CLA-2-90:OT:RR:NC:N3 135
George R. Tuttle, III
Tuttle Law Offices
3950 Civic Center Drive, Suite 310 San Rafael, CA 94903
RE: The tariff classification of the Cionic Neural Sleeve™ and its components from China
Dear Mr. Tuttle:
In your letter dated July 27, 2023, you requested a tariff classification ruling on behalf of Cionic Inc.
The Cionic Neural Sleeve™ system (“CNS”) (NS-100) is designed for the measurement and augmentation of lower limb mobility. Its functional components are composed of a fabric sleeve with integrated electronic components that wrap around the user's lower and upper leg, a battery-powered electronic controller (Control Unit), and a mobile application, which is downloaded by the user to their personal iPhone or Android phone. The CNS has embedded sensors to measure limb movement and muscle activity via an electromyography system. This data is used by the control unit to generate stimulation intended to activate muscles for exercise by a neuromuscular electrical stimulation system or for functional movements, such as walking, using functional electrical stimulation.
You state that the primary function of the CNS is to enhance the gait cycle of persons with a mobility disability that causes a person serious difficulty walking or climbing stairs as a result of impaired corticospinal function due to cardiovascular accidents, multiple sclerosis, spinal cord injuries, cerebral palsy, and disuse atrophy. During the gait cycle, sensors within the sleeve read the position of the shank and thigh and deliver precisely timed stimulation to elicit the necessary muscle contractions. You also state that as a derivative function, when not walking, users may use the unit in exercise mode, where neuromuscular electrical stimulation is used to elicit muscle contractions, which increase muscle strength and improve blood flow to affected muscles. Neither gait mode nor exercise mode of the CNS specifically targets the underlying mechanism of the disease, condition, or injury, and as such it is not a therapeutic device. Also, the CNS would not be prescribed for therapeutic purposes.
A complete CNS kit for sale will typically consist of a Control Unit (840-00001), a sleeve (840-00002, 840-00005, 840-00011, 840-00012, or 840-00027 through 840-00034), a USB wall power adapter (175-00001), a USB A to type C cable (115-00003), electrode storage liners (electrode cover sheets) (465-00006, 465-00007, 465-00014, or 465-00015), a home use box (carry case) (840-00059), a box label (440-00007), replacement electrode pads set (420-00005 or 420-00007), and a quick start guide (770-00001 or 770-00003). However, in its imported condition, the control unit, sleeve, power adapter, cable, electrode storage liner, home use box, and box label are imported from China. The replacement electrode pads sets, and quick start guide are purchased from the United States. The Chinese items are grouped for shipping by product type and are shipped in the same shipment but not packaged in the same container or box. At import, a sleeve box contains a maximum of 18 sleeves per box, control units are a maximum of 48 units per box, etc. The home use box is shipped without components. If, for example, 100 home use boxes are imported, then at least 100 of each of the items listed above are imported in the sample shipment. Sometimes, additional quantities of some items may be imported for replacement purposes. The CNS components will not be imported pre-packaged for sale or distribution to the ultimate consignee. After import, the individual components are unpacked, inspected, and then packaged together into the home use box along with U.S. sourced consumables, such as electrode pads. Once all the components are placed into the home use box, the product is ready for shipment to the patient.
In your letter, you request the classification of the CNS, and you state that you are not asking for the separate classification of each component. However, in the condition as imported, the Chinese items are not classifiable as sets per General Rule of Interpretation (GRI) 3(b) because they are not put up in a manner suitable for sale directly to users without repacking. Instead, the various components are all packaged separately and in bulk at the time of importation. Only after importation are the components repacked for sale directly to consumers. Thus, they need to be classified separately.
HQ H245902, dated January 28, 2015, classified shipments of equal numbers of mobile phone handsets, batteries, and Bluetooth wireless earphones, imported in the same shipping container but in separate shipping boxes, in heading 8517, HTSUS. HQ H245902 concluded that the mobile phone handsets and batteries constituted an unassembled phone of heading 8517 pursuant to GRI 2(a). Because the wireless earphones were not a component of a completed phone, and because the merchandise was not packaged together for retail sale pursuant to GRI 3(b), the wireless earphones were classified separately.
In this case, equal numbers of the control units and sleeves imported in the same shipping container but in separate shipping boxes constitute an unassembled CNS pursuant to GRI 2(a). Extra numbers of the control units or sleeves will be classified separately. Because the power adapter, cable, electrode storage liner, home use box, and box label are not parts of a CNS and are not put up together with the control units and sleeves for retail sale pursuant to GRI 3(b), they will be classified separately.
The applicable subheading for the equal numbers of the control units and sleeves imported in the same shipping container but in separate shipping boxes will be 9021.90.8100, Harmonized Tariff Schedule of the United States (HTSUS), which provides for “other appliances which are worn or carried, or implanted in the body, to compensate for a defect or disability; parts and accessories thereof: [o]ther: [o]ther.” The general rate of duty will be free. The extra numbers of the control units or sleeves will be classified in the same subheading as parts.
The applicable subheading for the power adapter will be 8504.40.9550, HTSUS, which provides for “[e]lectrical transformers and static converters…: [o]ther: [r]ectifiers and rectifying apparatus: [o]ther.” The general rate of duty will be free.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheading 8504.40.9550, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 8504.40.9550, HTSUS, listed above.
The applicable subheading for the cable will be 8544.42.2000, HTSUS, which provides for “[i]nsulated (including enameled or anodized) wire, cable (including coaxial cable) and other insulated electric conductors, whether or not fitted with connectors; optical fiber cables, made up of individually sheathed fibers, whether or not assembled with electric conductors or fitted with connectors: [o]ther electric conductors, for a voltage not exceeding 1,000V: [f]itted with connectors: [o]ther: [o]f a kind used for telecommunications.” The general rate of duty will be free.
Pursuant to U.S. Note 20 to Subchapter III, Chapter 99, HTSUS, products of China classified under subheadings 8544.42.2000, HTSUS, unless specifically excluded, are subject to an additional 25 percent ad valorem rate of duty. At the time of importation, you must report the Chapter 99 subheading, i.e., 9903.88.03, in addition to subheading 8544.42.2000, HTSUS, listed above.
The HTSUS is subject to periodic amendment so you should exercise reasonable care in monitoring the status of goods covered by the Note cited above and the applicable Chapter 99 subheading. For background information regarding the Section 301 trade remedy, you may refer to the relevant parts of the USTR and CBP websites, which are available at:
https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions and https://www.cbp.gov/trade/remedies/301-certain-products-china respectively.
You also request consideration of the CNS under the Nairobi Protocol. 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 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. These tariff provisions specifically state that "[a]rticles 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 article" 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."
U.S. Note 4(b), subchapter XVII, Chapter 98, HTSUS, which establishes limits on classification of products in these subheadings, states as follows: (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. The primary issue is whether the CNS is “specially designed or adapted” for the use or benefit of handicapped persons within the meaning of the Nairobi Protocol and whether the imported items are parts or accessories “specially designed or adapted” for use in the CNS. Although the legislative history of the Nairobi Protocol discusses the concerns of Congress that the design, modification or adaptation 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, Headquarters Ruling Letter (HRL) 951004 dated March 3, 1992. Since 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.
Based on the information provided, the CNS is a mobility augmentation system which augments motor movement during gait using functional electrical stimulation for users with permanent impairments. It is used to improve the users’ ability to walk. You state that it is not for acute or transient disability. It is not intended as a therapeutic device and is not marketed as a therapeutic device as it does not provide curing or healing of the disease or physical disability. Accordingly, the unassembled CNSs (the control units and sleeves imported in the same shipping container but in separate shipping boxes) would qualify for duty-free treatment under subheading 9817.00.96, HTSUS, which provides for “[a]rticles 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 article: [o]ther,” free of duty and the Merchandise Processing Fee (MPF). The extra number of the control units or sleeves are parts “specially designed or adapted” for use in the CNS. They would also be classified under subheading 9817.00.96, HTSUS, free of duty and the MPF.
The Power Adapter USB Wall is a USB Type-A power adapter with an output of 5 Volts and 2 Amps. Based on the information provided, the Power Adapter has no features or functions that devotes its use to the CNS, and the USB-A to USB-C electrical cable is not used with a specific machine having features and/or functions that dedicate its use to any one device, specifically the CNS. They are also not packaged together for retail sale with the CNS and simply entering them together in the same shipping containers as the CNS control units and sleeves is not sufficient to have these items classified in subheading 9817.00.96 as articles specifically designed or adapted for the use or benefit of the handicapped within the meaning of the Nairobi Protocol.
Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided at https://hts.usitc.gov/current.
We do not have enough information to classify the electrode storage liner, the home use box (carrying case), and box label. Your request should include the following:
Regarding the electrode storage liner:
Please confirm the material used to construct the storage liners. If they are not made of a single material, detail the constituent materials along with a breakdown of the value and weight of those components.
Provide clear images of the storage liners from different angles.
Regarding the home use box:
Provide the fiber content by percentage by weight. For example, 20% nylon, 80% cotton.
Confirm if the outer surface of the case is coated with plastic sheeting.
Provide dimensions in inches.
Regarding the box label:
Of what material is the label made (plastic, paper etc.)?
Does the label have adhesive on its reverse?
What method of printing was used on the label?
This ruling is being issued under the provisions of Part 177 of the Customs and Border Protection Regulations (19 C.F.R. 177).
A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, please contact National Import Specialist Fei Chen at [email protected].
Sincerely,
Steven A. Mack
Director
National Commodity Specialist Division