CLA-2 CO:R:C:S 555965 SER
Area Director of Customs
110 S. 4th Street
Room 137
Minneapolis, MN 55401
RE: Protest No. 3501-0-000069, contesting denial of duty-free
treatment for hearing aid programming units, under item
870.67, TSUS; Nairobi Protocol
Dear Sir:
The above-referenced protest, filed by Coleman, Hull & Van
Vliet (formerly Timmer & Van Vliet), on behalf of Maico Hearing
Instruments, Inc., contests the assessment of duties by your
office on hearing aid programming units under item 709.17, Tariff
Schedules of the United States (TSUS). The merchandise at issue
was imported on July 30, 1988.
FACTS:
The merchandise at issue consists of programming units,
known as PX8 programming units, made by the Phox company which
set the frequency parameters of specific Phox company digital
hearing aids. The parameters which are set by the programming
units include overall hearing aid amplification as well as
specific amplification settings at several frequencies to
compensate for the client's particular hearing loss. In
addition, if the individual's hearing loss changes, the hearing
aid can be reprogrammed by the PX8 programming units to meet the
new hearing requirements of an individual.
Protestant claims that these items are eligible for duty-
free treatment under item 870.67, TSUS, which provides, in
pertinent part, for duty-free treatment of articles specially
designed or adapted for the use or benefit of the physically
handicapped.
ISSUE:
Whether the merchandise at issue constitute "parts", and,
therefore, is ineligible for duty-free treatment under item
870.67, TSUS.n -2-
LAW AND ANALYSIS:
The Nairobi Protocol to the Agreement on the Importation of
Educational, Scientific, and Cultural Materials Act of 1982,
established the duty-free treatment of certain articles for the
handicapped. Initially, Congress enacted this provision in the
Trade and Tariff Act of 1982, and Presidential Proclamation 5201
implemented this agreement in item 960.15, Tariff Schedule of the
United States (TSUS). This was a temporary provision which
expired on August 11, 1985. It was re-enacted under item 870.67,
TSUS, by section 1121 of the Omnibus Trade and Competitiveness
Act of 1988, and made retroactive to August 12, 1985. Section
1121 of the Omnibus Trade and Competitiveness Act of 1988 and
Presidential Proclamation 5978 also provided for the
implementation of the Nairobi Protocol into subheadings
9817.00.92, 9817.00.94, and 9817.00.96 of the Harmonized Tariff
Schedule of the United States Annotated (HTSUSA). These tariff
provisions specifically state that "articles specially designed
or adapted for the use or benefit of the blind or other
physically or mentally handicapped persons" are eligible for
duty-free treatment.
Customs has ruled that the tariff provisions which
encompass the Nairobi Protocol apply to "articles" and not
"parts" of articles. See, Headquarters Ruling Letters (HRLs)
086303 dated February 13, 1990, and 087559 dated October 9, 1990.
The issue of whether the programming units were "parts" arose as
a result of statements by the importer that the hearing aids of
which the programmers would be utilized, will not function unless
they are programmed by the PX8 programming units. In addition,
the programming units were stated to be used exclusively in
conjunction with the Phox hearing aids. Consistent with the
traditional rule for what constitutes a "part" under Customs law,
these statements clearly raised the question of whether the
programmers would fall within the parameters of the "parts"
definition.
Counsel for the protestant argues that there is no
foundation for Customs separate treatment of "parts" and
"articles", and erroneously states that our basis for the
separation is the case, Richards Medical Company v. United
States, 720 F.Supp. 988 (CIT 1989), aff'd 910 F.2d 828 (Fed. Cir.
1990), which was discussed in an internal memorandum. The sole
issue discussed in the Richards Medical case, however, was the
definition of "therapeutic" within the context of the relevant
tariff provisions. Furthermore, the internal memorandum (085261
dated October 31, 1989) cited by counsel in his submission
involved a two-part discussion: (1) What is the definition of
"therapeutic" as discussed in the Richards Medical case; and (2)
Whether the tariff provisions implementing the Nairobi Protocol
cover parts of articles for the handicapped. n-3-
Customs position concerning "parts" is based on the well
established principle of Customs law, reiterated by the courts,
"that a tariff provision which does not specifically provide for
parts does not include parts." Westminster Corp. v. United
States, 432 F.Supp. 1055, 1058 (1977), Glass Products, Inc. v.
United States, 641 F.Supp. 813, 815 (CIT 1986), Murphy & Co. v.
United States, 13 Ct.Cust. Appls. 256, T.D.41201 (1925). As the
Court in Westminster further elaborated, "Congress, in enacting
legislation, would have provided for parts in [a] provision had
it so intended."
Whether particular merchandise is considered a "part" for
tariff purposes has been the subject of voluminous judicial
examination. The traditional rule in this regard is "that a
'part' of an article is something necessary to the completion of
that article. It is an integral part, ..., without which the
article to which it is joined could not function as such
article." United States v. Willoughby Camera Stores, Inc., 21
CCPA 332, T.D. 46851 (1933), cert. denied, 292 U.S. 640, 54 S.Ct.
773, 78 L.Ed. 1492 (1933). However, since a determination
regarding whether an item constitutes a part is highly fact
specific, the courts have greatly modified this standard over the
years.
With regard to the programming units at issue, the fact that
the programming unit is used in conjunction with the hearing aids
and that the hearing aid needs the programming unit to initially
function does not establish that the programming unit is a
"part". The courts have held that "the mere fact that two
articles are designed to be used together is not alone sufficient
to establish that either is a part of the other, or of their
combined entity." Westfield Manufacturing Company v. U.S., 191
F.Supp. 578 (1961). In addition, the courts have stated that
"[m]any ... objects, despite the fact that their usefulness is
only in conjunction with other articles, retain a separateness of
identity and a functional self-sufficiency which preclude their
classification as parts. Furthermore, if an article possesses
the characteristics of a completely finished and self contained
object ...," it will not be considered a "part". Schick X-Ray
Co. v. U.S. 271 F.Supp. 305 (1967). Similarly, Customs has held
that a "part" must be identifiable by shape or other
characteristics as an article solely or principally used as a
"part". See, HRL 086835 dated April 17, 1990.
Consistent with these holdings, it is our opinion that the
programming units do not constitute a "part". Although, it is
used in conjunction with the hearing aids it is a completely
finished and self-contained object with a recognizable separate
identity. The programming units are operationally functionally
self-sufficient and does not undergo any further manufacture or
manipulation after importation into the United States. Inn-4-
addition, the programmer is not the type of article that is
identified as an article principally used as a part. Although
the hearing aid cannot function until it is programmed, once the
hearing aid is programmed, the programming units are not needed
for the continuous and independent functioning of the hearing
aids for their intended purpose. Therefore, the Phox PX8
programming units would not be considered "parts" and would be
eligible for duty-free treatment under subheading 9817.00.96,
HTSUSA.
HOLDING:
The programming units at issue are articles specially
designed for the use or benefit of the physically handicapped and
would not be precluded from duty-free treatment under item
870.67, TSUS, currently subheading 9817.00.96, HTSUSA, on the
basis of the exclusions of parts for this special treatment.
Accordingly, you should grant this protest in full. A copy of
this decision should be attached to the Customs Form 19 to be
returned to the protestant.
Sincerely,
John Durant, Director