CLA-2 R:C:S 559120 DEC

Port Director
United States Customs Service
200 St. Paul Place
Baltimore, Maryland 21202

RE: Application for Further Review of Protest No. 1303-94-100340, contesting denial of duty-free treatment of cannulae for single use hypodermic needles as articles for the handicapped under the Nairobi Protocol; Travenol Laboratories, Inc. v. United States, Slip Op. 93-15, dated February 3, 1993 (27 Cust. Bull. 1)

Dear Sir:

The above-referenced protest, timely filed by John S. Connor, Incorporated, on behalf of Terumo Medical Corporation (Terumo), protests the assessment of duties by your office on the cannula for single use hypodermic needles under subheading 9018.31.0090, Harmonized Tariff Schedule of the United States (HTSUS). The merchandise at issue was imported on April 23, 1993. Attorney Michael Donovan of Donavon & Van Hook submitted additional information in support of Terumo's protest.

FACTS:

Terumo is a medical device supplier and manufacturer of hemodialysis systems that people with end stage renal disease and chronic kidney failure use when their kidney function has completely and permanently stopped. The components of the hemodialysis system are: (1) cellulose acetate hollow fiber dialyzers, (2) priming sets, (3) dialyzer holders, (4) arterial venous fistula (AVF) needle sets and cannulae. This protest concerns the classification of the cannulae. The importer states that the arterial venous fistula needle sets and cannulae are designed to carry blood out of the patient's body to the dialyzer and then carry the cleansed blood back to the patient through a second arterial venous fistula cannula.

In support of the importer's protest, counsel has submitted the affidavit of Mr. Chad Ruoff, Product Manager for the Dialysis Division of Terumo. In his affidavit, Mr. Ruoff explains that prior to the introduction of the arterial venous fistula cannulae that are the subject of this protest, dialysis was conducted using catheters or shunts. Since the development of arterial venous fistula permitted regular and continuous access to a patient's blood stream without the risk of infection or other complications (blood clotting or shunt disconnection), dialysis became available to chronic renal patients. Initially, smaller and narrower needles and tubing were used, but problems continued with blood flow and bloodstream access. To correct this problem, an arterial venous fistula needle set was designed for use in chronic hemodialysis. The new technology incorporated a larger needle to allow for greater blood flow and less resistance. In addition, to alleviate the repeated puncturing of the patient to access his/her bloodstream, the AVF cannula bevel is ground to make a surgical incision. The protestant states that this feature promotes sharper penetration and more rapid healing. The AVF cannula also has a siliconized wall for comfort and is approximately 1 1/4" wide. The protestant also indicated that the marketing and end use of the AVF cannula needle sets is chiefly for chronic hemodialysis use.

ISSUE:

Whether the arterial venous fistula cannulae for single use hypodermic needles are eligible for duty-free treatment pursuant to the Nairobi Protocol.

LAW AND ANALYSIS:

The Nairobi Protocol to the Agreement on the Importation of Educational, Scientific, and Cultural Materials Act of 1982, established the duty-free treatment for certain articles for the handicapped. Presidential Proclamation 5978 and section 1121 of the Omnibus Trade and Competitive Act of 1988, provided for the implementation of the Nairobi Protocol into subheadings 9817.00.92, 9817.00.94, and 9817.00.96, HTSUS. These tariff provisions specifically provide 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.

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. See Travenol Laboratories, Inc. v. United States, Slip Op. 93-15 dated February 3, 1993 (27 Cust. Bull. 1).

The American Medical Association Encyclopedia of Medicine, pg. 230 (1989), defines "cannula" as follows:

A plastic or metal tube with a smooth, unsharpened tip for inserting into a blood vessel, lymphatic vessel, or body cavity to introduce or withdraw fluids . . . Cannulas are frequently used for blood transfusions and intravenous infusions and for draining pleural effusions. In certain circumstances, such as when blood is required for testing over a period of time, the cannula may be left in place for several days.

Narrower tubing was once the standard, but problems arose due to insufficient blood flow. The cannulae at issue in this protest are designed to be used specifically in the administration of dialysis. The cannulae have a siliconized wall for added comfort and are approximately 1 1/4" wide. In addition, to alleviate the repeated puncturing of the patient to access his/her bloodstream, the cannula bevel is ground to make a surgical incision. The protestant states that this feature promotes sharper penetration and more rapid healing. The protestant also indicated that the marketing and end use of the AVF cannula needle sets is chiefly for chronic hemodialysis use. These factors combined compel Customs to find that the imported cannulae are specially designed to be used in dialysis.

The Court of International Trade has held that hollow fiber dialyzers and arterio-venous fistula cannulation sets as well as arterial-venous blood tubing sets separately imported were eligible for duty-free entry pursuant to the Nairobi Protocol. See Travenol Laboratories, Inc. v. United States, Slip Op. 93-15 dated February 3, 1993 (27 Cust. Bull. 1). Based on a review of the evidence submitted in conjunction with this protest, Customs finds that Travenol case is controlling. Accordingly, the articles that are subject of this protest are entitled to duty-free treatment as articles that are specially designed for the use or benefit of the handicapped.

HOLDING:

The cannulae for single use hypodermic needles described above are specially designed or adapted for the use or benefit of the physically handicapped and, therefore, eligible for duty-free treatment pursuant to the Nairobi Protocol and are properly classified under subheading 9817.00.96, HTSUS. The protest should be granted in full.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office to the protestant no later than 60 days from the date of this letter. Any

reliquidation of the entry in accordance with the decision must be accomplished prior to the mailing of the decision. Sixty days from the date of the decision the Office of Regulations and Rulings will take steps to make the decision available to customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Freedom of Information Act and other public access channels.

Sincerely,

John Durant
Director
Tariff Classification Appeals
Division