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HQ 562887




January 7, 2004

CLA-2 RR:CR:SM 562887 KSG

CATEGORY: CLASSIFICATION

TARIFF NO.: 9817.00.96

Port Director
U.S. Customs and Border Protection
#1 La Puntilla Street
San Juan, Puerto Rico 00901

RE: Application for Further Review of Protest No. 4909-03-100027; Nairobi Protocol; diabetes

Dear Director:

This is in reference to a Protest and Application for Further Review filed by counsel on behalf of Lifescan, Inc., contesting the denial of duty-free treatment under subheading 9817.00.96, of the Harmonized Tariff Schedule of the United States ("HTSUS"), to imported "One Touch" blood glucose monitoring test strips.

FACTS:

Lifescan, Inc., imports "One touch" strips used with blood glucose monitoring meters. These strips are included in the blood glucose monitoring kits and also are sold separately to replenish the strips in the kit. Lifescan states that these strips are designed specifically and used by diabetics in conjunction with Lifescan's blood glucose monitoring meter.

ISSUE:

Whether the blood glucose monitoring test strips ("test strips") are eligible for duty-free treatment under subheading 9817.00.96, HTSUS?

LAW AND ANALYSIS:

The Agreement on the Importation of Educational, Scientific and Cultural Materials, known as the Florence Agreement, is an international agreement drafted by the United Nations Educational, Scientific, and Cultural Organization ("UNESCO") and adopted by it in Florence, Italy in July 1950 (17 UST 1835; TIAS 6129).

It provides for duty-free treatment and the reduction of trade obstacles for imports of educational, scientific and cultural materials in the interest of facilitating the international free flow of ideas and information. Materials falling with the coverage of the Florence Agreement include: books, publications and documents; works of art and collector's pieces; visual and auditory materials; scientific instruments and apparatus; and articles for the blind.

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. The 97th Congress passed Pub. L. 97-446 to ratify the Nairobi Protocol in the U.S. The Senate stated in its Report that one of the goals of this law was to benefit the handicapped and show U.S. support for the rights of the handicapped. The Senate, however, did state that it did not intend "that an insignificant adaptation would result in duty-free treatment for an entire relatively expensive articlethe modification or adaptation must be significant so as to clearly render the article for use by handicapped persons." S. Rep. No. 97-564, 97th Cong. 2nd Sess. (1982). The Senate was concerned that persons would misuse this tariff provision to avoid paying duties on expensive products.

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 permanent provisions, 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 (“U.S. Note 4(a)”), 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), Chapter 98, HTSUS (“U.S. Note 4(b)”), 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.

Customs held in Headquarters Ruling Letter ("HRL") 561020, dated October 14,1998, that persons with diabetes are considered physically handicapped persons under U.S. Note 4(a) because they are limited in their ability to perform a broad range of jobs because they must be able to monitor their blood sugar, inject insulin if prescribed, and have work restrictions due to excessive urination, possible nausea, dizziness and fainting. Therefore, persons with diabetes suffer from a permanent or chronic physical impairment which substantially limits a major life activity and therefore, are considered physically handicapped persons under U.S. Note 4(a).

We also must determine if any of the U.S. Note 4(b) exclusions apply. Clearly, the test strips are not related to the treatment of an acute disability, related to a cosmetic item or a drug or medicine. 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 test strips do not cure or heal the patient's underlying condition; they merely assist the patient in monitoring their health on a daily basis. Therefore, the test strips are not therapeutic. Further, there is no diagnostic use for the test strips. Based on the above, we conclude that the test strips are not excluded from subheading 9817.00.96, HTSUS, treatment by U.S. Note 4(b).

The test strips must be “specially designed or adapted” for the use or benefit of handicapped persons, as required by the superior text in subheading 9817.00.96, HTSUS, to qualify for duty-free treatment under subheading 9817.00.96. It is clear in this case that the test strips are designed solely for the use of people with diabetes and that any other use would be secondary. Accordingly, the test strips are eligible for duty-free treatment under subheading 9817.00.96, HTSUS.

HOLDING:

The test strips are entitled to duty-free treatment under subheading 9817.00.96, HTSUS. Accordingly, the protest should be granted.

In accordance with Section 3A(11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision should be accomplished prior to mailing of this decision. Sixty days from the date of this decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.

Sincerely,

Myles B. Harmon, Director
Commercial Rulings Division

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