 00:36:38.930 or from someone that saw the name 00:36:38.930 --> 00:36:43.020 of the presentation and thought that maybe it was a webinar on investing. 00:36:43.020 --> 00:36:44.700 Unfortunately, that's not the case. 00:36:44.700 --> 00:36:48.040 I'm not quite that smart, so if you showed up thinking 00:36:48.040 --> 00:36:53.210 we were gonna help you out with your retirement portfolio, sorry about that. 00:36:53.210 --> 00:36:53.760 So. 00:36:53.760 --> 00:36:57.020 LEPAGE, LUKE What if you have any questions like I said, 00:36:57.020 --> 00:37:00.380 please put them into the chat box. 00:37:00.380 --> 00:37:03.760 We'll try to monitor those and if we have have time at the end, 00:37:03.760 --> 00:37:06.540 we'll get to any questions you may have. 00:37:08.433 --> 00:37:08.690 LEPAGE, LUKE OK. 00:37:11.033 --> 00:37:14.080 LEPAGE, LUKE A car went over a lot of our, you know, mission statements 00:37:14.080 --> 00:37:18.340 and you know some of these house keeping slides at the beginning. 00:37:18.340 --> 00:37:22.680 I did leave them in just in case since we're doing separate presentations. 00:37:22.680 --> 00:37:26.630 If you open up mine or his, that way you'll have all of this information. 00:37:26.630 --> 00:37:28.620 LEPAGE, LUKE Uh in the future? 00:37:30.270 --> 00:37:33.370 LEPAGE, LUKE Same disclaimer that he went over. 00:37:34.767 --> 00:37:36.370 LEPAGE, LUKE Again, he also went over this one. 00:37:37.633 --> 00:37:40.090 LEPAGE, LUKE I know we already mentioned it, 00:37:40.090 --> 00:37:44.230 but I can't really stress enough our preference to have ruling submitted 00:37:45.220 --> 00:37:46.500 for issues that may come up. 00:37:46.500 --> 00:37:49.600 This is especially true for any issues that may not have been addressed 00:37:49.600 --> 00:37:53.400 before the tariff changed this year, as I'm sure that a lot of you know. 00:37:53.400 --> 00:37:56.370 So it makes getting rulings on the books for some of these new 00:37:56.370 --> 00:37:58.900 or altered headings all the more important. 00:37:58.900 --> 00:38:01.040 Sometimes we may not realize there's an issue 00:38:01.040 --> 00:38:03.660 with some changing classifications or an overlap 00:38:03.660 --> 00:38:06.840 in some way before it's brought to our attention and a request. 00:38:06.840 --> 00:38:10.010 LEPAGE, LUKE Also, there's always court cases in motion 00:38:10.010 --> 00:38:12.151 that can affect the way that we interpret headings 00:38:12.152 --> 00:38:13.200 and notes going forward. 00:38:13.200 --> 00:38:16.960 LEPAGE, LUKE So kind of bear that in mind if you don't know which 00:38:16.960 --> 00:38:20.680 if you if you don't know what's going on, just submit a ruling request 00:38:20.680 --> 00:38:22.080 and we can we can help out with that. 00:38:23.120 --> 00:38:26.330 And for those internal participants please also keep this in mind 00:38:26.330 --> 00:38:27.780 when you're talking to your accounts. 00:38:28.633 --> 00:38:31.650 LEPAGE, LUKE Uh, there are ways for for you folks to discuss, 00:38:31.650 --> 00:38:35.060 discuss issues with us internally that may be more complex 00:38:35.060 --> 00:38:37.460 or that you need a more concrete answer on. 00:38:37.460 --> 00:38:40.710 Please keep those in mind going forward as well. 00:38:40.710 --> 00:38:45.270 Bottom line, when in doubt, please reach out and submit a ruling to us. 00:38:47.900 --> 00:38:50.663 LEPAGE, LUKE OK, this is a list of all the headings covered 00:38:50.664 --> 00:38:52.460 by my Office 212. 00:38:52.460 --> 00:38:55.489 As you can see we handle the end of Chapter 85 00:38:55.490 --> 00:38:57.680 and the first part of Chapter 90. 00:38:57.680 --> 00:39:02.750 Most of our work seems to be dedicated to headings 8543 and 8544, 00:39:02.750 --> 00:39:05.290 but we do see a good amount within Chapter 90 as well. 00:39:05.290 --> 00:39:10.350 LEPAGE, LUKE I I realized when I was going back through this this morning 00:39:10.350 --> 00:39:14.290 that I forgot to include the new heading 8549 in here. 00:39:14.290 --> 00:39:17.600 My office also handles that as well, so if you have any questions 00:39:17.600 --> 00:39:21.240 or concerns about the electronic or electrical scrap, 00:39:21.240 --> 00:39:24.650 the new heading I should be able to help out there as well. 00:39:24.650 --> 00:39:29.030 Today we're gonna focus on heading 8543 that I highlighted here. 00:39:31.233 --> 00:39:33.050 LEPAGE, LUKE OK. 00:39:33.050 --> 00:39:38.250 They just said we're gonna be focusing on heading 8543 and most specifically 00:39:38.250 --> 00:39:39.770 how the miners will get there. 00:39:42.433 --> 00:39:43.940 LEPAGE, LUKE Coral uh. 00:39:43.940 --> 00:39:47.940 It hopefully you don't get too caught up in a few things that we may 00:39:48.970 --> 00:39:54.580 that we may repeat it just just bear with us on that because it's if 00:39:54.580 --> 00:39:57.160 if we're repeating it, it's probably because we we think it's important 00:39:57.160 --> 00:39:59.780 and there is some crossover between what we're gonna do. 00:39:59.780 --> 00:40:03.730 I'll try to come at things at a little bit different way than he did. 00:40:03.730 --> 00:40:07.970 So we won't bore you too much with hearing the same thing twice 00:40:07.970 --> 00:40:12.150 but I'm really hoping we don't do that but OK. 00:40:12.150 --> 00:40:15.490 LEPAGE, LUKE Here's the heading notation for 8543. 00:40:15.490 --> 00:40:19.510 It's electrical machines having individual functions not specified 00:40:19.510 --> 00:40:23.440 or included elsewhere in this chapter and parts thereof. 00:40:23.440 --> 00:40:26.230 The way the heading reads, it's pretty easy to assume 00:40:26.230 --> 00:40:29.690 and call this a basket provision within the terms of the HTS. 00:40:29.690 --> 00:40:33.670 However, as you're gonna hopefully learn in the next bit of my presentation, 00:40:33.670 --> 00:40:37.640 there's specific benchmarks that you must be able to hit before being able 00:40:37.640 --> 00:40:39.650 to be included within the heading. 00:40:39.650 --> 00:40:43.390 These criteria protect the heading from being a catchall for anything 00:40:43.390 --> 00:40:43.860 and everything. 00:40:43.860 --> 00:40:45.410 LEPAGE, LUKE That we can't plan is for. 00:40:50.833 --> 00:40:53.880 LEPAGE, LUKE So here are the three distinct criteria in order for a good 00:40:53.880 --> 00:40:59.070 or article to be included within heading 8543, it must meet these criteria. 00:40:59.070 --> 00:41:02.830 LEPAGE, LUKE These are that it must be electrical. 00:41:02.830 --> 00:41:06.970 It must have an individual function and it must not be provided for elsewhere 00:41:06.980 --> 00:41:08.400 in the chapter. 00:41:08.400 --> 00:41:11.990 If an article fails any of these criteria, then it can't be considered 00:41:11.990 --> 00:41:13.900 for classification within the heading. 00:41:13.900 --> 00:41:17.533 I'll discuss each of these in more detail in the next couple of slides. 00:41:40.963 --> 00:41:44.699 LEPAGE, LUKE Though this electrical element seems pretty simple, 00:41:44.700 --> 00:41:45.920 there's some things to keep in mind. 00:41:45.920 --> 00:41:50.990 The explanatory notes dictate that the goods have to be primarily electrical. 00:41:50.990 --> 00:41:55.610 LEPAGE, LUKE Many goods function mechanically or by some other means, 00:41:55.610 --> 00:41:58.740 but are also powered electrically. 00:41:58.740 --> 00:42:02.430 We must look at each of these and find whether the mechanical elements 00:42:02.453 --> 00:42:06.413 are the critical feature or is it the electrical that's the most important. 00:42:07.470 --> 00:42:11.520 If the electrical components are subsidiary to the mechanical ones, 00:42:11.520 --> 00:42:13.730 then they can't be considered electrical goods. 00:42:13.730 --> 00:42:17.980 LEPAGE, LUKE For classification and heading 8543. 00:42:17.980 --> 00:42:24.760 LEPAGE, LUKE I put on here ruling H 259644. 00:42:24.760 --> 00:42:28.610 This discusses the issue in a in a lot more detail and relates it 00:42:28.610 --> 00:42:30.500 to this a little moving cat toy. 00:42:31.670 --> 00:42:35.840 In this case they found that the cat toy was primarily mechanical 00:42:35.840 --> 00:42:40.090 as the electrical qualities only supported the mechanical function. 00:42:40.090 --> 00:42:44.530 In other words, this little cat toy was powered by a battery, 00:42:44.536 --> 00:42:48.240 but the battery only served to allow the gears and small motors. 00:42:48.240 --> 00:42:50.590 LEPAGE, LUKE Inside the toy to move around. 00:42:50.590 --> 00:42:53.390 LEPAGE, LUKE Another way to think about this would be 00:42:53.390 --> 00:42:57.950 to picture a mechanical machine like a drill or other power tools, 00:42:57.950 --> 00:43:00.560 or like an industrial conveyor system. 00:43:00.560 --> 00:43:03.700 These are obviously powered by electrical means they're plugged in, 00:43:03.700 --> 00:43:07.670 or, you know, used some sort of generator to work, 00:43:07.670 --> 00:43:10.037 but they're function is mechanical, 00:43:10.038 --> 00:43:13.080 since the movements and functions are motor 00:43:13.080 --> 00:43:16.270 and gear driven and not primarily electrical. 00:43:22.767 --> 00:43:25.260 LEPAGE, LUKE OK, now we're going to get into the second criteria 00:43:25.260 --> 00:43:30.130 for inclusion with heading 8543 and that it must have an individual function. 00:43:31.075 --> 00:43:34.220 LEPAGE, LUKE In my view, this is where most of the goods get eliminated 00:43:34.220 --> 00:43:37.860 from consideration and also the one that can be the most confusing. 00:43:37.860 --> 00:43:41.760 LEPAGE, LUKE This next part might get a little bit confusing so. 00:43:41.760 --> 00:43:44.820 LEPAGE, LUKE Please bear with me if you can. 00:43:44.820 --> 00:43:49.620 A lot of it is is based on explanatory notes and and sometimes those don't. 00:43:51.767 --> 00:43:57.060 LEPAGE, LUKE Get updated and or don't read as as clearly and and succinctly 00:43:57.060 --> 00:43:57.860 as we may like. 00:43:57.860 --> 00:44:01.940 So this is a lot of interpretation and and and helping through here. 00:44:01.940 --> 00:44:05.880 So again hopefully I don't get too far into the weeds 00:44:05.880 --> 00:44:07.620 and don't don't lose everybody out there. 00:44:07.620 --> 00:44:15.490 LEPAGE, LUKE The explanatory notes to heading 8543 direct us to heading 8479 00:44:15.490 --> 00:44:17.870 to reference the definition of individual function. 00:44:18.920 --> 00:44:23.620 The in state that we change the word mechanical to electrical 00:44:23.620 --> 00:44:24.770 in order to fit the definition. 00:44:27.100 --> 00:44:30.250 LEPAGE, LUKE As you can see here, there are two separate parts 00:44:30.250 --> 00:44:31.250 to the definition. 00:44:32.050 --> 00:44:37.730 The first is states that the device has a function that works independently 00:44:37.730 --> 00:44:40.290 from any other machine or appliance. 00:44:40.290 --> 00:44:43.010 In other words, do you have to hook it up to another unit 00:44:43.010 --> 00:44:44.010 in order to make it work? 00:44:44.840 --> 00:44:48.590 If you don't, then we can consider it as having an individual function. 00:44:49.300 --> 00:44:53.070 LEPAGE, LUKE However, this doesn't necessarily kick it completely out 00:44:53.070 --> 00:44:57.050 because the next part talks about how if you do have to connect it 00:44:57.050 --> 00:44:58.110 to something else. 00:44:58.110 --> 00:45:00.590 LEPAGE, LUKE And is the function. 00:45:00.590 --> 00:45:04.520 They can perform distinct from the machine that it's connected to, 00:45:04.520 --> 00:45:10.250 and does it play an inseparable role in the units that it attaches to? 00:45:10.250 --> 00:45:11.790 It's really critical to read that and. 00:45:11.790 --> 00:45:19.300 LEPAGE, LUKE One this, this and right here hopefully that that helps out. 00:45:19.300 --> 00:45:21.530 My cursor didn't work so never mind. 00:45:25.633 --> 00:45:28.720 LEPAGE, LUKE Is the function that the good performs a separate function 00:45:28.720 --> 00:45:30.270 from the unit that it attaches to. 00:45:30.270 --> 00:45:34.120 LEPAGE, LUKE If so, does the host device need the unit in question 00:45:34.133 --> 00:45:35.630 in order to work correctly? 00:45:35.630 --> 00:45:39.660 LEPAGE, LUKE If the answer to the first question is yes and no 00:45:39.660 --> 00:45:42.200 to the second, then the good can still be considered 00:45:42.200 --> 00:45:43.660 to have an individual function. 00:45:43.660 --> 00:45:47.770 LEPAGE, LUKE This part is going to be pretty critical going forward, 00:45:47.770 --> 00:45:50.650 so hopefully it it makes some sense. 00:45:56.167 --> 00:45:58.800 LEPAGE, LUKE Yeah, here a couple of examples from the explanatory notes 00:45:58.800 --> 00:46:02.110 that hopefully will better illustrate what we're talking about. 00:46:02.110 --> 00:46:07.180 LEPAGE, LUKE Again, these somebody, you'll notice some of these are are 00:46:07.180 --> 00:46:10.690 maybe a little bit dated or or a little bit you know not relevant 00:46:10.690 --> 00:46:15.750 to to current times, but the DNS aren't exactly updated. 00:46:16.900 --> 00:46:21.680 LEPAGE, LUKE Quickly and sometimes they they the examples can get 00:46:21.680 --> 00:46:23.000 a little convoluted but. 00:46:23.000 --> 00:46:27.940 LEPAGE, LUKE The first one discusses a humidifier or dehumidifier 00:46:27.940 --> 00:46:30.980 if this is a standalone unit, then it would meet the requirements 00:46:30.980 --> 00:46:33.500 of the first part of the definition and that it's distinct 00:46:33.500 --> 00:46:34.830 from any other machine. 00:46:34.830 --> 00:46:38.910 LEPAGE, LUKE If it's designed to be mounted onto an ozone generator, 00:46:38.910 --> 00:46:42.390 still performs a function independent from the generator, 00:46:42.390 --> 00:46:45.100 and the generator would not need the dehumidifier to work. 00:46:46.160 --> 00:46:48.930 Therefore it's considered to have an individual function. 00:46:48.930 --> 00:46:52.240 LEPAGE, LUKE A better example may be a humidifier that is designed 00:46:52.240 --> 00:46:54.230 to be installed on your home heating unit. 00:46:54.230 --> 00:46:57.810 LEPAGE, LUKE Uh, the heating unit can function without the humidifier 00:46:57.810 --> 00:47:02.350 and then be humidifier does not perform any part of the heating function. 00:47:02.350 --> 00:47:06.320 LEPAGE, LUKE Then you would consider that as having an individual function. 00:47:06.320 --> 00:47:10.470 LEPAGE, LUKE The second example in the slide is a chain cutter 00:47:10.470 --> 00:47:14.400 that attaches to an industrial sewing machine that cuts the thread 00:47:14.400 --> 00:47:16.000 as it passes through the machine. 00:47:16.000 --> 00:47:19.860 LEPAGE, LUKE As it plays no role in the actual sewing function, 00:47:19.860 --> 00:47:22.580 then we would consider it as having an individual function. 00:47:28.429 --> 00:47:31.920 LEPAGE, LUKE The final example is the really dated one, 00:47:31.920 --> 00:47:34.760 but still does have some relevance. 00:47:34.760 --> 00:47:35.520 Discuss. 00:47:35.520 --> 00:47:38.010 It discusses a carburetor for a vehicle engine. 00:47:38.989 --> 00:47:42.259 If you know what a carburetor is, then you're either a little bit older 00:47:42.260 --> 00:47:43.790 or into cars. 00:47:44.839 --> 00:47:47.669 New cars don't necessarily have these, so it's probably time 00:47:47.670 --> 00:47:50.910 for a better example to be put in here, but who knows when, 00:47:50.910 --> 00:47:52.920 when and if that would ever happen. 00:47:52.920 --> 00:47:56.620 LEPAGE, LUKE So the carburetor on an older engine performed 00:47:56.620 --> 00:47:58.970 a distinct function from the engine. 00:47:58.970 --> 00:48:02.365 The engine still required its presence in order to function. 00:48:02.366 --> 00:48:04.958 Therefore we can't consider it as having an individual function. 00:48:06.049 --> 00:48:09.699 The key point is that the engine can't function without it. 00:48:09.700 --> 00:48:14.270 It's more of a critical part to the engine than something that is separate. 00:48:20.033 --> 00:48:21.180 LEPAGE, LUKE Here are some more recent, 00:48:21.180 --> 00:48:24.970 and probably a little bit more relevant, ruling examples 00:48:24.970 --> 00:48:27.160 where individual function was discussed. 00:48:27.160 --> 00:48:32.657 LEPAGE, LUKE In H 310654 we considered 00:48:32.658 --> 00:48:35.150 a biometric time recording device 00:48:35.150 --> 00:48:38.780 that was placed within a time keeping system in a business. 00:48:38.780 --> 00:48:44.570 LEPAGE, LUKE The unit used facial recognition, fingerprint or card swipes, 00:48:44.570 --> 00:48:47.890 or typed input to identify an individual as they came into the building 00:48:49.079 --> 00:48:50.659 and recorded their time. 00:48:50.660 --> 00:48:55.170 This info was then sent to the host application to collect all of the data. 00:48:55.170 --> 00:48:57.600 LEPAGE, LUKE So it worked within the system. 00:48:57.600 --> 00:49:01.760 LEPAGE, LUKE It's function of biometric collection of data. 00:49:01.760 --> 00:49:06.020 LEPAGE, LUKE Was different and distinct from any other device. 00:49:06.020 --> 00:49:09.610 LEPAGE, LUKE Also, the function is completed without the assistance 00:49:09.610 --> 00:49:11.310 of another device. 00:49:11.310 --> 00:49:15.980 Therefore it was found having individual function and is classified under 8543. 00:49:17.633 --> 00:49:18.110 LEPAGE, LUKE Uh. 00:49:18.110 --> 00:49:25.250 Similarly, in H 271470, we looked at a network security device that is placed 00:49:25.250 --> 00:49:27.940 within the network of a commercial installation. 00:49:27.940 --> 00:49:31.030 LEPAGE, LUKE You essentially put it within the network 00:49:31.030 --> 00:49:34.810 and it monitors the traffic going in and out to try to spot any threats 00:49:34.817 --> 00:49:36.657 or or other issues that may be coming in. 00:49:37.710 --> 00:49:42.580 It's placed within an existing within an existing system, but the function 00:49:42.580 --> 00:49:45.213 of providing network security is separate 00:49:45.214 --> 00:49:49.040 from that of providing connectivity within the network. 00:49:49.040 --> 00:49:51.750 Again, it was found to have an individual function per the terms 00:49:51.750 --> 00:49:54.080 of the heading and the ENS. 00:49:54.080 --> 00:50:00.990 LEPAGE, LUKE Finally, in H 302137, we looked at a musical ring device 00:50:00.990 --> 00:50:04.170 that you wirelessly attach to a smart device. 00:50:04.170 --> 00:50:08.940 LEPAGE, LUKE In allows the user to play program sounds when each color 00:50:08.940 --> 00:50:10.280 of the ring is touched. 00:50:10.280 --> 00:50:13.680 LEPAGE, LUKE So it had to be connected to the smart device. 00:50:13.680 --> 00:50:17.450 It doesn't perform an integral function to your phone. 00:50:18.529 --> 00:50:20.769 It's separate and distinct and would be considered 00:50:20.770 --> 00:50:22.620 as having an individual functioning. 00:50:22.620 --> 00:50:25.771 LEPAGE, LUKE Reading these rulings should help getting 00:50:25.772 --> 00:50:29.926 a little better handle on the individual function part of the classification. 00:50:34.500 --> 00:50:37.249 LEPAGE, LUKE I wanted to give a few examples of rulings 00:50:37.250 --> 00:50:40.390 that did not meet the individual function criteria. 00:50:40.390 --> 00:50:46.230 LEPAGE, LUKE In H 225039 we looked at a motorized caddy 00:50:46.230 --> 00:50:48.310 that transported golf clubs. 00:50:48.310 --> 00:50:49.973 LEPAGE, LUKE The requester stated 00:50:49.974 --> 00:50:53.420 that the items had an individual function within heading 8479. 00:50:53.420 --> 00:51:01.750 LEPAGE, LUKE Again, not 8543, but uses the same general definition. 00:51:01.750 --> 00:51:07.300 LEPAGE, LUKE But CBP disagreed, so the ruling doesn't really dive deep 00:51:07.300 --> 00:51:11.040 into the weeds of why it was not meeting the definition. 00:51:11.040 --> 00:51:14.410 They do discuss how it is not incorporated within another unit, 00:51:14.410 --> 00:51:17.560 and now it has a clearly defined function in and of itself. 00:51:17.560 --> 00:51:25.160 LEPAGE, LUKE Likewise, in H 230513 and LED light was examined. 00:51:25.160 --> 00:51:29.100 This light was not a replacement bulb, but a complete lamp that had 00:51:29.100 --> 00:51:33.350 to be wired directly into the existing electrical system in order to be used. 00:51:33.350 --> 00:51:37.030 LEPAGE, LUKE Because it had to be wired directly in 00:51:37.030 --> 00:51:41.290 and was an integral portion of that, it was determined not 00:51:41.290 --> 00:51:42.570 to have an individual function. 00:51:42.570 --> 00:51:46.930 LEPAGE, LUKE I though neither of these rulings go into great detail 00:51:46.930 --> 00:51:50.540 in explaining the exact Inns and outs of why the goods failed the test. 00:51:50.540 --> 00:51:56.330 It's important that it does happen pretty regularly that goods do fail. 00:51:56.330 --> 00:51:57.440 The individual function test. 00:52:03.767 --> 00:52:07.090 LEPAGE, LUKE The one court case that routine that's routinely cited 00:52:07.090 --> 00:52:11.400 with regards to individual function is Fuji America versus the US. 00:52:11.400 --> 00:52:14.920 LEPAGE, LUKE Though the way I read it, it's a little tough to understand 00:52:14.920 --> 00:52:16.660 and apply in all instances. 00:52:16.660 --> 00:52:20.590 It does give some good insight regarding how a principal function can 00:52:20.590 --> 00:52:24.580 still be an individual function as well as a good definition of integral 00:52:24.580 --> 00:52:27.650 and inseparable regarding parts of items. 00:52:27.650 --> 00:52:31.300 The case deals with chip feeders and placers that are used 00:52:31.300 --> 00:52:33.320 to produce printed circuit assemblies. 00:52:33.320 --> 00:52:36.570 LEPAGE, LUKE Though the case ends up classifying and heading 8479 00:52:36.570 --> 00:52:40.310 and not 8543, still helpful when talking about individual function. 00:52:45.280 --> 00:52:48.320 LEPAGE, LUKE Now on to the final requirement for inclusion 00:52:48.320 --> 00:52:53.260 within heading 8543 is that the good cannot be provided for elsewhere. 00:52:53.260 --> 00:52:55.970 The terms of the heading state anywhere else and the chapter. 00:52:55.970 --> 00:52:58.520 But as you can see here, the explanatory notes expand this 00:52:58.520 --> 00:53:00.460 to mean anywhere else in the tariff. 00:53:00.460 --> 00:53:03.140 LEPAGE, LUKE This is important since there's a large amount 00:53:03.140 --> 00:53:08.000 of crossover between chapters 84 and 85, as well as some 00:53:08.000 --> 00:53:10.340 in further chapters like 90 and beyond. 00:53:15.100 --> 00:53:17.740 LEPAGE, LUKE Wanted to note this passage from a court case 00:53:17.740 --> 00:53:22.130 that contains some relevance to what we were talking about today 00:53:22.130 --> 00:53:24.510 in Apex Inc versus the United States. 00:53:24.510 --> 00:53:28.640 LEPAGE, LUKE Uh, it it said that classification is only appropriate 00:53:28.640 --> 00:53:32.400 in a basket provision if there's no category that covers the merchandise. 00:53:32.400 --> 00:53:35.920 More specifically, though I've stated throughout the first part 00:53:35.920 --> 00:53:39.040 of the presentation that in order for a good to be classified 00:53:39.040 --> 00:53:42.220 within the heading, there are certain benchmarks that it must hit. 00:53:42.220 --> 00:53:45.380 LEPAGE, LUKE In that way, there can be some argument 00:53:45.380 --> 00:53:49.210 that it isn't considered a basket provision in the traditional sense. 00:53:49.210 --> 00:53:53.140 However, as it's heading where that we can put electrical goods. 00:53:53.140 --> 00:53:56.830 LEPAGE, LUKE In that are not provided for elsewhere, the rules 00:53:56.830 --> 00:53:59.370 of classifying within a basket are are appropriate. 00:54:00.839 --> 00:54:05.430 LEPAGE, LUKE And you will see this quoted in past rulings concerning 8543. 00:54:11.260 --> 00:54:14.300 LEPAGE, LUKE OK, so now we can move on 00:54:14.300 --> 00:54:19.900 to exactly how the crypto miners get to be classified within heading 8543. 00:54:19.900 --> 00:54:24.640 LEPAGE, LUKE Carl did a good job of of discussing a few of these. 00:54:24.640 --> 00:54:26.020 These section notes here. 00:54:27.367 --> 00:54:28.530 LEPAGE, LUKE But I wanted to bring them up again. 00:54:28.530 --> 00:54:29.210 LEPAGE, LUKE Uh. 00:54:30.567 --> 00:54:34.030 LEPAGE, LUKE Note 3 to section 16 of the HTS says 00:54:34.030 --> 00:54:36.920 that a composite machine is either a machine that consists of two 00:54:36.920 --> 00:54:40.840 or more machines, or one that contains 2 or more complementary functions. 00:54:40.840 --> 00:54:44.290 You could classify these per the principal function of the unit. 00:54:44.290 --> 00:54:46.990 LEPAGE, LUKE Carl touched on earlier that there 00:54:46.990 --> 00:54:51.020 could be considered multiple functions that these items were form 00:54:51.020 --> 00:54:54.240 from calculating to mining to processing. 00:54:54.240 --> 00:54:58.120 It's important to figure out which of those are principal to the device. 00:54:58.120 --> 00:55:01.520 This is important because as we examine the things that the miners do, 00:55:01.520 --> 00:55:03.290 we need to decide if there's one function 00:55:03.290 --> 00:55:05.280 that is the most important above all others. 00:55:06.900 --> 00:55:08.610 LEPAGE, LUKE To go a little bit further and again, Carl, 00:55:08.610 --> 00:55:12.680 they touch on this one Note 4 to section 16 says that 00:55:12.680 --> 00:55:17.030 when a machine is comprised of a group of individual components used 00:55:17.030 --> 00:55:21.480 for one clearly defined function, then the whole unit is classified pursuant 00:55:21.480 --> 00:55:22.480 to that function. 00:55:23.030 --> 00:55:24.420 We labeled this the functional unit note. 00:55:26.700 --> 00:55:29.460 LEPAGE, LUKE So based on all this as well as the terms of the heading, 00:55:29.460 --> 00:55:32.860 it's important to thoroughly examine the particular functions of the miners. 00:55:32.860 --> 00:55:37.600 LEPAGE, LUKE Is the primary function to mine, or is it called something else? 00:55:37.600 --> 00:55:40.580 The unit contains graphics and other processors. 00:55:40.580 --> 00:55:43.710 Are these performing the function that is clearly defined? 00:55:46.633 --> 00:55:49.340 LEPAGE, LUKE What is hash calculation and is that something we must look at? 00:55:54.233 --> 00:55:54.590 LEPAGE, LUKE Again. 00:55:55.974 --> 00:55:59.810 LEPAGE, LUKE Carl noted and discussed these three relatively recent rulings 00:55:59.810 --> 00:56:01.320 on a couple of his slides. 00:56:01.320 --> 00:56:13.040 I wanted to bring him up again in H 300063, H 310388 and H 309938. 00:56:13.040 --> 00:56:18.260 These were all protests that were sent in headquarters or for further review, 00:56:18.260 --> 00:56:22.950 and all three cases the Protestant entered the goods under heading 8471 00:56:22.950 --> 00:56:26.200 and CBP subsequently liquidated the entries under 8543. 00:56:26.200 --> 00:56:29.900 LEPAGE, LUKE This was protested and CVP's decision was upheld. 00:56:30.833 --> 00:56:33.620 LEPAGE, LUKE The main take away from these rulings is that the principle 00:56:33.620 --> 00:56:37.710 that I'm sorry the principal function of the miners was considered 00:56:37.710 --> 00:56:39.500 to be the hash calculation. 00:56:39.500 --> 00:56:42.800 LEPAGE, LUKE Further to this principle function was considered 00:56:42.800 --> 00:56:46.440 an individual function per the terms of heading 8543. 00:56:51.567 --> 00:56:54.860 LEPAGE, LUKE Again, Carl did a had had some really good examples 00:56:54.860 --> 00:56:56.450 of what hash calculation is. 00:56:56.450 --> 00:57:00.460 We're just gonna dive back into it again, just so we can kind 00:57:00.460 --> 00:57:04.360 of understand it, hopefully as well as can be expected. 00:57:04.360 --> 00:57:07.150 LEPAGE, LUKE Short form hash calculation. 00:57:07.150 --> 00:57:10.810 That's the way that the miners collect the Bitcoin or other cryptocurrency 00:57:11.960 --> 00:57:13.330 to get a little bit more in depth. 00:57:13.330 --> 00:57:18.140 The hash calculation is a process by which mathematical puzzles or counting 00:57:18.140 --> 00:57:18.900 or solved. 00:57:18.900 --> 00:57:23.690 LEPAGE, LUKE And they're generated by the embedded algorithm algorithms 00:57:23.690 --> 00:57:26.700 this generates or discovers the coins. 00:57:26.700 --> 00:57:30.730 What you're trying to do with your minor is to be the first to solve the puzzle. 00:57:30.730 --> 00:57:33.194 If you are, you are awarded the discovered Bitcoin 00:57:33.195 --> 00:57:34.450 and other cryptocurrency. 00:57:35.440 --> 00:57:39.110 The process also verifies that every transaction made is authentic 00:57:39.110 --> 00:57:41.510 and aggregates it all into one certified blockchain. 00:57:41.510 --> 00:57:44.840 LEPAGE, LUKE This prevents double spending of the collected coins 00:57:44.840 --> 00:57:47.780 and ensures that you keep the coins that you accumulate. 00:57:47.780 --> 00:57:51.170 LEPAGE, LUKE To reiterate, this functional process was found 00:57:51.170 --> 00:57:53.700 to be the principal function of the crypto miners. 00:57:56.833 --> 00:58:00.680 LEPAGE, LUKE OK, so now that we have defined the principal function 00:58:00.680 --> 00:58:03.860 as being that of past hash mining, how does that relate 00:58:03.860 --> 00:58:07.890 to the individual function in terms of the 8543 criteria? 00:58:07.890 --> 00:58:10.248 Think back to the definition from the explanatory notes 00:58:10.249 --> 00:58:11.300 that I detailed earlier. 00:58:12.100 --> 00:58:14.410 LEPAGE, LUKE First part of that definition asks whether 00:58:14.410 --> 00:58:17.970 or not the function is performed distinctly and independently 00:58:17.970 --> 00:58:18.960 of another machine. 00:58:18.960 --> 00:58:20.720 LEPAGE, LUKE Is that the case here? 00:58:20.720 --> 00:58:23.820 Remember, from what we discussed earlier, the miners have to be attached 00:58:23.820 --> 00:58:25.300 to the computer in order to function. 00:58:25.300 --> 00:58:27.030 They do not qualify within this part of the head. 00:58:28.300 --> 00:58:30.430 LEPAGE, LUKE The part of the definition, I'm sorry. 00:58:32.567 --> 00:58:34.540 LEPAGE, LUKE However, there's another part to this. 00:58:34.540 --> 00:58:38.020 The second part of the definition states that if it is mounted on A 00:58:38.020 --> 00:58:41.040 to another machine, it must have a different function 00:58:41.040 --> 00:58:43.070 and not be integral and inseparable. 00:58:43.070 --> 00:58:48.610 LEPAGE, LUKE The miners are performed performing a hash calculation function 00:58:48.610 --> 00:58:52.200 which is not the same as the function of the AP machine and it is connected to. 00:58:52.200 --> 00:58:55.710 LEPAGE, LUKE Beyond that, dysfunction is not integral or inseparable 00:58:55.710 --> 00:58:58.890 from the function of the computer or the AP machine. 00:58:58.890 --> 00:59:02.840 The computer does not need the minor in order to function, so the minor fails. 00:59:02.840 --> 00:59:06.600 The first part of the definition of 8479, it meets the second part 00:59:06.600 --> 00:59:09.050 and can be considered as having an individual function. 00:59:15.917 --> 00:59:18.950 LEPAGE, LUKE The final criteria for inclusion in 8543 is 00:59:18.950 --> 00:59:22.180 that the good must not be provided for elsewhere. 00:59:22.180 --> 00:59:25.330 Again, as I stated earlier, this is expanded to me in anywhere else 00:59:25.330 --> 00:59:27.320 in the tariff, not just in Chapter 85. 00:59:29.233 --> 00:59:30.282 LEPAGE, LUKE If it detailed examination 00:59:30.283 --> 00:59:32.830 of the terror pettings is completed, 00:59:32.830 --> 00:59:36.010 then you would find that hash mining calculation 00:59:36.010 --> 00:59:39.310 or crypto mining isn't referenced anywhere else. 00:59:39.310 --> 00:59:44.040 More specifically, it doesn't meet the definitions as set forth for inclusion 00:59:44.040 --> 00:59:47.550 within heading 8471 or 8473. 00:59:47.550 --> 00:59:48.440 As Carl discussed earlier. 00:59:53.167 --> 00:59:55.240 LEPAGE, LUKE It's a nice little flow chart of how we got 00:59:55.240 --> 00:59:58.730 to where we are is the good electrical clearly, yes. 00:59:58.730 --> 01:00:01.411 LEPAGE, LUKE Does it have an individual function 01:00:01.412 --> 01:00:03.920 as we explained earlier, yes it does. 01:00:03.920 --> 01:00:05.000 And finally. 01:00:05.000 --> 01:00:07.440 LEPAGE, LUKE Is it not provided for elsewhere? 01:00:07.440 --> 01:00:07.810 It is not. 01:00:07.810 --> 01:00:10.690 LEPAGE, LUKE Because of this, we can classify the miners 01:00:10.690 --> 01:00:12.480 within heading 84 eighty 543. 01:00:17.167 --> 01:00:19.020 LEPAGE, LUKE To drill this down a little bit further, 01:00:19.020 --> 01:00:22.480 within the particular subheadings, you'll see that there isn't a subheading 01:00:22.480 --> 01:00:25.330 that fits the technology we would place these minors under. 01:00:25.330 --> 01:00:31.790 The all other subheading of 8543, seventy 9860 at 2.6%. 01:00:31.790 --> 01:00:34.940 Just a note that the last four of this classification changed 01:00:34.940 --> 01:00:36.040 in the 2022 tariff. 01:00:36.040 --> 01:00:38.670 LEPAGE, LUKE Prior to then, the classification 01:00:38.670 --> 01:00:44.370 would have been 8543 seventy 9960 with the same duty rate. 01:00:44.370 --> 01:00:46.670 So if you're reviewing past rulings and see a reference 01:00:46.670 --> 01:00:49.570 to this 10 digit classification, you won't be confused. 01:00:54.433 --> 01:00:57.710 LEPAGE, LUKE Just wanted to touch briefly on parts of crypto miners 01:00:57.710 --> 01:01:00.420 and how they would relate to classification. 01:01:01.767 --> 01:01:02.930 LEPAGE, LUKE As you can see on this slide, 01:01:02.930 --> 01:01:06.070 there are multiple subheadings devoted to the parts of goods 01:01:06.070 --> 01:01:08.030 within heading 8543. 01:01:08.030 --> 01:01:10.260 They are broken out by what they are used for and 01:01:10.260 --> 01:01:14.410 in one case whether they are printed circuit assemblies, fewer presented 01:01:14.410 --> 01:01:15.830 with a part of a crypto miner. 01:01:15.830 --> 01:01:18.920 It's important to examine exactly what you have and how it functions 01:01:18.920 --> 01:01:20.460 within the minor. 01:01:20.460 --> 01:01:21.380 As you can see. 01:01:21.380 --> 01:01:23.908 LEPAGE, LUKE Here the first part 01:01:23.909 --> 01:01:27.230 of the parts goes physical vapor deposition, 01:01:27.230 --> 01:01:31.340 apparatus assemblies and sub assemblies were flight data. 01:01:31.340 --> 01:01:32.460 So not either of those. 01:01:32.460 --> 01:01:34.150 Then you get in the other. 01:01:34.150 --> 01:01:37.690 As you can see under other it's broken out into printed circuit assemblies 01:01:37.690 --> 01:01:38.890 and other parts. 01:01:38.890 --> 01:01:44.210 So knowing exactly what you have and how it functions is important. 01:01:44.210 --> 01:01:46.300 LEPAGE, LUKE Uh. 01:01:46.300 --> 01:01:53.470 LEPAGE, LUKE Carl mentioned the ASIC boards in pretty in in in depth, 01:01:53.470 --> 01:01:55.970 so I'm not gonna go too deep into what they are. 01:01:55.970 --> 01:02:00.210 LEPAGE, LUKE I just wanted to mention that if they are designed 01:02:00.210 --> 01:02:04.860 for mining only, as you can see, this is clearly a printed circuit assembly. 01:02:06.060 --> 01:02:10.020 It's a printed circuit board with all of the ASIC chips along the top. 01:02:11.233 --> 01:02:14.490 LEPAGE, LUKE This would be considered a PCB part 01:02:14.490 --> 01:02:18.430 for the minor under 8543 ninety 68. 01:02:18.430 --> 01:02:29.350 LEPAGE, LUKE Another thing to keep in mind is that heading 8543 does not have 01:02:29.350 --> 01:02:30.800 an accessory provision. 01:02:30.800 --> 01:02:33.110 It only includes parts. 01:02:33.110 --> 01:02:37.060 We've recently seen some items that are used in conjunction with minors 01:02:37.060 --> 01:02:38.650 that would not be considered parts. 01:02:38.650 --> 01:02:41.290 LEPAGE, LUKE Remember that these units use a ton of power 01:02:41.291 --> 01:02:43.160 and generate a lot of heat, 01:02:43.161 --> 01:02:46.830 so the accessories may include cabinets and stands, 01:02:46.830 --> 01:02:49.100 fans and other storage devices. 01:02:49.100 --> 01:02:52.100 These would have to be classified, but they're function name 01:02:52.100 --> 01:02:55.260 or constituent material, regardless of the fact that they are meant 01:02:55.260 --> 01:02:56.720 to be used with a minor. 01:02:57.900 --> 01:03:00.650 LEPAGE, LUKE For more questions on this, I recommend reaching out 01:03:00.650 --> 01:03:05.310 to your center representatives or the NIS office that may handle that item. 01:03:05.310 --> 01:03:08.920 You could also reach out to me or or Carl and we could kind 01:03:08.920 --> 01:03:12.990 of help you out along the way with how to best classify that. 01:03:17.300 --> 01:03:18.330 LEPAGE, LUKE So why does it all matter? 01:03:18.330 --> 01:03:21.930 LEPAGE, LUKE Obviously, we always want to try to be as accurate 01:03:21.930 --> 01:03:26.770 and complete as possible in our classification, but beyond that 8471 01:03:26.770 --> 01:03:29.250 and 8473 are duty free provisions. 01:03:29.250 --> 01:03:34.340 While subheading 8543 Seventy 9860 is dutiable at 2.6%. 01:03:34.340 --> 01:03:37.410 LEPAGE, LUKE Also, both are subject to 301 revenues 01:03:37.410 --> 01:03:40.270 out of China under 9903 eighty 802. 01:03:43.900 --> 01:03:46.110 LEPAGE, LUKE Here's the webinar link. 01:03:46.110 --> 01:03:46.830 Again, I know. 01:03:46.830 --> 01:03:50.640 LEPAGE, LUKE Coral also put this on there. 01:03:50.640 --> 01:03:55.780 LEPAGE, LUKE But I wanted to make sure that everybody had a chance 01:03:55.780 --> 01:03:56.760 to to copy it down. 01:03:56.760 --> 01:03:58.180 So here it is. 01:03:58.180 --> 01:04:01.668 I think it things should be posted in the near future on here. 01:04:01.690 --> 01:04:05.900 There's some Inns and outs that have to be done, but hopefully hopefully 01:04:05.900 --> 01:04:09.644 in the relatively near future, these should be posted. 01:04:10.557 --> 01:04:11.346 LEPAGE, LUKE OK. 01:04:12.090 --> 01:04:14.240 LEPAGE, LUKE Here's all of our contact info. 01:04:14.240 --> 01:04:17.840 Email is always the best way to get in contact with all of us. 01:04:17.840 --> 01:04:23.310 My office is also assisted by national import specialist associate Howard Sue. 01:04:23.310 --> 01:04:29.280 He's actually out at present at training, but we'll be back shortly. 01:04:29.280 --> 01:04:32.020 He's very knowledgeable, so in the event you can't get in touch with me, 01:04:32.020 --> 01:04:33.727 feel free to contact him. 01:04:33.740 --> 01:04:37.710 LEPAGE, LUKE Again, Carl put Dee Millman on his. 01:04:37.710 --> 01:04:40.490 She's also great feel for you to contact her of Carl isn't available. 01:04:40.490 --> 01:04:41.460 LEPAGE, LUKE Uhm. 01:04:45.633 --> 01:04:47.532 LEPAGE, LUKE If you have any questions, 01:04:47.533 --> 01:04:48.880 feel free to put them in the side. 01:04:48.880 --> 01:04:51.000 We'll be on here for a couple of more minutes. 01:04:51.000 --> 01:04:55.680 Umm, if not, I wanna thank everybody for taking the time to listen 01:04:55.680 --> 01:05:01.230 to our presentation and again feel free to reach out if you need anything else. 01:05:14.367 --> 01:05:15.909 LEPAGE, LUKE OK. 01:05:15.910 --> 01:05:18.060 So really quick, we do have one question. 01:05:18.060 --> 01:05:21.940 LEPAGE, LUKE A quick where can we find a good definition 01:05:21.940 --> 01:05:24.970 of part versus accessory? 01:05:27.033 --> 01:05:28.450 LEPAGE, LUKE It's a really good question. 01:05:28.450 --> 01:05:29.660 There are. 01:05:32.632 --> 01:05:36.099 LEPAGE, LUKE There are court cases that that, that dig into that 01:05:36.100 --> 01:05:36.980 and there is. 01:05:40.167 --> 01:05:42.760 LEPAGE, LUKE There are notes that also also handle it. 01:05:42.760 --> 01:05:45.320 The key the key is that. 01:05:45.320 --> 01:05:48.600 LEPAGE, LUKE Can it be used a? 01:05:48.600 --> 01:05:51.450 Is it specifically designed for one machine and if it is? 01:05:51.450 --> 01:05:58.560 LEPAGE, LUKE Can that machine or item work or or function without it? 01:05:58.560 --> 01:05:59.640 Is it critical to what? 01:05:59.640 --> 01:06:02.310 LEPAGE, LUKE To what it is. 01:06:02.310 --> 01:06:06.830 So if you want something a little bit more concrete, please feel free 01:06:06.830 --> 01:06:08.914 to reach out and I can I can form, 01:06:08.915 --> 01:06:11.550 formulate my thoughts a little bit better 01:06:11.550 --> 01:06:14.310 and could you something a little bit more concrete on that. 01:06:14.310 --> 01:06:18.581 LEPAGE, LUKE Can you show slide 42 from Carl's presentation? 01:06:18.599 --> 01:06:20.719 I'll stop sharing mine right now and of Carl, 01:06:20.720 --> 01:06:24.540 you wanna pop years up again you you can. 01:06:42.067 --> 01:06:43.100 MOOSBRUGGER, KARL OK, I'm trying to. 01:06:43.101 --> 01:06:45.281 MOOSBRUGGER, KARL There it is. 01:07:02.140 --> 01:07:06.360 MOOSBRUGGER, KARL OK, here is slide 42 of my presentation. 01:07:15.033 --> 01:07:17.740 MOOSBRUGGER, KARL And also there was somebody? 01:07:17.740 --> 01:07:19.120 Addie asked about the. 01:07:19.120 --> 01:07:23.420 MOOSBRUGGER, KARL Would like the definition of a hash. 01:07:27.233 --> 01:07:28.060 MOOSBRUGGER, KARL I will go back to that in a second. 01:07:35.916 --> 01:07:38.860 MOOSBRUGGER, KARL OK, here is the slide for hash. 01:07:38.860 --> 01:07:40.680 So a hash is like. 01:07:40.680 --> 01:07:45.310 MOOSBRUGGER, KARL 1 hash per second would be 1. 01:07:45.310 --> 01:07:49.650 MOOSBRUGGER, KARL Number that your device. 01:07:49.696 --> 01:07:52.216 MOOSBRUGGER, KARL Guesses for the blockchain, 01:07:53.169 --> 01:07:58.479 but these machines nowadays are measured in mega or gig or terahash. 01:07:58.480 --> 01:07:59.690 MOOSBRUGGER, KARL Umm. 01:07:59.690 --> 01:08:03.060 MOOSBRUGGER, KARL There was a part of my presentation 01:08:03.060 --> 01:08:08.210 where I talked about the current ASIC miners are doing like 50 Tera hashes 01:08:08.210 --> 01:08:15.270 per second, so we're definitely talking like you know, millions of numbers 01:08:15.270 --> 01:08:16.710 that are guessed. 01:08:19.633 --> 01:08:21.923 MOOSBRUGGER, KARL That's all I have for that. 01:08:23.433 --> 01:08:24.610 MOOSBRUGGER, KARL Any more questions? 01:08:31.433 --> 01:08:33.940 MOOSBRUGGER, KARL And 80P of 84, seven one free programmable. 01:08:33.940 --> 01:08:38.030 Ohh, that is the cornerstone of my presentation. 01:08:38.900 --> 01:08:40.360 MOOSBRUGGER, KARL Sorry, I find it really fast. 01:08:40.360 --> 01:08:41.850 MOOSBRUGGER, KARL There we go. 01:08:56.036 --> 01:08:57.830 MOOSBRUGGER, KARL So free programmable machine. 01:09:02.665 --> 01:09:04.140 MOOSBRUGGER, KARL Let me go back one slide. 01:09:10.071 --> 01:09:11.819 MOOSBRUGGER, KARL The best place to start to figure out 01:09:11.820 --> 01:09:15.570 if your machine is free to programmable is to look at the Optrex case. 01:09:15.570 --> 01:09:21.000 The Optrex case defined the freely programmable provisions by same machines 01:09:21.000 --> 01:09:24.920 that operate on fixed programs are not classifiable if for 71. 01:09:24.920 --> 01:09:30.360 MOOSBRUGGER, KARL I talked about the user and what they should be allowed 01:09:30.360 --> 01:09:33.140 to do with their ADP machine. 01:09:33.140 --> 01:09:36.670 If it's freely programmable, which is adding and removing programs, and. 01:09:38.100 --> 01:09:40.670 MOOSBRUGGER, KARL And changing the operating system, things like that. 01:09:40.670 --> 01:09:47.470 So then later on down the road, we have headquarters really 952862. 01:09:47.470 --> 01:09:49.780 MOOSBRUGGER, KARL And that talked about. 01:09:49.780 --> 01:09:54.080 MOOSBRUGGER, KARL A freely programmable DP machine 01:09:54.080 --> 01:09:58.340 and how they are general purpose machines and their purpose is 01:09:58.340 --> 01:10:02.290 to conduct operations like word processing, database management. 01:10:02.290 --> 01:10:05.850 MOOSBRUGGER, KARL You know, I think even video games was mentioned 01:10:05.850 --> 01:10:07.550 on their payroll and general Ledger, so. 01:10:07.550 --> 01:10:10.300 MOOSBRUGGER, KARL Is like a combination of. 01:10:10.300 --> 01:10:13.120 What is what give makes the machine for the programmable 01:10:13.120 --> 01:10:16.510 and it you would just marry up pop tracks. 01:10:16.510 --> 01:10:19.824 The tenants of Optrex with the descriptions put down 01:10:19.825 --> 01:10:21.200 in this headquarters. 01:10:21.200 --> 01:10:22.240 Really internets. 01:10:22.240 --> 01:10:22.470 Really. 01:10:22.470 --> 01:10:28.660 How we define what or how a machine becomes really programmable or not. 01:10:34.900 --> 01:10:37.855 MOOSBRUGGER, KARL Slide 26, here is slide 26. 01:10:40.910 --> 01:10:45.970 MOOSBRUGGER, KARL This is a description of the experience 01:10:45.970 --> 01:10:50.870 where notes for AP System ADP systems consist of a central processing unit, 01:10:50.870 --> 01:10:53.320 which is like your desktop. 01:10:53.320 --> 01:10:55.520 You have the box where the processor and the motherboard and all that. 01:10:55.520 --> 01:11:00.800 MOOSBRUGGER, KARL And 80 system has an input unit 01:11:00.800 --> 01:11:05.950 such as a mouse or keyboard and an AP system has an output unit 01:11:05.950 --> 01:11:07.090 such as a monitor. 01:11:08.190 --> 01:11:11.710 So there is a small little variation that I did not mention 01:11:11.710 --> 01:11:16.530 that says the number 2 and #3 the input and the output can be combined 01:11:16.530 --> 01:11:17.410 into one single unit. 01:11:17.410 --> 01:11:18.460 So you really you could have. 01:11:18.460 --> 01:11:19.660 MOOSBRUGGER, KARL Like a. 01:11:19.675 --> 01:11:22.225 MOOSBRUGGER, KARL A desktop computer. 01:11:23.309 --> 01:11:25.349 MOOSBRUGGER, KARL And a touch screen monitor 01:11:25.350 --> 01:11:29.690 and that would satisfy both the input and the output as well as the processor. 01:11:29.690 --> 01:11:31.820 MOOSBRUGGER, KARL So that is in a nutshell that is. 01:11:31.820 --> 01:11:35.430 MOOSBRUGGER, KARL What an 80P system is. 01:11:43.567 --> 01:11:44.970 MOOSBRUGGER, KARL Video versus mining. 01:11:46.833 --> 01:11:48.730 MOOSBRUGGER, KARL Can you really tell them apart? 01:11:48.730 --> 01:11:51.360 Well, here's the here's the problem with that. 01:11:51.360 --> 01:11:53.520 This is goes out to Mario. 01:11:53.551 --> 01:11:56.441 MOOSBRUGGER, KARL So for the most part. 01:11:57.839 --> 01:12:03.989 MOOSBRUGGER, KARL A GPU is is a part of an AP machine. 01:12:03.990 --> 01:12:10.580 OK, it is the graphics processing that is inserted into onto the motherboard 01:12:10.580 --> 01:12:12.460 and you would connect your monitor up to that 01:12:12.460 --> 01:12:17.060 and it really runs the higher end graphics processing. 01:12:17.060 --> 01:12:19.100 So what happens is. 01:12:19.100 --> 01:12:22.270 MOOSBRUGGER, KARL Because the processing power 01:12:22.270 --> 01:12:26.828 of the GPU is really well suited to generating or the function 01:12:26.829 --> 01:12:29.679 of generating all these random numbers, right? 01:12:29.680 --> 01:12:33.000 MOOSBRUGGER, KARL Somebody along the way figured out that hey, 01:12:33.000 --> 01:12:37.590 GPU's are really good at mining, so they've repurposed 01:12:37.590 --> 01:12:42.770 the graphics processing unit to do mining functions. 01:12:42.770 --> 01:12:47.040 But it doesn't really change the fact that it's a graphics processing unit. 01:12:47.040 --> 01:12:50.130 So the only way that it would be classified. 01:12:50.130 --> 01:12:57.740 MOOSBRUGGER, KARL Differently than an 80P part and 8473 would be. 01:12:57.740 --> 01:13:02.020 MOOSBRUGGER, KARL Two reasons, one being that it was. 01:13:02.020 --> 01:13:05.060 MOOSBRUGGER, KARL It was installed inside of a mining machine. 01:13:05.060 --> 01:13:09.445 OK, if you have a a box with a a controller board 01:13:09.446 --> 01:13:13.230 and 10 GPU's mounted in it, OK, you're not gonna. 01:13:13.230 --> 01:13:15.520 You know, that would no longer be a GP board. 01:13:16.560 --> 01:13:18.870 And then the other reason would be. 01:13:18.870 --> 01:13:23.270 MOOSBRUGGER, KARL Umm, it's been altered or specialized in some way 01:13:23.270 --> 01:13:26.210 that it doesn't operate as a GPU anymore. 01:13:26.210 --> 01:13:28.520 Now it operates as a. 01:13:28.520 --> 01:13:29.790 MOOSBRUGGER, KARL A mining. 01:13:29.790 --> 01:13:33.590 MOOSBRUGGER, KARL Algorithm hash generator for lack of a better word. 01:13:33.590 --> 01:13:34.170 So that's. 01:13:34.196 --> 01:13:38.740 MOOSBRUGGER, KARL A GPU is always going to be 8473 unless it's inserted 01:13:38.740 --> 01:13:41.120 or installed in inside of machine. 01:13:41.120 --> 01:13:43.510 MOOSBRUGGER, KARL And then it's classified with machine 01:13:43.510 --> 01:13:45.320 or if it's been altered. 01:13:45.320 --> 01:13:48.020 MOOSBRUGGER, KARL To the point where it's no longer considered. 01:13:49.100 --> 01:13:51.240 MOOSBRUGGER, KARL A graphics processor but now has 01:13:51.241 --> 01:13:52.850 to be considered a mining. 01:13:55.967 --> 01:13:57.219 MOOSBRUGGER, KARL I hope that answered your quest. 01:14:04.633 --> 01:14:05.333 MOOSBRUGGER, KARL OK. 01:14:05.333 --> 01:14:08.718 MOOSBRUGGER, KARL The presentations will be available shortly. 01:14:08.718 --> 01:14:11.716 I think for the external people, there's some things that have to happen.