CLA-2 RR:CR:SM 562870 KKV
Maria E. Celis, Esq.
John M. Peterson, Esq.
Neville Peterson LLP
80 Broad Street, 34th Floor
New York, NY 10004
RE: Eligibility of insulin pump motor assemblies for preferential tariff treatment under the Nairobi Protocol; 9817.00.96; specially designed or adapted for the handicapped; parts
Dear Ms. Celis and Mr. Peterson:
This is in response to your letter dated September 23, 2003, on behalf of Medtronic Minimed, Inc. (“Medtronic”), which requests a binding ruling regarding the eligibility of an imported insulin pump motor assembly 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 motor assembly designed for use in Medtronic’s Paradigm Model MMT-512 Insulin Pump. The pump is used by individuals to self-manage diabetes or other diseases or conditions resulting in an abnormal or poor glucose level by delivering insulin doses to the bloodstream of a user whose pancreas is not functioning normally.
The MMT-512 Insulin Pump is composed of a pump reservoir filled with insulin, a small battery-operated pump/motor, and a computer chip that allows the user to control the dose of insulin that the pump delivers. The entire apparatus is contained in a plastic housing measuring approximately 1.9 X 3 X .77 inches in size.
The pump reservoir delivers insulin to the body by means of a thin plastic tube called an “infusion set.” The infusion set, which comes in lengths of 24 or 42 inches, has a needle or soft cannula at the end, through which the insulin passes. The cannula is inserted just under the skin, usually on the abdomen. The pump is intended to be used continuously and delivers insulin 24 hours a day, according to a programmed plan unique to each user. It is designed to mimic the pancreas, delivering insulin in precise 0.1 unit pulses according to physiological needs.
The motor assembly is imported with a drive screw and gear head which screws tightly into the pump mechanism. Additionally, several flex cable assemblies connect with the computer portion of the MMT-512 Paradigm, enabling the motor to receive electronic signals to activate and/or deactivate the motor which drives the pump. We are informed that the motor is manufactured exclusively to Metronic’s specifications, having been specifically engineered to be of small size. Further, we are informed that the motor assembly was designed for use exclusively with the MMT-512 paradigm insulin pump, and is not susceptible of any other use.
ISSUE:
Whether the insulin pump motor assembly is an article “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
medicine or drugs.
While the MMT-512 is used by patients to control their glucose level by continuously delivering insulin into the body, it does not cure diabetes and consequently, is not a “therapeutic” article. Moreover, it is not used as part of an examination of symptoms to determine the presence of a disease or ailment, and is therefore not disallowed 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 accordingly, is not precluded from preferential treatment under subheading 9817.00.96, HTSUS, the issue to be resolved in the instant case is whether the motor assembly 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 adaptation 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 HRL 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 Cuts. 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 the case before us, the MMT-512 insulin pump is designed to continuously deliver insulin to the body 24 hours a day via a plastic tube and needle or soft cannula. As such, the article would not be used by the general public, for whom regular injections of insulin could possibly result in medical complications. The fact that the insulin pump is solely dedicated for use by those individuals suffering from diabetes or glucose control problems, is conclusive evidence that the pump is an article “specially designed or adapted” for the handicapped for purposes of the Nairobi Protocol.
With regard to the classification of the subject motor assembly, we note that Presidential Proclamation 6821 of September 12, 1995, 60 Fed. Reg. 47633 (September 13, 1995), expanded the scope of subheadings 9817.00.92 through 9817.00.96 to include “parts or accessories” of such articles. Thus, the issue before us is whether the motor assembly constitutes a “part” of an article “specially designed or adapted” for the handicapped.
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, constituent, or component part, without which the article to which it is joined could not function as such article." See, 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), which held that a tripod is not “part” of a camera. Moreover, because a determination regarding whether an item constitutes a "part" is highly fact specific, the courts and Customs have applied other criteria to make this determination.
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 Schick X-Ray Co. v. United States, 271 F. Supp. 305 (1967), the court 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.”
Here, the motor assembly at issue is not a self-contained object that functions separately from the insulin pump, but is combined together with other components and encased inside a plastic housing to create the finished article. The motor mechanisms are small and compact and are engineered to produce enough power to only be used in the MT-512 pump, which cannot function for its intended purpose without the integration of the motor assembly. The gearhead and drive screw of the motor assembly screw and lock into the MMT-512 to drive the pump, and the flex cables attached to the motor are arranged in accordance with the specifications of the computer chip mechanism of the MMT-512. Because the wiring, capacity and basic programming of the motor assembly is specific to the MMT-512, it may not be installed in any other mechanism; thus, any use by the general public would be fugitive. Accordingly, it is our determination that the subject motor assembly is a “part” of the MMT-512 insulin pump, which is itself an article “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, and therefore the motor assembly is eligible for duty-free treatment under subheading 9817.00.96, HTSUS.
HOLDING:
On the basis of the information submitted, an insulin pump designed to continuously deliver insulin to the body of those suffering from diabetes or glucose control problems 24 hours a day via a plastic tube and needle or soft cannula is an article “specially designed or adapted” for the handicapped for purposes of the Nairobi Protocol, Annex E, to the Florence Agreement, as codified in the Education, Scientific, and Cultural Materials Act of 1982. Therefore, a motor assembly that is combined together with other components and encased inside a plastic housing to form the insulin pump is a “part” of that article, and is therefore 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,
Myles B. Harmon
Director
Commercial Rulings Division