OT:RR:CTF:VS H292642 YAG
Ms. Kerry Caban
PVH Corp.
200 Madison Avenue
New York, NY 10016
RE: Ruling Request; Style #7177906637 (Girl’s Adaptive Polyester Knit Dress); Style #7177097 and Style #7177098 (Girl’s Adaptive Skinny Jeans); Subheading 9817.00.96, HTSUS
Dear Ms. Caban:
This is in response to your correspondence, dated October 24, 2017, in which you request prospective rulings concerning the applicability of subheading 9817.00.96, Harmonized Tariff Schedule of the United States (“HTSUS”), to three garments from PVH Corp.’s (“PVH”) “adaptive clothing” line. Your ruling requests and samples, addressed to the National Commodity Specialist Division (“NCSD”), were forwarded to our office. Two telephone conferences were held on February 12, 2018, and March 1, 2018, during which you further explained the product. On February 12, 2018, March 1, 2018, and March 8, 2018, supplemental submissions were provided to our office.
FACTS:
PVH is one of the largest apparel companies in the world that owns the following brands: Calvin Klein, IZOD, Van Heusen, ARROW, Speedo, Warner’s, Olga, True&Co., and Tommy Hilfiger. At issue in this case are three imported garments from the Tommy Hilfiger “adaptive clothing line for the differently abled.” PVH states that the goal of this clothing line is “to offer branded fashionable clothing to the underserved community of the differently-abled consumer in the United States.” PVH states that “it [PVH] wants to assist this community to act more independently and feel included by being able to dress in the same way as the able-bodied consumer.” PVH’s descriptions of the garments indicate that they have been “adapted from the main line of Tommy Hilfiger clothes.” PVH states that the garments are available for sale initially only at tommy.com. Later, through a partnership with the New Jersey Special Olympics, the garments might be offered for sale at pop-up shops at the Special Olympics and Paralympics. PVH provided this office with extensive information how this line of clothing has been developed, designed, and marketed for use by differently-abled consumers.
The merchandise consists of the following garments:
Girl’s Adaptive Polyester Knit Dress
This garment (Style No. 7177906637) is a girl’s adaptive 97% polyester, 3% elastane knit dress. This dress has been adapted from the main holiday line of Tommy Hilfiger Kids. The dress has an approximately 11-inch opening in the back with eight magnets for easy closure in the “magna-click” style. PVH claims that the back opening is larger in this adapted version of the dress; however, it is not clear how much larger the opening is. Sewn on the outside of the garment are 4 non-functional buttons. PVH states that this type of opening allows the differently abled to put the dress over their head and close the opening on their own. The retail price of the garment will be $45.50. According to PVH, the cost of modifications added to the cost of the main line is $2.25.
Girl’s Adaptive Skinny Jeans
Style #7177097 is a girl’s 77% cotton, 21% polyester, 2% lycra skinny jeans. The tight fitting pull-on style denim pant has no opening at the waist and features a 1 ½ inch wide tunnel elastic waistband; faux front pockets and front fly; two functional rear pockets; and, long, hemmed legs. This garment has an approximately 11-inch opening at the bottom of each leg on the outside seam secured with a total of sixteen hidden magnets, which allow the wearer to open out the seams in order to put the jeans over braces and prosthetics, as well as to have access to the lower leg and device(s). The sixteen magnets are also in the “magna-click” style.
Style #7177098 is a girl’s 80% cotton, 19% polyester, 1% spandex skinny jeans, identified as “Jegging Fit Jean.” The tight fitting pull-on style jeans have no opening at the waist and feature a 1 ½ inch wide tunnel elastic waistband; faux front pockets and a front fly; two functional rear pockets; long, hemmed legs with internal elastic loops at the bottom hem on both the inside and outside seam; and, two buttons located 2 ½ inches and two at 4 ¼ inches from the hemmed bottom on the inside of the pant leg. To adjust the length of the pant leg, the buttons are inserted inside the elastic loop. PVH states that this garment “allows the wearer to “self-hem” the length of each leg separately to meet the needs of those with dissimilar leg lengths. The buttons ensure that the hems will not fall and create a tripping danger. PVH states that the retail price of both garments will be $49.50, and the cost of modifications added to the main line product is $5.22 and $2.13 for each style. PVH claims that for certain garments the overall design would also need to be altered in addition to magnets and/or zippers; however, no additional information was provided to indicate how exactly the design for these particular garments was altered for the adaptive clothing line.
PVH states that each of these garments was “specially designed or adapted” for the use of the handicapped and, thus, is entitled to duty-free treatment under subheading 9817.00.96, HTSUS.
ISSUE:
Whether the subject girls’ adaptive skinny jeans and polyester knit dress are eligible for duty-free treatment under subheading 9817.00.96, HTSUS.
LAW AND ANALYSIS:
Congress passed the Educational, Scientific, and Cultural Materials Importation Act of 1982, Pub. L. No. 97-446, 96 Stat. 2329, 2346 (1983), and the Omnibus Trade and Competitiveness Act of 1988, Pub. L. No. 100-418, 102 Stat. 1107 (1988), to implement the Nairobi Protocol to the Florence Agreement on the Importation of Educational, Scientific and Cultural Materials (“Nairobi Protocol”), an international agreement intended to provide “duty free treatment to articles for the use or benefit of the physically or mentally handicapped persons, in addition to articles for the blind.” See also U.S. Customs Serv. Implementation of the Duty-Free Provisions of the Nairobi Protocol, Annex E, to the Florence Agreement, T.D. 92-77, 26 Cust. B. & Dec. 240, 241 (1992) (“Implementation of the Nairobi Protocol”). Presidential Proclamation 5978 and Section 1121 of the Omnibus Trade and Competitiveness Act of 1988, provided for the implementation of the Nairobi Protocol into subheadings 9817.00.92, 9817.00.94, and 9817.00.96, HTSUS. Therefore, this legislation eliminated duties for products covered by subheading 9817.00.96, HTSUS, which provides for:
articles specially designed or adapted for the use or benefit of the blind or other physically or mentally handicapped persons; parts and accessories (except parts and accessories of braces and artificial limb prosthetics) that are specially designed or adapted for use in the foregoing articles . . . Other.”
See subheading 9817.00.96, HTSUS; see also Sigvaris, Inc. v. United States, 227 F. Supp. 3d 1327, 1335 (2017). Subheading 9817.00.96 excludes “(i) articles for acute or transient disability; (ii) spectacles, dentures, and cosmetic articles for individuals not substantially disabled; (iii) therapeutic and diagnostic articles; or, (iv) medicine or drugs.” U.S. Note 4(b), Subchapter XVII, Chapter 98, HTSUS.
As the language of this provision indicates, classification within subheading 9817.00.96, HTSUS, depends on whether the article in question is “specially designed or adapted for the use or benefit of the blind or physically and mentally handicapped persons,” and whether it falls within any of the enumerated exclusions. See subheading 9817.00.96, HTSUS; U.S. Note 4(b), Subchapter XVII, Chapter 98, HTSUS. Note 4(a) to Chapter 98, HTSUS, provides:
(a) For purposes of subheadings 9817.00.92, 9817.00.94 and 9817.00.96, 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.
U.S. Note 4(a), Subchapter XVII, Chapter 98, HTSUS. This list of exemplar activities indicates that the term “handicapped persons” is to be liberally construed so as to encompass a wide range of conditions, provided the condition substantially interferes with a person’s ability to perform an essential daily task. See Sigvaris, 227 F. Supp. 3d at 1335. While the HTSUS and subchapter notes do not provide a proper definition of “substantial” limitation, the inclusion of the word “substantially” denotes that the limitation must be “considerable in amount” or “to a large degree.” Id. at 1335 (citing Webster’s at 2280).
Further, the language of subheading 9817.00.96, HTSUS, states that the provision provides for “articles specially designed or adapted” for the use or benefit of the physically handicapped. The design and construction of an article may be indicative of whether is it specially designed or adapted for the use or benefit of the handicapped. The HTSUS does not establish a clear definition of what constitutes “specially designed or adapted for the use or benefit” of handicapped persons. In the absence of a clear definition, the Court of the International Trade stated that it may rely upon its own understanding of the terms or consult dictionaries and other reliable information. See Danze, Inc. v. United States, Slip Op. 18-69 (Ct. Int’l Trade 2018). Moreover, in analyzing this same provision in Sigvaris v. United States, the court construed these operative words as follows:
The term “specially” is synonymous with “particularly,” which is defined as “to an extent greater than in other cases or towards others.” [Webster’s] at 1647, 2186 . . . The dictionary definition for “designed” is something that is “done, performed, or made with purpose and intent often despite an appearance of being accidental, spontaneous, or natural.” [Webster’s] at 612 . . . .
See Sigvaris, 227 F. Supp. 3d at 1336.
The legislative history further aids our analysis of these terms as used in subheading 9817.00.96, HTSUS. The Senate stated in its Report that one of the goals of this law was to benefit the handicapped and show U.S. support for the rights of the handicapped. The Senate stated, in relevant part:
By providing for duty-free treatment of articles specially adapted for the blind or other physically or mentally handicapped persons, the committee does not intend that an insignificant adaptation would result in duty-free treatment for an entire relatively expensive article. Otherwise, the special tariff category will create incentives for commercially motivated tariff-avoidance schemes and pre-import and post-entry manipulation. Rather, the committee intends that, in order for an entire modified article to be accorded duty-free treatment, the modification or adaptation must be significant, so as clearly to render the article for use by handicapped persons.
S. Rep. No. 97 564, 97th Cong. 2nd Sess. (1982). The Senate was concerned that persons would misuse this tariff provision to avoid paying duties on expensive products. Similarly, in Danze v. United States, the court looked to the legislative history and noted that its interpretation of the terms “specially” and “designed” in Sigvaris comported with the legislative intent behind subheading 9817.00.96, HTSUS, that any modification or adaptation be “significant.” Specifically, the court in Danze stated:
“articles specially designed for handicapped persons must be made with the specific purpose and intent to be used by or benefit handicapped persons rather than the general public.” Sigvaris, 227 F. Supp. 3d at 1336. Any adaptation or modification to an article to render it for use or benefit by handicapped persons must be significant.
See Danze at 14.
CBP finds that the girls’ adaptive skinny jeans and polyester knit dress at issue are not specially designed or adapted articles. CBP examines merchandise in its condition as imported. See Headquarters Ruling Letter (“HQ”) H185799, dated April 11, 2013; and, HQ H068277, dated December 30, 2010.
CBP has recognized several factors to be utilized and weighed against each other on a case-by-case basis when determining whether a particular product is “specially designed or adapted” for the benefit or use of handicapped persons. See Implementation of the Nairobi Protocol, 26 Cust. Bull. & Dec. at 243-244. These factors include: (1) the physical properties of the article itself (i.e., whether the article is easily distinguishable by properties of the design, form, and the corresponding use specific to this unique design, from articles useful to non-handicapped persons); (2) whether any characteristics are present that create a substantial probability of use by the chronically handicapped so that the article is easily distinguishable from articles useful to the general public and any use thereof by the general public is so improbable that it would be fugitive; (3) whether articles are imported by manufacturers or distributors recognized or proven to be involved in this class or kind of articles for the handicapped; (4) whether the articles are sold in specialty stores which serve handicapped individuals; and, (5) whether the condition of the articles at the time of importation indicates that these articles are for the handicapped. See also Danze, Inc. v. United States, Slip Op. 18-69 (Ct. Int’l Trade 2018); Sigvaris, Inc. v. United States, 227 F.Supp.3d 1327 (2017).
With regard to the first factor, in this case, we note that the adaptations in question are seamlessly integrated into the designs. The girl’s dress and jeans look exactly like Hilfiger’s traditional line, and there is nothing about the design that can easily distinguish it from articles useful to the general public. In fact, magnetic closures have been used on apparel made for and marketed to the general public. Additionally, with respect to Style #7177098, even though it is stated that this garment is designed to meet the needs of those with dissimilar leg lengths, the adjustable pant leg length is not a new concept, and has been used in production of garments for the general public. Further, the adaptive clothing can be used by people with various conditions, many of which would not be considered to be a physical handicap pursuant to Ch. 98, HTSUS. Therefore, upon examining the samples and multiple marketing links and materials, we do not find that the physical properties of the subject garments are readily distinguishable from articles useful to non-handicapped individuals.
With regard to the second factor, CBP ruled in HQ 556449, dated May 5, 1992, that duty-free treatment under subheading 9817.00.96, HTSUS, was precluded for a two-handed mug, which was designed with a low center of gravity and a corresponding top to help reduce spillage, since this article was commonly used by children and the design was common in traveling mugs used by the general public.
In this case, PVH describes the merchandise as “adapted from the main line of Tommy Hilfiger clothes.” We understand this statement to mean that, rather than being “specially designed” from the outset for mentally or physically handicapped customers, the merchandise was “adapted” from existing designs to meet the needs of that community. As explained above, the legislative history makes clear that Congress did not intend for duty-free treatment under this provision to extend to insignificant adaptations. Instead, for the modified article to qualify for duty-free treatment, the modification must “be significant, so as to clearly render the article for use by handicapped persons.”
The legislative history provides an example of an adaptation that would be considered “insignificant” and therefore precludes classification in subheading 9817.00.96, HTSUS. The Senate Report states that:
The committee expects the Secretary of the Treasury, in consultation with the Secretary of Commerce, to promulgate regulations outlining criteria for determination of whether a modification is “significant.” Such criteria should include the relative cost and permanence of the adaptation and the degree to which the imported article with the adaptation is dedicated to use for the handicapped. For example, an automobile fitted with special hydraulic seats and modified to be operated primarily with hand controls would not be used under normal circumstances by the non-handicapped, and represents a considerable expense to the user. On other hand, special attachments to permit a handicapped individual to operate the foot brake or gas peddle [sic] of an otherwise conventional automobile are inexpensive modifications relative to the cost of the car, and can be readily removed subsequent to importation. This type of adaptation is insufficiently significant to alter the basic character of the conventional car, and thus render it eligible for duty-free entry (the modification, however, might so qualify if entered separately).
See S. Rep. (Finance Committee) No. 97–564, 97th Cong. 2nd Sess., Sept. 21, 1989.
Although no regulations were promulgated outlining criteria for determination of whether a modification is “significant” for purposes of subheading 9817.00.96, HTSUS, the automobile example in the Senate Report guides our interpretation of the term “significant.”
With respect to the cost of the modifications to the main line garments, the cost of modifications added to the cost of the main line for the girls’ dress is $2.25, and the cost of modifications added to the main line product for each jeans style is $5.22 and $2.13. In this case, as in the automobile example from the Senate Finance Report, the modifications made for the handicapped appear to be inexpensive relative to the cost of the merchandise. Moreover, we note that in general, there is no significant price difference between the adaptive garments and their un-adapted counterparts. For example, Style #7177097 and #7177098 are priced for retail sale at $49.50. Tommy Hilfiger girl’s denim jeans are sold on tommy.com at $45.50 and $59.50. Therefore, only a small percentage of the subject garments’ retail price is attributable to the modifications on which PVH bases its claim for duty-free treatment under 9817.00.96, HTSUS. Moreover, just as the modified car maintained its basic character as a conventional car even after the modifications were installed, here the addition of several magnets, or a few buttons does not change the basic character of the merchandise as wearing apparel. As discussed above, the adjustable legs are a common feature on pants, and the magnetic closures are a good solution for all persons who find it difficult to use other closures such as buttons and zippers. We are also not persuaded that the placement of the magnetic closures on the side of the girls’ jeans results in a significant adaption of the article for the use of the chronically handicapped. This style would be useful to an individual with a transient disability (for example, a leg brace after surgery). The numerous marketing materials submitted simply do not indicate that the design, modification, or adaption of the wearing apparel is significant so as to clearly render the garments for use by handicapped individuals.
With regard to the remaining factors, the subject garments are made and sold by PVH, an entity that has established itself as one of the largest apparel companies in the world. Despite the numerous marketing links and materials provided for our consideration, neither PVH nor Tommy Hilfiger are normally recognized as distributors of wearing apparel for the chronically disabled. The company markets the garments to differently-abled consumers, albeit this niche of business is very small in relation to overall sales. Moreover, these articles are not sold in specialty stores, which serve handicapped individuals, though PVH stated its intent to work in conjunction with the Special Olympic NJ team and potentially pop-up shops at the Special Olympics and Paralympics. We note, however, that PVH currently sells these items through their website under the “tommy adaptive” tab. In searching the website, it appears that a user of the website can access the adaptive clothing line without clicking on the specific tab. Items from the adaptive clothing line appear to come up if searching, for example, “girls dresses” in the search tab. The adaptive girls’ dresses appear first on the list of the searched items. Thus, any individual can access and purchase these garments at any time.
Furthermore, the “hang tags” provided for our review state that the line is adapted by Tommy Hilfiger, and the clothing collection “approaches design with ease of dressing in mind.” The tags further refer to Hilfiger’s “iconic style, crafted to fit, with every body in mind.” These statements do not show that the condition of these garments upon importation to the United States clearly indicates that they are for the benefit of physically handicapped individuals. Therefore, these factors were not satisfied based on the evidence provided for the subject rulings.
Given the foregoing, we find that the subject garments do not qualify for duty-free treatment under subheading 9817.00.96, HTSUS.
HOLDING:
The merchandise does not qualify as “specially designed or adapted” for the mentally or physically handicapped and, thus, is not eligible for duty-free treatment under subheading 9817.00.96, HTSUS.
Please note that 19 C.F.R. § 177.9(b)(1) provides that “[e]ach ruling letter is issued on the assumption that all of the information furnished in connection with the ruling request and incorporated in the ruling letter, either directly, by reference, or by implication, is accurate and complete in every material respect. The application of a ruling letter by a Customs Service field office to the transaction to which it is purported to relate is subject to the verification of the facts incorporated in the ruling letter, a comparison of the transaction described therein to the actual transaction, and the satisfaction of any conditions on which the ruling was based.”
A copy of this ruling letter should be attached to the entry documents filed at the time this merchandise is entered. If the documents have been filed without a copy, this ruling should be brought to the attention of the CBP officer handling the transaction.
Sincerely,
Monika R. Brenner, Chief
Valuation & Special Programs Branch