H313200

U.S. Department of Homeland Security Washington, DC 20229 U.S. Customs and Border Protection HQ H313200 November 9, 2020 OT:RR:CTF:VS H313200 CMR CATEGORY: Classification U.S. Customs and Border Protection Pharmaceuticals, Health & Chemicals Center Of Excellence and Expertise 3600 E. Paisano Dr., Bldg. D El Paso, TX 79905 Attn: SIS Jessica Sutton RE: Application for Further Review of Protest 2095-19-104227; Eligibility of tantalum pin components as parts of articles for the use or benefit of the handicapped under subheading 9817.00.96, HTSUS Dear Director: This is in response to your referral of the Application for Further Review (AFR) of Protest 2095-19-104227, timely filed by the importer, Medtronic, Inc., against your decision to deny duty-free treatment to certain tantalum pin components. Medtronic contends that the tantalum pin components are imported to be used as parts of articles which have been previously found by Customs and Border Protection (CBP) to be eligible for duty-free treatment under subheading 9817.00.96, Harmonized Tariff Schedule of the United States (HTSUS). We note the AFR was properly approved. FACTS: Medtronic states that the imported merchandise consists of radiopaque tantalum marker pin components to be used in the production, after importation, of implantable polymer devices designed to help provide stability for spinal fusion caused by degenerative cervical disc diseases. Tantalum pins are integrated into polymer plastic devices in order to display orientation in radiography, providing surgeons the ability to verify placement of various medical grade polyetheretherketone (PEEK) implantables. Finished tantalum pin components, of various sizes, are manufactured in Germany and shipped to the Medtronic manufacturing site in Puerto Rico for insertion into machined PEEK implantables. The tantalum marker pins are made from straightened, high tolerance, unannealed tantalum wire and are specifically cut to length prior to importation. The imported pins are used in the construction of PEEK spinal cages utilized in Medtronic’s branded ‘Capstone Peek Spinal System.’ Medtronics submits that the imported pins maintain the adequate mechanical properties to withstand the impact of insertion into the spinal cage implants. At the time of import, the tantalum pins have undergone many significant manufacturing steps to bring them into very exact specifications prior to manufacture into a finished polymer device. According to the protest submission, “[p]rior to import, the tantalum pin goes through at least four core processing steps, including raw material collection; precision cutting, shaping, deburring; quality inspection and packaging.” The steps are set forth in the submission as follows: Raw tantalum alloy wire is inspected for material quality and measurement approval. The precision cutting, shaping and deburring process utilizes a rotary milling machine to cut excess material off the raw metal wire and shape to specified dimensions, which will allow for pin insertion and assembly into the completed PEEK cage. The machined part will be sanded and smoothed to be free of burrs and sharp edges. The finished pin will be inspected to comply with cut depths, dimensions and coating thickness requirements. The pin will be packaged in a non-leaching material, which prevents damage to parts upon shipping. According to Medtronics, the above operations render the tantalum pin suitable only for implantable cage production, as it is stated it has no other apparent use. ISSUE: Whether the imported radiopaque tantalum marker pins are eligible for duty free treatment under subheading 9817.00.96, HTSUS, as parts of articles specially designed or adapted for the use or benefit of the handicapped. LAW AND ANALYSIS: Subheading 9817.00.96, HTSUS, 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. 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. Accordingly, eligibility 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. 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.” 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 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”) 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 (Ct. Int’l Trade, 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. In support of its protest, Medtronics relies upon New York Ruling Letter (NY) N201418, dated February 17, 2012, wherein CBP agreed with a secondary classification of Medtronic’s Capstone Peek Spinal Fusion System, along with other items, as an article specially designed or adapted for th

Subheading 9817.00.96, HTSUS, 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.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.Accordingly, eligibility 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, theterm “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. 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