CLA-2 CO:R:C:M 953652 LTO

Mr. Steven P. Kersner
Ross and Hardies
888 Sixteenth Street, N.W.
Washington, D.C. 20006-4103

RE: Endoscopes (video and nonvideo); medical apparatus for functional exploratory examination; optical; heading 8525; EN 90.18; GRI 3(a); Section XVI, note 1(m)

Dear Mr. Kersner:

This is in response to your letters of March 22 and July 27, 1993, on behalf of Olympus Corporation, requesting the classification of nonvideo and video endoscope systems under the Harmonized Tariff Schedule of the United States (HTSUS).

FACTS:

The articles in question are nonvideo and video endoscope systems (hereinafter "endoscopes"). Endoscopes are instruments that are generally used for visualizing the interior of a hollow organ, such as the rectum or urethra. The submitted brochures refer to two different systems: the Olympus EVIS 100 and the OES TV System. The EVIS 100 consists of an endoscope with a multi- channel insertion tube that contains an objective lens and other channels for light guide, air/water nozzle and instruments, a video system center, television monitor and a video tape recorder. The OES TV System consists of a video camera head that is attached to a standard fiberscope. The camera head relays the signals to a control center and onto a television monitor and video tape recorder.

The endoscopes may be fitted with accessories, such as forceps, cytology brushes, biopsy needles, etc. However, these - 2 -

accessories are imported separately from the endoscopes with which they will be used. Further, while the endoscopes can be adapted for surgical purposes, you state that they are principally used for diagnostic purposes, and have provided the following percentage breakdown of diagnostic versus operative uses for various Olympus endoscopes: Diagnostic use percentage Gastroscopes 90 Duodenoscopes 70-80 Colonoscopes 60-70 Sigmoidoscopes 95 Bronchoscopes 100 Flex Cystoscopes 100 Nasopharyngoscopes 100 "ENF" UltraSound System 100 Cystoscopes 60-70 Uretal Scopes 75 Hysteroscopes 80 Arthroscopes 50-60 Laparoscopes 30

ISSUE:

Whether the endoscopes in question are principally used for diagnostic purposes and therefore classifiable as electro- diagnostic apparatus for functional exploratory examination under subheading 9018.19.40, HTSUS.

LAW AND ANALYSIS:

The General Rules of Interpretation (GRI's) to the HTSUS govern the classification of goods in the tariff schedule. GRI 1 states in pertinent part that "for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes . . . ."

The subheadings at issue are as follows:

8525 Transmission apparatus for radiotelephony, radiotelegraphy, radiobroadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras:

8525.30.00 Television cameras

* * * * * * * * * * * * *

9018 Instruments and appliances used in medical, surgical, dental or veterinary sciences, - 3 -

including scintigraphic apparatus, other electro-medical apparatus and sight-testing instruments; parts and accessories thereof: Electro-diagnostic apparatus (including apparatus for functional exploratory examination or for checking physiological parameters); parts and accessories thereof: 9018.19 Other:

9018.19.40 Apparatus for functional exploratory examination, and parts and accessories thereof

* * * * * * * * * * * * * 9018.90 Other instruments and appliances and parts and accessories thereof: Optical instruments and appliances and parts and accessories thereof:

9018.90.20 Other

It is your position that the nonvideo endoscopes are classifiable under subheading 9018.19.40, HTSUS, while the video endoscopes are classifiable under subheading 8525.30.00, HTSUS. Note 1(m) to section XVI, HTSUS, states that chapter 85 does not cover articles of chapter 90. Therefore, if the video endoscopes are chapter 90 articles, they cannot be classified under subheading 8525.30.00, HTSUS.

The Harmonized Commodity Description and Coding System Explanatory Notes (EN) constitute the Customs Co-operation Council's official interpretation of the Harmonized System. While not legally binding, the ENs provide a commentary on the scope of each heading of the Harmonized System, and are generally indicative of the proper interpretation of these headings. See T.D. 89-80.

EN 90.18, pg. 1487, states that heading 9018, HTSUS, "covers a very wide range of instruments and appliances which, in the vast majority of cases, are used only in professional practice . . . either to make a diagnosis, to prevent or treat an illness or to operate, etc." The notes further state that these instruments and appliances include endoscopes (i.e., gastroscopes, peritoneoscopes, bronchoscopic telescopes, cystoscopes, urethroscopes, resectoscopes). EN 90.18, pg. 1490.

It is our opinion that the endoscopes are classifiable under heading 9018, HTSUS, and therefore, cannot be classified under heading 8525, HTSUS. Thus, it is necessary to determine whether - 4 -

they are classifiable under subheading 9018.19.40, HTSUS, as electro-diagnostic apparatus for functional exploratory examination, or under subheading 9018.90.20, HTSUS, as optical medical instruments and appliances.

Additional U.S. Rule of Interpretation 1(a), HTSUS, provides as follows:

a tariff classification controlled by use (other than actual use) is to be determined in accordance with the use in the United States at, or immediately prior to, the date of importation, of goods of that class or kind to which the imported goods belong, and the controlling use is the principal use . . .

In your letter of January 10, 1994, you state that "the primary or chief use for the medical endoscope is for diagnostic purposes. In fact, most of the models of endoscopes are used almost exclusively for diagnostic purposes." You further state that Olympus America has approximately 80% of the medical endoscope market in the U.S., and have provided a percentage breakdown of diagnostic versus operative uses for Olympus endoscopes. With the exception of the Laparoscope, all are principally used for diagnostic purposes. Based on these representations, it is our opinion that endoscopes in question (with the exception of the Laparoscope), which are imported without accessories, are prima facie classifiable under subheading 9018.19.40, HTSUS, as electro-diagnostic apparatus used for functional exploratory examination.

However, the endoscopes (including the Laparoscope) are also prima facie classifiable as optical medical instruments under subheading 9018.90.20, HTSUS. Additional U.S. Note 3 to chapter 90 states that the term optical instruments refers only to those "instruments which incorporate one or more optical elements, but do not include any . . . instruments in which the incorporated optical element or elements are solely for viewing a scale or for some other subsidiary purpose." The endoscopes incorporate a variety of optical elements, and function through the use of such elements, which are used to relay images of internal body structures to an external monitor or camera. The endoscopes are therefore covered by subheading 9018.90.20, HTSUS. Because the endoscopes are prima facie classifiable under two subheadings, it is necessary to resort to GRI 3 (which is made applicable at the subheading level by GRI 6).

GRI 3(a) states that when "goods are, prima facie, classifiable under two or more headings, classification shall be effected as follows: The heading which provides the most specific description shall be preferred to headings providing a more general description [emphasis in original]." Subheading 9018.90.20, HTSUS, describes optical medical instruments, whereas - 5 -

subheading 9018.19.40, HTSUS, describes, in this instance, a particular type of optical medical instrument--an electro- diagnostic instrument for functional exploratory examination. Accordingly, the endoscopes (with the exception of the Laparoscope which is classifiable under subheading 9018.90.20, HTSUS) are classifiable under subheading 9018.19.40, HTSUS.

HOLDING:

The Olympus EVIS 100 and OES TV Systems principally used for diagnostic purposes (Gastroscopes, Duodenoscopes, Colonoscopes, Sigmoidoscopes, Bronchoscopes, Nasopharyngoscopes, Flex Cystoscopes, "ENF" UltraSound System, Cystoscopes, Uretal Scopes, Hysteroscopes, Arthroscopes) are classifiable under subheading 9018.19.40, HTSUS, which provides for medical apparatus for functional exploratory examination. The corresponding rate of duty for articles of this subheading is 7.9% ad valorem.

The Olympus EVIS 100 and OES TV Systems that are not principally used for diagnostic purposes (Laparoscopes) are classifiable under subheading 9018.90.20, HTSUS, which provides for optical medical instruments. The corresponding rate of duty for articles of this subheading is 10% ad valorem.

Sincerely,

John Durant, Director
Commercial Rulings Division