COMMITTEE - O. Fr. 16th Session - H9-3. DISTINCTION BETWEEN OPTICAL FIBRE CABLES OF HEADINGS AND (Item IX.

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1 HARMONIZED SYSTEM E COMMITTEE - O. Fr. 16th Session - H9-3 Brussels, 16 October DISTINCTION BETWEEN OPTICAL FIBRE CABLES OF HEADINGS AND (Item IX.25 on Agenda) 1. The Secretariat has received the following Note from the *** (***) concerning the Harmonized System classification of optical fibre cables of headings and I. NOTE BY THE*** "Classification in the HS of optical fibre cables of headings and The problem A. Headings concerned : "optical fibre cables, made up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors" "optical fibre cables other than those of heading No ". B. Description of the issue File No For reasons of economy, documents are printed in limited number. Delegates are kindly asked to bring their copies to meetings and not to request additional copies.

2 3. What the Customs Co-operation Council wanted to do when the HS was set up was to include among optical elements optical fibre cables for transmitting images, whereas heading was to classify optical fibre cables designed for telecommunications with traditional electrical cables. 4. It seemed then that the distinguishing criterion could be taken to be the individual sheathing of the fibres making up the cables; cables with fibres sheathed in this way were for use in telecommunications, whereas the other types of cables were supposed to allow only the sending of light rays in order to transmit an image or light. 5. According to*** experts, this criterion was not sufficient to allow a very clear distinction between these two types of cables for telecommunications and for image transmission. 6. Some telecommunications cables do not necessarily have the individual fibres sheathed. They may, for instance, be placed in simple protective grooves, with the whole being covered by a protective sheath. 7. It also appears that the term "sheathing" can create confusion in that many fibres, irrespective of whether they are designed for telecommunications, have a very fine "primary coating" which protects them. This coating is already a sort of "sheath" [in the "protection" sense of the term] in the view of the experts, even though the fibre and its coating will have a further plastic covering. 8. This means that certain cables, the fibres of which have a simple primary coating, must be included under heading 90.01, but if the primary coating of the fibres making up the cables is likened to sheaths, then they could come under heading In view of the profession's need for reliable statistics, a clear distinction should be made in the Nomenclature between the identity of the two families of products, which draw on widely differing technologies and are put to separate uses. Proposal Draft Explanatory Notes 10. In view of the reservation expressed by the *** regarding the plan to amend the wording of headings and as part of the revision of the HS 2.

3 and in order to clarify the content of these headings, the*** proposes that the following Explanatory Notes be inserted : The penultimate paragraph of the Explanatory Notes, on page 1404, should be replaced by two new paragraphs : "In addition the heading covers optic fibre cables, made up of optic fibres with a protective primary (buffer) coating placed in a protective mounting, used to transmit optic signals conveying analogue modulated or digitally coded information, whether or not assembled with electric conductors or fitted with connectors. The optic fibres used in making the cables falling within this heading usually have a core/cladding ratio of less than 0.8." The second paragraph of Part (A) of the Explanatory Notes to the HS, on page 1459, should be amended as follows : "Optical fibre bundles are a set of optical fibres used to send light rays in the visible spectrum in order to transmit an image or light; they may be rigid, in which case the fibres are agglomerated by a binder along their full length, or they may be flexible, in which case they are bound only at their ends. If coherently bundled, they are used for transmission of images, but if randomly bundled, they are suitable only for transmission of light for illumination or decorative purposes." II. SECRETARIAT COMMENTS 11. Before examining this proposal, the Secretariat would point out that, at its 50th Session in April 1983, the Nomenclature Committee approved the Harmonized System Committee's decision to classify in heading all optical fibre cables other than those used for transmitting images, which would remain in heading According to information obtained at that time from trade circles, cables for the transmission of data using optical waveguides are made of the fibres, each of which is individually sheathed with plastic to protect it optically and mechanically; that is not the case with cables used for the transmission of images. On the basis of that information, the text of 3.

4 heading was worded in such a way as to make clear that it covered optical fibre cables, made up of individually sheathed fibres (see Annex 1 hereto). 12. The Secretariat would also point out that, at the Review Sub-Committee's Third Session in September 1990, it was reported that the trend in the manufacture of optical cables for the transmission of information was towards covering them with a protective layer of plastics, by a dipping or spraying process rather than sheathing them. A sample of an optical cable for telecommunications had been presented, showing that the cable consisted of four optical fibres which were covered with a protective layer or primary coating (see paragraph 8 above) of plastics, and were placed in a common sheathing and not in individual sheaths (see Annex 2 hereto). 13. At the Sub-Committee's Third Session, it has also been pointed out that optical fibres for the transmission of information differed from other optical fibres in respect of certain technical characteristics : (a) Optical fibres for the transmission of information were made of crystal glass, whereas optical fibres for optical apparatus were made of plastics or other glass; (b) The "attenuation coefficient (i.e. the rate of reduction of light quality in the optical fibre) was less than 4 db/km 1 in the case of optical fibres for the transmission of information, and several dozen db/km in the case of optical fibres for optical apparatus; (c) Optical fibres for the transmission of information were manufactured by drawing the crystal glass, whereas optical fibres for optical apparatus were nozzleprojected. 14. Persuaded that the text of heading no longer covered all optical cables for the transmission of information, the Sub-Committee finally decided to transfer optical fibre cables from heading to Chapter 90, and to create a new subheading for those cables in heading That draft, approved by the HS Committee, was nevertheless rejected on account of the reservation entered at the time by the*** (see paragraph 10 above). 1 According to more recent data from trade circles, the attenuation coefficient for optical fibres is 0.2 to 0.3 db/km in the case of fibres for telecommunications, and 3 db/km or less for the transmission of information. 4.

5 15. Returning to this question and emphasizing the industry's need for reliable international trade statistics in respect of optical fibre cables, the*** proposes that the Explanatory Notes to headings and be amended, to establish a clear distinction between the two headings. 16. While sharing the***'s concern about the credibility of international trade statistics, the Secretariat questions whether a distinction can be established in the Nomenclature by means of the Explanatory Notes. In this respect, General Interpretative Rule 1 stipulates that "for legal purposes, classification shall be determined according to the terms of the headings and any relative Section or Chapter Notes". In other words, the Explanatory Notes can neither extend nor restrict the scope of a heading. 17. However, the***'s proposed amendment to the Explanatory Note to heading (see paragraph 10.1 above) would appear to group, in that heading, all optical fibre cables for the transmission of information, even those where the fibres of the cables concerned are not individually sheathed. And yet, the presence of an individual sheath around the optical fibre is the sole criterion allowing the optical fibre to be classified in heading Moreover, the proposed text indicates that the cables of that heading are intended for the transmission of information, whereas no such criterion appears at present in the text of heading Indeed, the proposed text could lead to the misclassification in heading of optical cables which are intended for the transmission of information but whose optical fibres are not individually sheathed. That would be the case if cables of heading 90.01, intended for telecommunications, are classified in heading under the terms of the proposed Explanatory Notes. 18. The***'s concern would seem to be about optical fibre cables for the transmission of information, which are not individually sheathed. In this connection, paragraph 7 above refers to the possibility of the primary coating (around the optical fibre) being regarded as a sheath, which could justify classification in heading However, given that the authors of the HS wanted to give separate status in heading to optical fibre cables for the transmission of information and in view of the considerable statistical importance of these articles for the industry concerned (see paragraph 9 above), it would be useful to group these articles together, particularly as that would seem justified by the technical progress made in the field. This would also ensure uniform classification of such articles. However, the***'s proposal to amend the Explanatory Notes to headings and does nothing to 5.

6 change the classification of those articles; in other words, it does not allow all these cables to be classified in heading 85.44, the scope of which is, for legal purposes, determined by the heading text which states, inter alia, "made up of individually sheathed fibres". 20. In the light of the foregoing, the Secretariat feels that it is first necessary to amend the legal texts, particularly the text of heading 85.44; in this connection, the technical characteristics set out in paragraph 13 above could be used to identify optical cables for the transmission of information. 21. Finally, it should be noted that the above comments are based on the opinion that the primary coating does not constitute a sheath. However, it is possible that certain administrations may regard that coating as a sheath and may classify the cables at Annex 2 in heading III. CONCLUSION 22. The Committee is invited to examine the***'s proposal in paragraph 10 (10.1 and 10.2) above, taking account of the***'s Note and the Secretariat's comments in paragraphs 2 to 9 and 11 to 20 respectively, and to decide what action should be taken in respect of this matter. X X X 6.

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