CLA-02 RR:TC:SM W560531 KKV
Port Director
U.S. Customs Service
610 S. Canal Street
Chicago, IL 60607-4S23
RE: Request for Internal Advice 37/96; eligibility under the Nairobi Protocol; articles, or parts of articles, specially designed or adapted for the handicapped; "bag gripper;" plastic clamp; generic-use article; miscellaneous supplies or accessories; Travenol Laboratories, Inc. v. United States
Dear Sir or Madam:
This is in response to a letter dated October 2, 1996, from Katten, Muchin & Zavis (received by our office on July 1, 1997), on behalf of Baxter Healthcare Corporation, which requests a binding ruling regarding the eligibility of certain plastic clamps, imported from Ireland, for duty-free treatment under subheading 9817.00.96, Harmonized Tariff Schedule of the United States (HTSUS). A sample was submitted for our consideration. Our response herein relates to a matter pending in your office under Protest No. 3901-96-101814.
FACTS:
The article under consideration is referred to as a "bag gripper' or "clamp for outlet port," which is allegedly designed for use in continuous ambulatory peritoneal dialysis (hereinafter, "C.A.P.D."). The plastic clamp, imported into the U.S. from Ireland, consists of a single molded piece of plastic comprising a pair of handles, which open and close, interconnected by a hinge member. Customs records indicate that the merchandise, entered at the port of Chicago on January 15, 1996, was classified by the importer under subheading 9018.90.8000, HTSUS, which provides for "instruments and appliances used in medical, surgical, dental or veterinary sciences, including scintigraphic apparatus other electro-medical apparatus and sight-testing instruments; parts and accessories thereof: other instruments and appliances and parts and accessories thereof: other." One entry was liquidated on May 3, 1996. On August 1, 1996, the importer filed Protest No. 3901-96-101814, contesting the classification of the merchandise and liquidation of the entry under subheading 9018.90.8000, HTSUS. A decision on the protest has been held in abeyance pending resolution of the subject request for internal advice.
It is stated that the product under consideration was designed solely for use by C.AP.D. patients with other Baxter peritoneal dialysis products. Additionally, we are informed that the article is sold by the Renal Division of Baxter Healthcare for use exclusively in peritoneal dialysis. However, no other information has been submitted regarding the manner in which the article is sold or to whom.
ISSUE:
Whether the submitted plastic clamp is "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 eligible for duty-free treatment under subheading 9817.00.96, HTSUS.
LAW AND ANALYSIS:
The Nairobi Protocol to the Agreement on the Importation of Educational, Scientific, and Cultural Materials Act of 1982, established 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. Prior to September 12, 1995, these tariff provisions provided duty-free treatment for "[a]rticles specially designed or adapted for the use or benefit of the blind or other physically or mentally handicapped persons." However, Section B(12), Annex II of Presidential Proclamation 6821 issued September 12, 1995 (60 FR No. 177, September 13, 1995), deleted this language and substituted the following:
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(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."
However, 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
(iv) medicine or drugs.
In Travenol Laboratories, Inc. v. United States, 17 C.I.T. 69; 813 F. Supp. 840 (1993 Ct. Int'l Trade), the plaintiff imported certain medical devices (hollow fiber dialyzers, arterio-venous fistula cannulation sets and arterial-venous blood tubing sets) used in dialysis treatments of individuals with end-stage renal disease. The plaintiff claimed that the merchandise was entitled to duty-free entry under the Nairobi Protocol as "articles specially designed or adapted for the use and benefit of the blind or other physically or mentally handicapped persons." Customs argued that the medical devices were "therapeutic" articles which are specifically excluded from receiving duty-free treatment under the Nairobi Protocol.
In rendering its decision, the court in Travenol, supra, followed the reasoning in Richards Medical Company v. United States, 13 C.I.T. 519, 720 F. Supp. 998 (1989), aff'd, 910 F.2d 828 (Fed. Cir. 1990), and found that although there was evidence to support the finding that kidney dialysis is life-sustaining, that process was not "curative", which is the standard the courts have chosen to equate with the tariff meaning of "therapeutic" and held that the imported articles were entitled to duty-free treatment.
Therefore, since the decision in Travenol, supra, established that articles specially designed or adapted for use in kidney dialysis are not “therapeutic" in nature, and thus not precluded from preferential treatment under subheading 9817.00.96, HTSUS, the issue to be resolved in the instant case is whether the plastic clamp is an article "specially designed or adapted" for such use, or is apart "specially designed or adapted for use in" such article.
Although the legislative history of the Nairobi Protocol discusses the concerns of Congress that the design, modification or adaption 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 HQ 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 Cust. 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.
Counsel contends that two features of the plastic clamps under consideration are indicative of such design features. Firstly, you allege that the dimensions and profile of the clamp are uniquely designed to fit with Baxter peritoneal dialysis sets. In support of this position, counsel refers to a statement on user instruction sheet in which the manufacturer states that "...Baxter cannot ensure that the dialysis products of other manufacturers, when connected with its products, will function in a satisfactory manner." Secondly, counsel asserts that the greater leverage afforded by the special design makes the clamp easy to operate by debilitated C.A.P.D. patients, stating that "it is the dialysis patient, not a medical technician or nurse, who must use the bag gripper during the dialysis procedure."
Upon review, however, we find nothing in the construction of the clamp that dedicates it solely for use in peritoneal dialysis. The fact that the manufacturer recommends the purchase and use of its own products, rather than that of a competitor, does not render the clamp ineffective for use in circumstances other than peritoneal dialysis, whether in other medical applications or non-medical applications. The clamp can effectively be used in practically any case where the outlet port of a plastic container has to be shut off before connecting or disconnecting a length of tubing. Indeed, we note that the bag in which the article is sold is merely labeled, "Clamp for Outlet Port of Plastic Container'' and contains no language of specificity or limitation as to the article's use. Likewise, the language of the original patent, U.S. Patent No. 4,227,730 of October 14, 1980 (reissued as U.S. Patent No. 32,338 on January 27, 1987) refers to the article in question as a "Gripper Member for the Retention of a Plastic Tube." The fact that Baxter, as of this date, has adopted a strategy to market the clamp exclusively as an accessory for peritoneal dialysis, rather than a general use product, is a business decision which may be more indicative of its market research rather than the inherent technical capability of the article itself, and, standing alone, is not persuasive evidence that the article is entitled to preferential treatment under subheading 9817.00.96, HTSUS, as this subheading is not an "actual use" provision.
Additionally, contrary to the assertion that the clamp was designed for use not by a medical technician or nurse, but by a debilitated dialysis patient, we note that although the "Background of the Invention" for the patent of the subject clamp does reference the recent development of the C.A.P.D. technique, it also specifically states,
The flexible port tubing is usually not very easily gripped with the fingers, and it turns out to be difficult to get a good grip on it, so that the spike can be twisted out in an aseptic mamner [sic]. When a nurse or technician is using extreme effort to break the connection between the spike of the transfer set and the tubing of the filled bag, it is possible for the fingers to touch the connection in a contaminating way (emphasis ours).
See U.S. Patent No. 4,227,730 of October 14, 1980, at 1 (reissued as No. 32,338 on January 27, 1987). Thus, it appears that the plastic clamp was designed for use by medical professionals in rendering treatment to patients whose condition requires the use of a plastic bag with an aseptic connection.
With regard to Travenol, supra, which counsel cites as controlling precedent, we note that the court determined that those persons undergoing C.AP.D. qualified as "physically handicapped individuals" and concluded that certain named articles used in the treatment of that condition - namely, hollow fiber dialyzers, arterio-venous fistula cannulation sets and arterial-venous blood tubing sets - were classifiable under subheading 9817.00.96, HTSUS. Although the plastic clamp at issue may be used in conjunction with some of the name articles to facilitate peritoneal dialysis, it is not a portion or component of those named apparatuses; the clamp is sold separately, as a distinct article, listed in the manufacturer's literature lists among "miscellaneous" supplies and accessories. Although the court in Travenol, supra, discussed the broad scope of the provision set forth at subheading 9817.00.96, HTSUS, in determining its applicability to the named articles, we find nothing in that decision that supports the extension of preferential duty treatment to miscellaneous or generic-use articles, like the plastic clamp at issue, which may nevertheless be utilized in connection with C.A.P.D. patients to facilitate peritoneal dialysis, e.g., a patient gown, reclining chair, IV/plastic bag stand, etc.
While its design features may be of great utility to handicapped individuals, the plastic clamp is not dedicated solely for use by the handicapped or solely for use in an article specially designed for the handicapped. Thus, the "specific design" factors must be considered in conjunction with other relevant factors which are discussed below.
The utility of the article to a non-handicapped person, i.e., the "probability of general public use" is another relevant factor set forth by T.D. 92-77. In Headquarters Ruling Letter (HRL) 556449, dated May 5, 1992, Customs articulated the principle of "probability of general public use" in determining whether an article is "specially designed or adapted" within the meaning of the Nairobi Protocol. The following factors were considered to be relevant in making this determination: 1) whether any characteristics are present that create a substantial probability of use by the chronically handicapped; 2) whether the article is easily distinguishable from articles useful to the general public; 3) whether use of the article by the general public is so improbable that such use would be fugitive; 4) whether use of the articles by the general public would be inconvenient; 5) whether articles are imported by manufacturers or distributors recognized or proven to be involved in this class or kind of articles for the handicapped; 6) whether the articles are sold in speciality stores which serve handicapped individuals; and 7) whether the condition of the articles at the time of importation indicate that these articles are for the handicapped.
In analyzing the probability of general public use to the articles under consideration, we note initially that the plastic clamps are articles primarily designed for use in a medical environment (e.g., hospitals, nursing homes, doctors' offices, birthing centers, etc.). Within this particular environment, there exists not only a substantial probability of use by the chronically handicapped, but also an equal probability that the articles will also be used by individuals hospitalized, or otherwise being treated, for acute or transient disability. Because the subject clamps are equally suitable for use by a large population of patients, including those who suffer from acute or transient disability and the non-handicapped, the use of the clamps in this manner is not so improbable as to constitute a fugitive use; therefore, we are unable to conclude that the plastic clamps will be used predominantly by individuals suffering from a permanent or chronic physical or mental impairment, as required by U.S. Note 4(a), subchapter XVII, Chapter 98, HTSUS.
With regard to the other factors set forth in T.D. 92-77, supra, and HRL 556449, while we infer that Baxter Healthcare trades in medical articles, no information has been submitted which would indicate that the firm is recognized as a party involved in the importation of articles for the benefit of the handicapped. Additionally, no information has been submitted which would indicate whether the plastic clamps are sold in speciality stores which serve handicapped individuals, or to the offices of doctors' specializing in renal disorders, or whether they are merely sold to hospitals and nursing homes, etc., (or their suppliers) who may order the articles for internal use as well as distribution to dialysis patients. Lastly, there is nothing to suggest that the condition of the articles at the time of importation would indicate that the articles are specially designed or adapted for use by the handicapped, i.e., those suffering chronic and permanent disability, rather than those individuals hospitalized or otherwise being treated for acute or transient disability or undergoing diagnostic examination. Accordingly, it is our decision that the subject plastic clamps are not "articles specially designed or adapted for the handicapped," and, therefore, are not eligible for duty-free treatment under subheading 9817.00.96, HTSUS.
HOLDING:
On the basis of the information and sample submitted, the plastic clamp which equally suitable for use by a large population of patients, including those who suffer chronic and permanent disability, those who suffer from acute or transient disability and non-handicapped individuals undergoing diagnostic examination, is not considered to be 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 thus, are not eligible for duty-free treatment under subheading 9817.00.96, HTSUS.
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 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
Commercial Rulings Division