How should the HS CODES for communication devices like Galaxy smartphones and Galaxy Notes, and Tablet PC products like Galaxy Tabs be classified respectively? Released

We will provide a detailed explanation of the HS CODE classification for communication devices such as Galaxy smartphones and Galaxy Note, and tablet PC products like Galaxy Tab. The internationally recognized HS CODE (Harmonized System Code), which is a global unified system for classifying goods, assigns a unique number to all goods traded internationally, serving as a standard for applying customs duties, statistics, and regulations.

1. Galaxy Smartphones and Galaxy Note (Communication Devices)

Galaxy smartphones and Galaxy Note series are fundamentally classified as communication devices that perform the essential functions of 'Telephones'. Accordingly, they are classified under HS CODE 8517, and notably, the revised HS (HS2022) in 2022 established a specific subheading for smartphones, reflecting their technological advancements and market importance.

HS CODE: 8517.13-0000 (Smartphones)

Heading 8517 covers 'Telephones, including telephones for cellular networks or other wireless networks; other apparatus for the transmission or reception of voice, images or other data, including apparatus for communication in a wired or wireless network, etc.'. Smartphones, based on cellular networks, perform complex functions such as voice calls, internet access through data communication, and utilization of various applications. In the past, they were classified under subheadings covering mobile phones. However, as they acquired distinct characteristics from ordinary mobile phones, such as large touchscreen displays, high-performance operating systems (OS), and extensive app ecosystems, HS2022 established the specific subheading (8517.13) with the designation 'smartphones,' allowing for clearer classification. This is a result of international agreement aimed at ensuring the global dissemination of smartphones and the accuracy of trade statistics.

2. Galaxy Tab (Tablet PC)

Tablet PCs like the Galaxy Tab are classified as 'Automatic Data Processing Machines'. This is based on the provisions of Note 6 to Chapter 84.

HS CODE: 8471.30-0000 (Portable Automatic Data Processing Machines)

Heading 8471 includes 'Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, etc.'. A tablet PC is a form of computer emphasizing portability, performing core functions of an automatic data processing machine such as running various software based on an operating system (OS), data processing and storage, web browsing, and multimedia consumption. Although it can be equipped with Wi-Fi or cellular data communication modules for internet access, and some models may support voice call functions (such as VoIP), these functions are auxiliary, and the essential characteristic of the device lies in data processing and computation.

Specifically, Note 6 to Chapter 84 states the general principle that "Machines incorporating two or more functional units, which are capable of being classified in different headings, are to be classified in the heading appropriate to that unit which performs the principal function, unless otherwise specified." This indicates that the core function should be the criterion for classifying automatic data processing machines like computers. In the case of tablet PCs, information processing is the primary role rather than telephone communication, thus classifying them under Heading 8471 is appropriate.

3. Importance and Considerations of HS CODE Classification

Despite having similar forms and some overlapping functions, smartphones and tablet PCs are classified under entirely different headings in the HS CODE system. This is in accordance with the fundamental HS principle of classification based on the 'Primary Function' and 'Essential Character' of each device.

Accurate HS CODE classification is crucial in several aspects, including the following:

• Application of Customs Duties: Since each HS CODE has a different customs duty rate, incorrect classification can lead to paying unnecessary duties or risks of additional tax imposition later on.
• Import/Export Requirements and Regulations: As statutory obligations (e.g., KC certification, Radio Waves Act, etc.) vary by item, accurate classification is a crucial first step for legal compliance.
• Utilization of Free Trade Agreements (FTA): The criteria for determining origin to receive FTA preferential tariffs differ by HS CODE, so accurate classification must precede.
• Accuracy of Trade Statistics: Accurate classification serves as fundamental data necessary for national industrial policy formulation and trade trend analysis, thus contributing to public interest.

In addition to the product categories you inquired about, various electronic devices such as smartwatches, foldable phones, and hybrid laptops have recently been released, making professional review of HS CODE classification even more crucial. With each new product launch or addition of new features, it is important to meticulously analyze the essential functions and characteristics of the product to determine the correct HS CODE.

In conclusion, we inform you that Galaxy smartphones and Notes are classified as communication devices under 8517.13-0000, and tablet PCs like the Galaxy Tab are classified as automatic data processing machines under 8471.30-0000.