H307613

90 K Street, N.E., Washington, D.C. 20229-1177 U.S. Customs and Border Protection HQ H307613 November 20, 2020 CON 9-09 OT: RR: CTF: ER H307613 HvB Port Director Christopher D. Mason U.S. Customs and Border Protection c/o Machinery Center of Excellence and Expertise POE-Miami International Airport 4200 NW 21st Street Concourse D - North Terminal 2nd Floor Miami, FL 33122 Attn: Sarah May, Entry Specialist, Team 30 Re: Internal advice; eligibility of testing procedures for duty-free treatment of blood glucose meters, temporary importations under bond Dear Port Director: This case was initiated by a ruling request that Gray Robinson, P.A. filed on behalf of Trividia Health on November 27, 2019. FACTS: In that letter, Trividia Health (“Trividia”) requested a binding ruling regarding whether its blood glucose meters are eligible for duty free entry per subheading 9813.00.30, of the Harmonized Tariff Schedule of the United States (“HTSUS”) as temporary importations under bond (“TIB”). This request was prompted by the port’s denial of Trividia’s request for an extension of the TIB under subheading 9813.00.30, which provides for “articles intended solely for testing, experimental or review purposes.” Because advance rulings cannot be based on current or previous transactions, we have converted Trividia’s ruling request into a Request for Internal Advice, pursuant to 19 C.F.R. § 177.11. In addition to the ruling request, our decision below takes into consideration email correspondence with counsel and a teleconference meeting with counsel and Trividia officials on June 26, 2020. The internal advice request concerns nine entries of goods described as “blood glucose monitors.” On November 18, 2018, Trividia entered the subject blood glucose meters under HTSUS subheading 9813.00.05, which provides for “articles to be processed into articles manufactured or produced in the United States.” On October 29, 2019, Trividia filed an Application for Extension of Bond for Temporary Importation with the port. In response, upon review of the entry paperwork, the port found that the repackaging of the blood glucose meters did not qualify for duty free entry under subheading 9813.00.05, HTSUS, as articles “to be repaired, altered or processed (including processes which result in articles manufactured or produced in the United States),” because repackaging of the blood glucose meters with other items into kits does not meet the requirements for duty-free entry under 9813.00.05, HTSUS. CBP issued a Form 29 Notice of Action to Trividia, and recommended that Trividia file a ruling request to determine whether the articles are classifiable as “articles for testing …” under subheading 9813.00.30, HTSUS. The port extended liquidation of the entry until November 6, 2019, pending the determination of a binding ruling. The port now asks us to confirm whether Trividia’s testing processes of the blood glucose meters qualify for “testing” as provided under subheading 9813.00.30, HTSUS. The Blood Glucose Meters (“BGM”) are battery-operated medical devices which enable persons with diabetes to monitor and measure their blood glucose levels at home. The U.S. Food and Drug Administration (“FDA”) regulates BGMs as Class II medical devices and assigns a Unique Device Identifier (“UDI”) to each BGM unit, which enables the consumer to obtain information about the unit and to obtain safety or recall information from FDA. Trividia imports the BGMs from Taiwan prior to testing and inspecting them at its Fort Lauderdale facility. Subsequently, the BGMS are combined with test strips and other items to form a BGM starter kit, which is then exported to the customer. The BGMs cannot function without test strips, which are manufactured at the Fort Lauderdale facility. Before they are combined into kits with the test strips, the BGMs are subjected to a series of diagnostic operations, which Trividia delineates as “non-functional testing/inspections” and “functional tests.” During the “non-functional” tests, Trividia inspects the BGMs to ensure that they conform to certain industry/regulatory standards and that units are properly configured, for example, the test strip connector, buttons, and product configuration. For the second series of operations, Trividia uses a proprietary meter processing fixture to test whether the BGM is functional. Trividia’s counsel explained that the meter processing fixture system is comprised of both hardware and software. The fixture is integrated with a software system to run a series of tests to insure the BGM meets specifications and operates as intended. For example, the fixture is used to determine whether the product’s internal diagnostics are accurate, whether internal serial numbers conform to product labels, and to verify if particular parts (such as the battery and memory) are properly calibrated. Those BGMs that have passed the above-described evaluations and inspections are then packaged into kits with the test strips. Trividia evaluates each lot (or shipment) of BGMs but, it does not test every single unit within each lot. Instead, Trividia tests samples within each lot. For problems that are discovered during the tests, Trividia will correct it on-site or conduct further evaluation of the lot or unit, depending on the nature of the problem. For example, if Trividia discovers that a BGM has an incorrect time/date setting, then Trividia will resolve the error on site and then export the BGM with its kit within a year of entry. Trividia has a minimum threshold for how many units within each lot are tested. This number varies depending on a variety of criteria, such as lot size. Depending on the nature of the problem, BGM may test each unit within each lot if a threshold problem arises. If too many meters within a particular lot fail Trividia’s inspection or diagnostic processes, Trividia designates the lot as “non-conforming” and refers it to its research and development facility in Ft. Lauderdale for further evaluation/repair. In such cases, the entry of that lot may be extended to allow for evaluation, or the lot is re-exported to Taiwan to be re-worked. In other cases, Trividia may scrap/destroy the lot. ISSUE: May the blood glucose meters be entered temporarily duty-free under subheading 9813.00.30, HTSUS, as articles intended solely for testing, experimental or review purposes when not all BGMs are tested? LAW AND ANALYSIS: General Note 1, HTSUS, mandates that all merchandise imported into the United States is subject to duty unless specifically exempted therefrom. Pursuant to U.S. Notes 1(a) and (c) of Subchapter XIII of Chapter 98 of the HTSUS, which contains subheading 9813.00.30, HTSUS, “articles intended solely for testing, experimental or review purposes…” may be entered into the United States temporarily free of duty under a TIB, for exportation within one year from the date of importation. This is referred to as a “TIB,” i.e., temporary importation under bond. The one year period may be extended for additional periods, which when added to the initial period, does not exceed three years. See 19 C.F.R. § 10.37. The imported merchandise may not be imported for the purpose of a sale or sale on approval. Subchapter XIII of Chapter 98 of the HTSUS, U.S. Note 1 (a). CBP has addressed the scope of the term “testing” in previous rulings. A controlling factor under subheading 9813.00.30, HTSUS is whether there is a legitimate test, experiment, or review of the imported article within the meaning of the law. (See generally Customs Service Decisions (C.S.D.) 82-64, 83-45 and 84-59). How the BGMs themselves are to be tested or how they are to be used in connection with a test or a review is the focus of whether the articles are eligible for temporary entry under this particular subheading. See, e.g., HQ 228619, dated Sept. 11, 2001 (finding that the primary purpose of importing race car engines was to use them in races and that testing was an incidental use).

General Note 1, HTSUS, mandates that all merchandise imported into the United States is subject to duty unless specifically exempted therefrom. Pursuant to U.S. Notes 1(a) and (c) of Subchapter XIII of Chapter 98 of the HTSUS, which contains subheading 9813.00.30, HTSUS, “articles intended solely for testing, experimental or review purposes…” may be entered into the United States temporarily free of duty under a TIB, for exportation within one year from the date of importation. This is referred to as a “TIB,” i.e., temporary importation under bond. The one year period may be extended for additional periods, which when added to the initial period, does not exceed three years. See 19 C.F.R. § 10.37. The imported merchandise may not be imported for the purpose of a sale or sale on approval. Subchapter XIII of Chapter 98 of the HTSUS, U.S. Note 1 (a). CBP has addressed the scope of the term “testing” in previous rulings. A controlling factor under subheading 9813.00.30, HTSUS is whether there is a legitimate test, experiment, or review of the imported article within the meaning of the law. (See generally Customs Service Decisions (C.S.D.) 82-64, 83-45 and 84-59). How the BGMs themselves are to be tested or how they are to be used in connection with a test or a review is the focus of whether the articles are eligible for temporary entry under this particular subheading. See, e.g., HQ 228619, dated Sept. 11, 2001 (finding that the primary purpose of importing race car engines was to use them in races and that testing was an incidental use). Furthermore, in C.S.D. 84-45 (17 Cust. B. & Dec. 804, dated Jan. 11, 1983), we stated that for purposes of entry under TIB, the statute is “not limited to the performance of ritualized testing operations upon imported equipment, but also extends to cover less rigorous procedures so long as they are designed to yield information about the imported articles which was not known prior to completion of the procedures." For example, in HQ 22