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HQ 561940




February 7, 2001

CLA-2 RR:CR:SM 561940 KSG

CATEGORY: CLASSIFICATION

TARIFF NO.: 9817.00.96

Port Director
Port of New York
U.S. Customs Service
6 World Trade Center
Room 761
New York, NY 10048-0945

RE: Application for Further Review of Protest No. 1001-00-100790; Nairobi Protocol; subheading 9817.00.96; therapeutic

Dear Sir:

This is in reference to a Protest and Application for Further Review timely filed by counsel on behalf of Carl Zeiss, Inc., contesting the denial of the duty free exemption set forth at subheading 9817.00.96, of the Harmonized Tariff Schedule of the United States (“HTSUS”), to 120 ophthalmic surgical microscopes.

FACTS:

This case involves 120 ophthalmic surgical microscopes entered on January 14, 1999. The microscopes were made in Germany and were imported by Carl Zeiss, Inc. The entry was liquidated as entered on November 26, 1999, under subheading 9011.10.8000 of the Harmonized Tariff Schedule of the United States (“HTSUS”). The protestant argues that the articles should be classified in subheading 9817.00.60, HTSUS.

The microscopes are used by surgeons in magnifying the area of the eye to be operated on in delicate and precise microsurgeries on the eye. The microscopes are mainly used for cataract surgeries and internal occular lens implantations. In addition, the microscopes are used for glaucoma surgery, keratoplastic, refractive surgery, vitreous surgery and retinal surgery.

ISSUE:

Whether the ophthalmic surgical microscopes are eligible for duty-free treatment under subheading 9817.00.96, HTSUS.

LAW AND ANALYSIS:

The Nairobi Protocol to the Florence Agreement on the Importation of Educational, Scientific, and Cultural Materials Act of 1982 expanded the scope of the Florence Agreement primarily by expanding duty-free treatment for certain articles for the use or benefit of the handicapped in addition to providing duty-free treatment for articles for the blind. Section 1121 of the Omnibus Trade and Competitiveness Act of 1988 and Presidential Proclamation 5978 provided for the implementation of the Nairobi Protocol by inserting subheadings 9817.00.92, 9817.00.94, and 9817.00.96 into the HTSUS. These tariff provisions specifically state that “articles specifically designed or adapted for the use or benefit of the blind or other physically or mentally handicapped persons” are eligible for duty-free treatment.

U.S. Note 4(a), 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. Individuals who are visually impaired are encompassed by this Note.

U.S. Note 4(b), chapter 98, HTSUS, states that 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 issue presented is whether the microscope is a therapeutic article within the meaning of U.S. Note 4(b)(iii) and thereby excluded from duty-free treatment under subheading 9817.00.96, HTSUS. In Travenol Laboratories, Inc. v. U.S., 813 F. Supp. 840 (CIT 1993), the court held that devices used with a dialysis machine were not therapeutic and therefore, the devices were eligible for duty-free treatment under subheading 9817.00.96, HTSUS. The court found that kidney dialysis is not curative and that whether an article cures or heals is the standard with regard to the tariff meaning of the term “therapeutic”. The court relied on a prior case, Richards Medical Co. v. U.S., 720 F. Supp. 998 (CIT 1989), which involved an imported hip prosthesis and separately packaged instruments. The court in Richards stated that Congress intended to limit the duty-free treatment only to those articles which help handicapped persons adapt to their handicapped condition. The court held that only articles used to heal or cure disease are considered “therapeutic” within the meaning of the provision. The court also held that the fact that the handicapped persons themselves do not use these instruments or that they do not remain in the body of the person does not preclude classification of the instruments under this provision, inasmuch as it provides for "articles specifically designed or adapted for the use or benefit" of the handicapped (emphasis added).

In Headquarters Ruling Letter (“HRL”) 952465, dated January 27, 1993, Customs held that certain ophthalmic instruments which are used in surgical procedures for chronic degenerative eye conditions were eligible for duty-free treatment under subheading 9817.00.96, HTSUS. Customs determined that the ophthalmic instruments are used to improve a visually handicapped person’s ability to see and they are not used in procedures which remove or lessen the disease which caused the underlying condition. In this ruling, Customs cited to HRL 556243, dated December 2, 1991, in which Customs held that imported pacemakers were not therapeutic and therefore, not precluded from duty-free treatment under U.S. Note 4(b).

In HRL 961705, dated August 25, 1999, Customs held that various imported ophthalmic apparatus, including ophthalmic surgery microscopes, were classifiable in subheading 9817.00.96, HTSUS. Customs considered the issue of whether the operation microscopes were therapeutic and concluded that the microscopes did not heal or cure the underlying eye conditions of the patient but served to alleviate the manifestations of the degenerative ophthalmic conditions.

The surgical microscopes in the instant case are similar to the articles involved in Travanol, Richards Medical Co. , HRL 961705 and HRL 952465, in that the article will not heal or cure the underlying disease. Rather, the microscopes are used to perform surgery to improve a visually handicapped person’s ability to see, not to remove or treat the degenerative ophthalmic condition. Therefore, we find that the surgical microscopes are not therapeutic articles. Accordingly, the imported surgical microscopes are not precluded from subheading 9817.00.96, HTSUS, treatment by U.S. Note 4(b) of Chapter 98, HTSUS.

HOLDING:

The imported ophthalmic surgical microscopes are entitled to duty-free treatment under subheading 9817.00.96, HTSUS. Accordingly, you should grant this protest in full.

In accordance with Section 3a(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, this decision should be attached to Customs Form 19, Notice of Action, and 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 this decision. Sixty days from the date of this 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 to the public via the Diskette Subscription Service, the Freedom of Information Act, and other public access channels.

Sincerely,

John Durant, Director
Commercial Rulings Division


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