CLA-2 RR:CR:SM 561283 KKV
Leonard L. Rosenberg, Esq.
Sandler, Travis & Rosenberg, P.A.
5200 Blue Lagoon Drive
Miami, FL 33126-2022
RE: Eligibility of diabetes monitoring equipment carrying cases for preferential tariff treatment under the Nairobi Protocol; 9817.00.96; specially designed or adapted for the handicapped
Dear Mr. Rosenberg:
This is in response to your letter dated February 3, 1999 (and subsequent facsimile dated August 6, 1999), on behalf of Bag Factory, Inc., which requests a ruling concerning the eligibility of imported diabetes monitoring equipment cases for duty-free treatment under subheading 9817.00.96, Harmonized Tariff Schedule of the United States (HTSUS). A sample was submitted with your request.
FACTS:
The article under consideration is described as a carrying case for a diabetes monitoring system. This system is designed to permit a diabetic patient to perform reliable blood glucose self-monitoring (i.e., ascertaining whether the patient’s capillary whole blood glucose value is either too high or too low) as a necessary part of treatment. The system consists of a blood glucose monitor (with batteries), ten instant test strips, an adjustable lancet device with ten lancets, control solution, a self-test diary, a user’s manual and reference guide which are all contained within a carrying case.
To perform the necessary test, the patient must place a test strip into the monitor and, after pricking a fingertip with the lancet device, apply a drop of blood to the center of the strip’s test pad. The monitor automatically begins to measure the patient’s blood glucose level as soon as it senses the drop of blood on the strip. After approximately twelve seconds, the test results are displayed on the monitor. A visual color check can then be made immediately following the test by comparing the reaction color on the test strip with the color chart on the test strip vial. This visual check can be used to confirm the value obtained by the monitor. Once a patient’s blood glucose level is determined, he or she can then, if necessary, inject insulin.
The sample carrying case under consideration, measures approximately 4"x 6"x 1½", and contains a zipper that extends along three sides of the pouch, permitting the pouch to lie flat when fully opened. Although the sample submitted is made of vinyl, we are informed that other materials (e.g., leather or textile) may be used for the outermost covering in future shipments. Regardless of the material used on the outside of the case, the inside of the cases will all have identical features. Into the left side of the case are sewn two elastic bands: one horizontal band designed to hold the round vial of test strips and a second vertical band designed to hold the two-inch monitor. We are informed that future imports may include two vertical bands to provide better support for the monitor. Into the center or spine of the case is sewn a smaller, vertical elastic band designed to hold the lancet device. The right side of the case includes a zippered textile (or plastic) pouch designed to hold the individual lancets and bottle of control solution as well as a small pocket to hold the self-test diary and reference guide.
You indicate that the carrying cases imported by your client are sold only to the manufacturer of the diabetes monitoring system, who has supplied the specifications and material necessary for their manufacture.
ISSUE:
Whether diabetes monitoring equipment carrying cases are articles “specially designed or adapted” for the handicapped within the meaning of the Nairobi Protocol, Annex E, to the Florence Agreement, as codified in the Education, Scientific, and Cultural Materials Act of 1982, or a part or accessory that is specially designed or adapted for use in such article, and therefore eligible for duty-free treatment under subheading 9817.00.96, HTSUS.
LAW AND ANALYSIS:
The Agreement on the Importation of Educational, Scientific and Cultural Materials, known as the Florence Agreement is an international agreement drafted by the United Nations Educational, Scientific, and Cultural Organization (UNESCO), adopted by it in Florence, Italy, in July 1950 (17 UST 1835; TIAS 6129). It provides for duty free treatment and the reduction of trade obstacles for imports of educational, scientific, and cultural materials in the interest of facilitating the international free flow of ideas and information. Materials falling within the coverage of the Florence Agreement include: books, publications and documents; works of art and collector’s pieces; visual and auditory materials; scientific instruments and apparatus; and articles for the blind.
The Nairobi Protocol to the Florence Agreement on the Importation of Educational, Scientific, and Cultural Materials Act of 1982 expanded the scope of the Florence Agreement primarily by expanding duty free treatment for certain articles for the use or benefit of the handicapped in addition to providing duty free treatment for articles for the blind. The 97th Congress passed Pub. L. 97 446 to ratify the Nairobi Protocol in the United States. 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, however, did state that it did not intend “that an insignificant adaptation would result in duty free treatment for an entire relatively expensive article... the modification or adaptation must be significant so as to clearly 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.
Section 1121 of the Omnibus Trade and Competitiveness Act of 1988 and Presidential Proclamation 5978 provided for the implementation of the Nairobi Protocol by inserting permanent provisions, subheadings 9817.00.92, 9817.00.94, and 9817.00.96 into the HTSUS. These tariff provisions specifically stated that “articles specifically designed or adapted for the use or benefit of the blind or other physically or mentally handicapped persons” are eligible for duty free treatment. However, this language was subsequently amended by section B(12), Annex II of Presidential Proclamation 6821, issued September 12, 1995 (60 FR No. 177, September 13, 1995), which expanded eligibility for preferential tariff treatment under these provisions to include:
Articles specially designed or adapted for the use or benefit of the blind or other physically or 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.
This change was effective for articles entered on or after January 1, 1995. Subheadings 9817.00.92 and 9817.00.94, HTSUS, cover specified articles for the blind. Subheading 9817.00.96, HTSUS, provides for other articles, parts and accessories, specially designed or adapted for the use or benefit of physically or mentally handicapped persons other than the blind.
U.S. Note 4(b), subchapter XVII, Chapter 98, HTSUS, establishes certain limitations on the classification of products in these subheadings, stating:
(B) Subheadings 9817.00.92, 9817.00.94 and 9817.00.96 do not cover --
(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.
While the carrying case at issue is used to transport a collection of articles used by patients to monitor blood glucose level for the purpose of ascertaining whether treatment (i.e., an injection of insulin) is appropriate at any given time, it is not used as part of an examination of symptoms to determine the presence of a disease or ailment, and is therefore not precluded from duty-free treatment under U.S. Note 4(b) as a “diagnostic article.”
Having thus determined that the subject article does not fall within any of the named limitations and thus not precluded from preferential treatment under subheading 9817.00.96, HTSUS, the issue to be resolved in the instant case is whether the carrying case is an article “specially designed or adapted” for the use or benefit of physically or mentally handicapped persons other than the blind, or is a part or accessory “specially designed or adapted for use in” such article.
U.S. Note 4(a), subchapter XVII, Chapter 98, HTSUS, ("Note 4(a)"), provides 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."
In Headquarters Ruling Letter (HRL) 561020, dated October 12, 1998, Customs determined that individuals with diabetes are limited in their ability to perform a broad range of jobs because they must be able to monitor their blood sugar, inject insulin if prescribed, and have work restrictions due to excessive urination, possible nausea, dizziness and fainting. Concluding that persons with diabetes suffer from a permanent or chronic physical impairment which substantially limits a major life activity - working - Customs held that a person suffering from diabetes is “physically handicapped” within the meaning of U.S. Note 4(a), subchapter XVII, Chapter 98, HTSUS.
Although the legislative history of the Nairobi Protocol discusses the concerns of Congress that the design, modification or adaption of an article must be significant, so as to clearly render the article for use by handicapped individuals, no specific definition of these terms was established by Congress. See Senate Report (Finance Committee) No. 97 564, September 21, 1982. See also HQ 951004, dated March 3, 1992. Because it is difficult to establish a clear definition of what is "specially designed or adapted," various factors must be utilized on a case by case basis to determine whether a given article is "specially designed or adapted" within the meaning of this statute.
In Treasury Decision 92-77 (26 Cust. Bull. 1, August 26, 1992), Customs addressed the implementation of the duty-free provisions of the Nairobi Protocol, and discussed the eligibility requirements for duty-free treatment. With regard to whether an article has been “specially designed or adapted” for the handicapped, Customs stated the following:
A primary factor to be considered concerns the physical properties of the article itself, i.e., whether the article is easily distinguishable, by properties of the design and the corresponding use specific to this unique design from articles useful to non-handicapped individuals. If an article is solely dedicated for use by the handicapped, e.g. pacemakers or hearing aids, then this is conclusive evidence that the articles are “specially designed or adapted” for the handicapped for purposes of the Nairobi Protocol.
In instances where the design features of an article are of great utility to handicapped individuals, but not dedicated solely for use by the handicapped, the "specific design" inquiry must be considered in conjunction with other relevant factors, such as the utility of the article to a non-handicapped person, i.e, the “probability of general public use.” See T.D. 92-77, supra. The principle of “probability of general public use” in determining whether an article is “specially designed or adapted” within the meaning of the Nairobi Protocol was articulated in detail in HRL 556449, dated May 5, 1992, where Customs concluded that the following factors were germane in making this determination: 1) whether any characteristics are present that create a substantial probability of use by the chronically handicapped; 2) whether the article is easily distinguishable from articles useful to the general public; 3) whether use of the article by the general public is so improbable that such use would be fugitive; and 4) whether use of the articles by the general public would be inconvenient.
In addition to the physical properties of an article and the probability of its use by the general public, T.D. 92-77, supra, also found other factors relevant in determining whether an article has been “specially designed or adapted” for the handicapped for purposes of the Nairobi Protocol: whether it has been imported by manufacturers or distributors recognized or proven to be involved in this class or kind of articles for the handicapped; whether the article is sold in speciality stores which serve handicapped individuals; and whether the condition of the article at the time of importation indicates that the article is for the handicapped.
Customs has previously discussed the eligibility of “diabetes organizers” for preferential tariff treatment under subheading 9817.00 96, HTSUS. In HRL 561020, supra, Customs considered several types of cases, including a wallet organizer, a daily organizer and a travel organizer, all of which were designed to carry products necessary to treat a diabetic patient. The wallet organizer contained elastic strips to hold syringes and insulin bottles in one of its two compartments and a pocket to hold a miniature ice pack in the other. The daily organizer and the travel organizer included elastic straps for syringes and insulin bottles and a compartment for an ice pack, but each also included a zippered pouch designed to hold a meter and additional clear plastic pouches for other syringes, insulin bottles or waste. Customs determined that the separate cool compartment for insulin, the elastic straps for insulin bottles and syringes, compartments for meters, items to measure temperature and detachable medical waste pouch were distinctive design features which easily distinguished them from articles useful to the general public, rendering any such use fugitive. Customs also determined that the organizers were sold primarily in specialized sections of drugstores and by mail, and were advertised in specialized publications targeted to people with diabetes. Lastly Customs found that the importer was a firm which specializes in the health care area and specifically, in articles for people with diabetes. In light of these factors, Customs held that the three diabetes organizers were specially designed or adapted for the use or benefit of handicapped persons and entitled to duty free treatment under subheading 9817.00.96, HTSUS.
Similar to the organizers in HRL 561020, supra, the carrying case at issue also incorporates into its design elastic bands and a zippered pouch into which may be inserted components of a diabetes monitoring system. While these design features may be of great utility to handicapped individuals, the mere presence of elastic bands and a zippered pouch does not dedicate the case solely for use by the handicapped or solely for use in an article specially designed for the handicapped; a case of this type with similar features would be similarly useful to any individual for use in carrying and securing personal grooming articles (e.g., razor, toothbrush, toothbrush, etc.) while traveling. Thus, the "specific design" test must be considered in conjunction with other relevant factors set forth in T.D. 92 77, supra.
The record shows that in this particular instance the manufacturing specifications and raw materials for the case were supplied to the case manufacturer by the manufacturer of the diabetes monitoring equipment so as to ensure that the openings would accommodate but carefully secure the various components of the monitoring system. Inasmuch as these components have a variety of different sizes and shapes, the placement and size of the bands to accommodate them in combination is a characteristic which creates a substantial probability that the carrying case will be used by the chronically handicapped in conjunction with these items. The number and shape of articles which may be secured in the case make its use by the general public so improbable that any such use would be fugitive. Additionally, we note that the cases are not imported as articles of general use offered for sale to a variety of different commercial concerns but are, instead, made to specification, imported and sold solely to one particular manufacturer of diabetes monitoring equipment. Further, we are informed that the complete diabetes monitoring system, with case, is an article which is generally available for purchase at drugstores, but one to which access is generally limited by display behind the counter, requiring consultation with the pharmacist for purchase. Lastly, we are informed that while a prescription is not required to obtain the complete monitoring system, its cost is generally covered by medical insurance.
Accordingly, it is our decision that the subject carrying cases constitute “articles specially designed or adapted for the use or benefit of the blind or other physically or handicapped persons, or parts and accessories that are specially designed or adapted for use in such within such article,” and therefore eligible for duty-free treatment under subheading 9817.00.96, HTSUS.
HOLDING:
On the basis of the information and sample submitted, the diabetes monitoring equipment carrying cases are considered to be articles “specially designed or adapted for the handicapped,” or a part or accessory specially designed within the meaning of the Nairobi Protocol, Annex E, to the Florence Agreement, as codified in the Education, Scientific, and Cultural Materials Act of 1982, and thus, are eligible for duty-free treatment under subheading 9817.00.96, HTSUS.
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 Customs officer handling the transaction.
Sincerely,
John Durant
Director
Commercial Rulings Division