CLA-2 CO:R:C:S 557669 WAS
Ms. Cindy Bell
COBE Laboratories, Inc.
1185 Oak Street
Lakewood, Colorado 80215-4407
RE: Eligibility for duty-free treatment under subheading 9817.00.96, HTSUS, of Bicart cartridges from Sweden; parts
Dear Ms. Bell:
This is in reference to your letter dated October 27, 1993,
concerning the eligibility for duty-free treatment under
subheading 9817.00.96, Harmonized Tariff Schedule of the United
States (HTSUS), of Bicart cartridges from Sweden.
FACTS:
You state that the Bicart cartridge is an integral component
of a dialysis machine. The machine's sole function is the
treatment of chronic renal disease through kidney dialysis in
order to relieve the discomfort caused by the disease and allow
persons afflicted by the disease to lead more normal lives. The
cartridge consists of a plastic cartridge filled with 650 grams
of sodium bicarbonate powder (USP and Eur Ph. Grade). The powder
mixes with sterile solution during the dialysis process to
facilitate the removal of impurities from the blood. You have
enclosed literature on the Bicart cartridge for our review.
ISSUE:
Whether the bicart cartridge is eligible for duty-free
treatment under subheading 9817.00.96, HTSUS, when entered into
the U.S.
LAW AND ANALYSIS:
Annex E of the Nairobi Protocol to the Agreement on the
Importation of Educational, Scientific, and Cultural Materials
Act of 1982, established duty-free treatment for certain articles
for the handicapped. The primary focus for this agreement was to
facilitate the international distribution of articles for the
educational, scientific, or cultural advancement of the
handicapped. Presidential Proclamation 5978 and Section 1121 of
the Omnibus Trade and Competitiveness Act of 1988, provided for
the implementation of the Nairobi Protocol (Annex E) ("Nairobi
Protocol") under subheading 9817.00.92, 9817.00.94, and
9817.00.96, HTSUS. These tariff provisions specifically state
that "[a]rticles 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.
The proper classification of the bicart cartridges is in
subheading 9018.90.7070, HTSUS, which provides for "[i]nstruments
and appliances used in medical, surgical, dental or veterinary
sciences, . . . Other instruments and appliances and parts and
accessories thereof: Other: Electro-medical instruments and
appliances and parts and accessories thereof: Other: Parts and
accessories of dialysis instruments and apparatus."
U.S. Note 4(a), subchapter XVII, Chapter 98, HTSUS, states
that, "the term 'blind or other physically or mentally
handicapped persons' includes any person suffering from a
permanent or chronic physical or mental impairment which
substantially limits one or more major life activities, such as
caring for one's self, performing manual tasks, walking, seeing,
hearing, speaking, breathing, learning, or working." Clearly,
individuals who suffer from kidney failure are physically
handicapped as defined by this tariff provision.
Customs has previously ruled that the subheadings which
encompass the Nairobi Protocol apply to "articles" and not
"parts" of articles. See Headquarters Ruling Letters (HRLs)
087559 dated October 9, 1990, and 086303 dated February 13, 1990.
The conclusions reached in these rulings were simply a
restatement of 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. App.
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 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. 56851
(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
modified this standard over the years.
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. United
States, 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. United States, 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.
We are of the opinion that the bicart cartridges in their
condition as imported are parts and, therefore, are ineligible
for duty-free treatment under subheading 9817.00.96, HTSUS. The
cartridges are classified in a subheading which provides for
parts of dialysis machines. Moreover, the bicart cartridge is an
integral component of the dialysis machine, without which the
machine could not function. The literature describing the
operation of the bicart cartridge states that "[w]hen attached to
the holder, the bicart becomes integrated with the continuous
fluid flow-path." When attached to the dialysis machine, water
from the fluid monitor passes through the bicart cartridge, thus
producing a saturated bicarbonate solution, which during the
dialysis process facilitates the removal of impurities from the
blood. There is no separateness of identity between the
cartridge and the dialysis machine; the cartridge cannot function
without being integrated into the machine.
You claim that you are entitled to duty-free treatment under
9817.00.96, HTSUS, based on the recent case Travenol
Laboratories, Inc. v. United States, Slip Op. 93-15 dated
February 24, 1993 (27 Cust. Bull. 1). In Travenol, the plaintiff
imported medical devices used in dialysis treatments of
individuals with End-stage renal Disease. The plaintiff claimed
that the merchandise was entitled to duty-free entry under the
Nairobi Protocol as "articles specially designed or adapted for
the use and benefit of the blind or other physically or mentally
handicapped persons." Customs argued that the medical devices
were "therapeutic" articles which are specifically excluded from
receiving duty-free treatment under the Nairobi Protocol.
In rendering its decision, the court in Travenol followed
the reasoning in Richards Medical Company v. United States, 13
CIT 519, 720 F. Supp. 998 (19890, aff'd, 910 F.2d 828 (Fed. Cir.
1990), and found that although there was evidence to support the
finding that kidney dialysis is life-sustaining, that process was
not "curative", which is the standard the courts have chosen to
equate with the tariff meaning of "therapeutic." Therefore, the
court held that the imported articles were entitled to duty-free
treatment. In Travenol, unlike the instant case, the entire
electric dialysis machine was being imported into the U.S.
Therefore, the court did not address the question of whether a
"part" of a dialysis machine, if imported separately, would
qualify for duty-free treatment under the Nairobi Protocol.
Therefore, we do not believe that the Travenol case stands for
the proposition that "parts" of dialysis machines are entitled to
the same duty-free treatment under this provision as the entire
dialysis machine.
HOLDING:
The proper classification of the bicart cartridges is in
subheading 9018.90.7070, HTSUS, which provides for "[i]nstruments
and appliances used in medical, surgical, dental or veterinary
sciences, . . . Other instruments and appliances and parts and
accessories thereof: Other: Electro-medical instruments and
appliances and parts and accessories thereof: Other: Parts and
accessories of dialysis instruments and apparatus," dutiable at a
rate of 4.2 percent ad valorem. As the bicart cartridges
constitute parts of dialysis machines, they are not eligible for
duty-free treatment under subheading 9817.00.96, HTSUS.
Sincerely,
John Durant, Director
Commercial Rulings Division