OT:RR:CTF:VS H297341 CMR
Parker, Poe, Adams & Bernstein
2500 Charlotte Plaza
Charlotte, North Carolina 28211
RE: Modification of New York Ruling Letter A89600, dated December 9, 1996; classification of medical stretch briefs; not articles for the handicapped
Dear Sir/Madam:
On December 9, 1996, the U.S. Customs Service (now, U.S. Customs and Border Protection) issued New York Ruling Letter (NY) A89600, dated December 9, 1996, to your firm in response to a ruling request submitted on behalf of your client, MB Products Ltd. The ruling letter addressed the classification of certain garments described as medical stretch briefs under subheading 6108.22.90, of the Harmonized Tariff Schedule of the United States (HTSUS). The ruling also addressed the eligibility of these garments for classification in subheading 9817.00.96, HTSUS.
This office has reviewed NY A89600 and determined that it erred with regard to the determination of eligibility for these garments under subheading 9817.00.96, HTSUS. Therefore, we are modifying NY A89600 with regard to that determination. The portion of the decision classifying the medical stretch briefs under subheading 6108.22.90, HTSUS, remains unchanged.
Pursuant to 19 U.S.C. § 1625(c)(1), a notice was published in the Customs Bulletin, Volume 52, No. 33, on August 15, 2018, proposing to modify NY A89600, and any treatment accorded to substantially similar transactions. One comment, which will be addressed below, was received in response to this notice.
FACTS:
NY A89600 describes the garments at issue, consisting of five styles of briefs and described as medical stretch briefs, as “constructed of a knitted mesh composed of approximately 90% polyester and 10% lycra spandex with elasticized waist and leg openings.” The products style numbers are: self-contour/product no. 90, standard/product no. 32, classic/product no 31 and premium/products no. 63 and 67. The ruling indicates that the submission stated “the principal application of these products is to hold disposable and reusable absorbent pads for use by adults and children afflicted with permanent or chronic incontinence problems.” Further, it is indicated that the briefs are designed and promoted to be washed and reused.
NY A89600 classified the adult briefs in subheading 6108.22.9020, HTSUS, which provides for, among other things, women’s knitted or crocheted, briefs, panties, and similar articles. The children’s briefs were classified in subheading 6108.22.9030, HTSUS, which provides for, among other things, girls’ knitted or crocheted, briefs, panties, and similar articles. The 2018 duty rate for these provisions is 15.6% ad valorem. In addition, the ruling found that the subject briefs and panties were eligible for classification in subheading 9817.00.96, HTSUS, which provides for, among other things, articles specially designed or adapted for the use or benefit of physically or mentally handicapped persons, other than articles for the blind. Articles classified in subheading 9817.00.96, HTSUS, are not subject to duty.
ISSUE:
Whether the stretch briefs described above are eligible for duty-free treatment under subheading 9817.00.96, HTSUS, as articles specially designed or adapted for the handicapped.
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).
In the Court of Appeals for the Federal Circuit’s decision in Sigvaris, Inc. v. United States, 899 F.3d 1308 (Fed. Cir. 2018), the court found that the Court of International Trade reached the correct conclusion in finding the merchandise at issue therein, compression stockings, not eligible for classification under subheading 9817.00.96, HTSUS, but the court disagreed with the lower court’s analysis. The court found that the Court of International Trade looked to the condition or disorder and whether it is a handicap. The court stated:
The plain language of the heading focuses the inquiry on the “persons” for whose use and benefit the articles are “specially designed,” and not on any disorder that may incidentally afflict persons who use the subject merchandise.
* * *
. . . we must ask first, “for whose, if anyone’s, use and benefit is the article specially designed,” and then, “are those persons physically handicapped?”
Id.
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 it is 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 of International Trade 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. See also, Sigvaris, Inc. v. United States, 899 F.3d 1308 (Fed. Cir. 2018), wherein the court cited the definitions relied upon by the Court of International Trade in Sigvaris, in concluding that “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.” The Court of Appeals for the Federal Circuit refined this requirement which it found to be incomplete. The court concluded that:
to be “specially designed,” the subject merchandise must be intended for the use or benefit of a specific class of persons to an extent greater than for the use or benefit of others.
Sigvaris, 899 F.3d 1308.
Finally, 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, supra, 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 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), aff’d, 899 F.3d 1308 (Fed. Cir. 2018). The court in Sigvaris, 899 F.3d 1308 (Fed. Cir. 2018), found that “[t]hese factors aid in assessing whether the subject merchandise is intended for the use or benefit of a specific class of persons to a greater extent than for the use or benefit of others.” The court adopted these factors into its analysis.
CBP has previously held that a person suffering from permanent or chronic incontinence is “physically handicapped” as that term is defined in U.S. Note 4(a), subchapter XVII, Chapter 98, HTSUS. See Headquarters Ruling Letter ("HQ") HQ W562506, dated October 28, 2002; HQ 560278, dated October 7, 1997; HQ 960056, dated January 30, 1997; and HQ 558958, dated March 25, 1996. In several rulings, CBP noted an article published as a National Institutes of Health Consensus Development Conference Statement, Vol. 7, #5, October 3-5, 1988, by the U.S. Government Printing Office stating that “urinary incontinence, the involuntary loss of urine so severe as to have social and/or hygienic consequences, is a major clinical problem and a significant cause of disability and dependency.” See HQ 085094, dated May 10, 1990; HQ 085092, dated May 10, 1990; HQ 085798, dated April 18, 1990; and HQ 085691, dated April 18, 1990.
NY A89600, which was issued on December 9, 1990, is in conflict with HQ 085978, dated March 7, 1990. In our earlier ruling, CBP considered the classification of medical stretch briefs constructed of 91% polyester/9% elastomeric knit fabric. The briefs were to be worn, as in this case, with disposable incontinence pads. The briefs were designed to help keep the pad in place and were intended for limited repetitive use. In HQ 085978, we stated that no evidence had been submitted that the briefs were principally used by individuals with permanent or chronic incontinence, as opposed to individuals suffering from acute or transient incontinence. In NY A89600, it appears that photographs and literature were submitted to support the claim that the medical stretch briefs were principally used to hold disposable and reusable absorbent pads for incontinence sufferers. However, no discussion of the literature appears in the decision. Marketing alone cannot be the basis for distinguishing virtually identical merchandise as “specially designed or adapted” or as not “specially designed or adapted” for the handicapped.
One comment was received in response to the notice of proposed notification of NY A89600. The commenter submits that incontinent fixation pants, which are utilized in a pant and pad system, do exhibit certain features that would cause them to meet the requirements of being “specially designed or adapted” for the use of the handicapped. The features pointed out by the commenter are:
a deep waistband and seamless side construction;
elasticized yarns that ensure a tight fit even after multiple washings;
non-binding hems; and,
a defined crotch for the placement of the disposable absorbent pad.
The commenter states that the elastic yarns in the fixation pants, i.e., the knit stretch briefs at issue, distinguishes these garments from others due to their placement. The commenter focuses on the elastic/spandex yarns knitted into the deep waistband to hold the garment in place on the body. Further, the commenter states that “elastic/spandex bands are knitted at various points across the body of the pant to support and hold the shaped pad close to the body . . . [.]” In addition, “[e]lastic/spandex bands are knitted in the base of the leg of the pant to prevent the leg being loose or moving upwards on the leg.” The commenter states: “Clearly these features are purposeful, intentional and necessary to the principal function of an incontinent fixation pant – to securely and as discretely as possible hold an absorbent pad in place.” Although the commenter indicated that “the determinative factor as to whether the item is specially designed or adapted for the use of the handicapped should always rest on the physical properties of the item[,]” the commenter also promoted the sale and marketing of the fixation pants by the importer as probative as to the use of such items by the handicapped.
CBP continues to find that the type of stretch briefs here are not specially designed articles. CBP examines merchandise in its condition as imported. See HQ H185799, dated April 11, 2013; and, HQ H068277, dated December 30, 2010. With regard to factors one, two, and five discussed above, i.e., the physical properties of the articles; whether the articles feature characteristics which create a substantial probability of use by the chronically handicapped; and whether their condition at the time of importation indicates the articles are for the use of the handicapped, the stretch briefs have no apparent design features that dedicate them for the use or benefit of the permanent or chronically handicapped. Features such as the use of elastic/spandex yarns and bands in the knit fabric are insufficient to distinguish these garments as dedicated for a particular use. The use of such yarns in fabric used in the production of underwear is quite common. The deep waistband, seamless side construction, and elasticized yarns hems are found in many underwear garments. For instance, the Jockey® Modern Micro Seamfree® Hipster, Style #2027, is described as featuring “blended microfiber fabric without side seams for smooth comfort. A wide, tonal waistband adds style and a secure fit for total comfort. . . .” Further, the “Warner’s Women’s No Pinching No Problem Seamless Brief Panties” are described, in relevant part, as follows:
Basic comfort starts at the bottom with these women’s No Pinching No Problem seamless brief panties from Warner’s. Smooth and stretchy so you won’t show panty lines, this underwear also has a wide, flat waistband the helps eliminate muffin top. A full-cut seat completes the design with confident, flattering coverage.
As for factor three, i.e., whether the articles are imported by manufacturers or distributors recognized or proven to be involved in this class or kind of articles for the handicapped, and factor four, i.e., whether the articles are sold in specialty stores which serve handicapped individuals, we have no information with regard to the specific manufacturer or distributor of the goods which were the subject of NY A89600. However, substantially similar goods are sold by healthcare supply or retail companies to hold various types of pads in place, not exclusively incontinence pads. Virtually identical pants are marketed for and used by women after childbirth. Hospitals provide the pants to women postpartum as they are made of comfortable, lightweight, stretchable, breathable knit fabric. Such pants are marketed as great for holding incontinence pads, post-surgery dressings, or postpartum maternity pads. While we refer to advertisements for articles substantially similar, if not nearly identical to the merchandise at issue, we find such goods advertised for multiple uses, as reusable and disposable, and for conditions that may be acute or transient. Although the determining factor is whether the articles are specially designed or adapted for the use or benefit of handicapped individuals, a consideration of the use of the merchandise and of merchandise of the same class or kind is enlightening as to whether the merchandise has been specially designed or adapted.
With regard to the commenter’s belief that the sale and marketing of the fixation pants by the importer is probative as to the use of such items by the handicapped, we agree that such information is informative. However, it is not determinative. As the court in Sigvaris, supra, stated:
to be “specially designed,” the subject merchandise must be intended for the use or benefit of a specific class of persons to an extent greater than for the use or benefit of others.
The sale and marketing of fixation pants by an importer will not outweigh the sales and marketing of substantially similar, if not nearly identical, merchandise in an assessment of whether fixation pants are intended for the use or benefit of the handicapped to a greater extent than for the use or benefit of other members of the general public.
With regard to the last factor we consider, i.e., whether the condition of the articles at the time of importation indicates that these articles are for the handicapped, we note that the stretch briefs were imported alone, without any pads with which they were to be used. In their condition as imported, they were simply knit stretch pants.
CBP has considered incontinence products that it concluded were entitled to duty free treatment under subheading 9817.96, HTSUS. In HQ 557529, dated March 8, 1994, the article at issue was an institutional adult diaper which featured a water-resistant elasticized “channel” system formed by either porous polyester or cotton fabric stitched over the center of the diaper. The patent-pending channel was stated to serve as a temporary container for moisture not yet absorbed by the disposal pad, secured by the channel, or as a final barrier against leaks if the pad filled to capacity. Based upon the design of the diaper and the channel system to prevent leakage, and the design and construction of the adult pull-on pants in HQ 560278, CBP found these articles qualified for duty-free treatment under subheading 9817.00.96, HTSUS, as articles specially designed or adapted for the use or benefit of the handicapped. In HQ 560278, dated October 7, 1997, CBP found that the adult pull-on pants were constructed with waterproof vinyl or rubber fabric, tighter than normal waist and leg bindings and the absence of side or crotch seams. HQ 560278 cited to Treasury Decision 92-77 (26 Cust. Bull. 1, August 26, 1992), wherein CBP stated, with regard to an article’s eligibility for duty-free treatment under the provisions of the Nairobi Protocol:
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 to 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.
Unlike the articles in HQ 560278 or HQ 557529, the stretch briefs at issue, like those in HQ 085978, exhibit no special design or construction elements which distinguish these garments for use, principally or primarily, by individuals suffering from permanent or chronic incontinence. The briefs in HQ 085978 differed from the stretch briefs at issue here in that washing the briefs was not recommended. However, whether the briefs are washable or not is not the issue. These stretch briefs are substantially similar, if not identical, to pants marketed for use with incontinence pads, feminine pads, or wound dressings. The multiple uses for which the stretch briefs at issue may be utilized, and the lack of any special design or adaptation which indicates the stretch briefs are principally for the use of handicapped individuals precludes these stretch briefs from classification in subheading 9817.00.96, HTSUS.
HOLDING:
The stretch briefs at issue, self-contour/product no. 90, standard/product no. 32, classic/product no 31 and premium/products no. 63 and 67, are not eligible for duty-free treatment under subheading 9817.00.96, HTSUS, as articles specially designed or adapted for the handicapped.
EFFECT ON OTHER RULINGS:
NY A89600, dated December 9, 1996, is hereby MODIFIED. In accordance with 19 U.S.C. § 1625(c), this ruling will become effective 60 days after its publication in the Customs Bulletin.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division