US embassy cable - 04TAIPEI3728

UNCLAS TAIPEI 003728 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON, ETRD, EIND 
SUBJECT: TAIWAN MULLING OVER THERMISTOR CLASSIFICATION 
 
REF: SECSTATE 243653 
 
 1.  Summary:  AIT Econ Chief delivered reftel demarche to 
Ministry of Economic Affairs Vice Minister Steve Chen on 
November 17, 2004.  Chen was familiar with the case and said 
that Taiwan has about a month before it would need to submit 
a report to the World Customs Organization.  Apparently, 
Taiwan has yet to make a final determination on the proper 
classification of the Tyco thermistors.  End Summary. 
 
2.  On November 17, 2004, AIT Econ Chief used a previously 
scheduled meeting with Ministry of Economic Affairs Vice 
Minister Chen Ruey-long (Steve Chen) to deliver reftel 
demarche regarding Tyco's appeal of Taiwan Customs' 
classification of its electronic thermistor devices.  Even 
though we had not been able to give Chen advance notice of 
this topic, he was clearly familiar with the issues involved. 
 
 
3.  Citing the relevant Harmonized System tariff numbers from 
memory, he noted that the World Customs Organization had 
recommended that the devices be classified as resistors, but 
added that the WCO has some divergent views on this issue. 
As he explained it, the WCO recommends classifying the 
devices under HS 8533, but also believes that a case can be 
made for classifying them under HS 8536. 
 
4.  Chen said that he had chaired a recent meeting with the 
Ministry of Finance and Customs about Tyco's appeal of 
Customs' classification of the devices.  Clearly aware of 
Taiwan's obligations to respond to WCO rulings, Chen said 
that he has asked Taiwan Customs to review the case.  If 
Customs continues to believe that the devices should be 
classified as fuses rather than resistors, then he has 
requested Customs to prepare a report for the WCO explaining 
this decision.  Chen said that Taiwan has a two month period 
in which to provide comments to WCO and has about one month 
left before the report is due.  We expect that Taiwan will 
use the full two months to mull over this classification 
decision. 
 
5.  Finally, Chen noted that the issue is complicated by the 
fact that a Taiwan company has filed a case against Taiwan 
Customs over classification of the devices.  He also noted 
that a fine of some type has been levied against Tyco and 
that Tyco believes the fine is unjustified. 
PAAL