OT:RR:CTF:VS H292346 RMC
Kerry Caban
PVH Corp.
200 Madison Avenue
New York, NY 10016
RE: Subheading 9817.00.96, HTSUS; Adaptive Clothing
Dear Ms. Caban:
This is in response to your request for rulings on the applicability of subheading 9817.00.96, Harmonized Tariff System of the United States (“HTSUS”), to seven garments from PVH’s “adaptive clothing” line. Your ruling requests and samples, which were addressed to our New York office, were forwarded to this office. A teleconference was held on February 12, 2018, during which you further explained the product. An additional submission dated February 12, 2018, was also provided.
FACTS:
PVH is a garment company that owns brands including Calvin Klein, IZOD, and Tommy Hilfiger. At issue in this case are seven imported garments from the Tommy Hilfiger “adaptive clothing line for the differently abled.” PVH states that the goal of this clothing line, including the garments at issue here, is “to offer branded fashionable clothing to the underserved community of the differently-abled consumer in the United States” and that “[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 indicates that they have been “adapted from the main line of Tommy Hilfiger clothes.” The garments are available for sale initially only at tommy.com. Later, through a partnership with the New Jersey Special Olympics, the garments might also be offered for sale at pop-up shops at the Special Olympics and Paralympics.
The merchandise consists of the following garments:
Women’s Adaptive Cotton Knit Dress
This garment (Style No. 7688800410) is an 84% cotton, 16% nylon knit sleeveless dress. Four circular magnets, each about half an inch in diameter, are hidden on each soldier between the beck opening and the arm hole. When the magnets are clicked together, the garment looks like a typical dress. When the magnets are pulled apart, a larger opening at the top of the garment is created. PVH states that this “allows the differently abled to put the dress over their head.” The magnets can then be snapped back together again to create the appearance of a typical dress. No pricing information was provided. The sample is marked “Made in China.”
Women’s Adaptive Cotton Tine Tee
This garment (Style No. 768805) is a women’s 100% cotton “tine tee.” Like the cotton knit dress described above, this garment also has eight hidden magnets in the shoulder between the neck hole and the arm hole to allow for a larger neck opening. PVH states that the retail price of the garment will be $30.50. No sample was provided.
Women’s Adaptive Cotton Sweatshirt
This garment (Style No. 7684933) is a women’s 60% cotton, 40% polyester knit sweatshirt. It has twelve hidden magnets in the shoulder between the neck hole and the arm hole to allow for a larger opening. PVH states that the retail price of the garment will be $69.50. The sample is marked “Made in China.”
Women’s Adaptive Cotton Jacket
This garment (Style No. 7688796166) is a women’s 60% cotton, 40% polyester knit bomber jacket. The jacket has twelve magnets going vertically down the front of the jacket instead of a zipper. This allows the wearer to simply press the magnet packet together to snap the jacket closed. PVH states that the retail price of the garment will be $89.50. The sample is marked “Made in China.”
Girl’s Adaptive Polyester Knit Dress
This garment (Style No. 717906637) is a 97% polyester, 3% elastane knit dress. Like the women’s adaptive cotton knit dress, this garment has eight hidden magnets in the shoulder between the neck hole and the arm hole to allow for a larger neck opening. No pricing information or sample was provided.
Women’s Adaptive Bomber Jacket
This garment (Style No. 7688792319) is a women’s 100% polyester bomber jacket. The jacket has a special zipper with magnets on both sides of the bottom of the zipper. When the user brings the two sides of the bottom of the zipper close to each other, the magnets snap together and the zipper is ready to be pulled up to close the garment. PVH states that this zipper allows the user to operate the zipper with one hand. PVH states that the retail price of the garment will be $129.50. The sample is marked “Made in China.”
Men’s Woven Trousers
This garment (Style No. 7688733281) is a pair of men’s 97% cotton, 3% spandex woven chino khaki pants. In the place of a button and a zipper, the fly uses a strip of Velcro and a series of six magnets. The waistband also includes an elastic band that can be used to tighten the fit. Eight hidden magnets hold together the lower outseam of the pants, starting at the hem and extending up approximately 12 inches. PVH states that these magnets allow for easy opening of the bottom of the pants so that the wearer can slide the pants over a prosthetic or leg braces. No pricing information was provided. The sample is marked “Made in Bangladesh.”
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 imported garments are eligible for duty-free treatment under subheading 9817.00.96, HTSUS, as “articles specially designed or adapted for the use or benefit of the blind or other physically or mentally handicapped persons.”
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 seven garments 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 garments look exactly like the Tommy Hilfiger “main line” garments on which they are based. Accordingly, there is nothing about the articles that make them distinguishable from articles useful to the general public. Although PVH places great emphasis on the magnetic closures in the Women’s Adaptive Cotton Knit Dress, Women’s Adaptive Cotton Tine Tee, Women’s Adaptive Sweatshirt, Women’s Adaptive Cotton Jacket, Girl’s Adaptive Polyester Knit Dress, and Men’s Woven Trousers, magnetic closures are used on apparel made for and marketed to the general public. Likewise, with respect to the Women’s Adaptive Bomber Jacket, magnetic zippers are regularly used for garments designed 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 under Chapter 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 preclude 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, only one piece of information was provided. According to PVH, the zipper on the Women’s Adaptive Bomber Jacket (Style No. 7688792319)—which allows for opening and closing with one hand—costs between $8.50 and $10.00. This zipper is the only feature that sets the “adaptive” garment apart from its “main line” counterpart. The information provided also indicates that, for the “main line” women’s bomber jacket, the cost of a zipper is normally $1.50. Here, 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. According to the information provided for the Women’s Adaptive Bomber Jacket, the modification added between $7.00 and $8.50 to the cost of the “main line” product. Thus, only approximately 5.4% to 6.6% of the garment’s $129.50 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, a Velcro strip, or a different zipper does not change the basic character of the merchandise as wearing apparel. 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. Under these circumstances, we find that the “adaptive” merchandise represents an insignificant adaptation to clothing made for the general public.
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