Recent CBP Rulings Explore 9817 Exemptions
CBP recently issued two rulings on duty-free classification under the Harmonized Tariff Schedule heading 9817, including one that unsuccessfully lobbied for a reconsideration of a previous ruling.
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In HQ H350718, Thrive Orthopedic asked CBP to reconsider the June 6 ruling NY N348800, arguing that its three models of prescription-based, non-ambulatory L-shape, length-adjustable braces should qualify for duty-free treatment.
In making its case before CBP, Thrive argued the following points: the brace's core function and design are tailored for the management of chronic ankle equinis, a progressive disabling condition; the brace's incidental use by dancers and athletes shouldn't disqualify the brace from duty-free treatment, per a 2017 Court of International Trade decision Sigvaris, Inc. v. United States; and chronic ankle equinis is a systemic and disabling condition.
Thrive also contended that the brace has physical properties not found in consumer orthotics, nor is it found on consumer marketplaces. Rather, the vast majority of sales are to licensed clinical providers, as the brace is an FDA Class I medical device that requires clinical oversight and is not designed for unsupervised consumer use.
"Thrive believes that the brace should not be considered a diagnostic tool nor a device intended for short-term therapeutic relief. Rather, its application is restorative and mobility-preserving, aligning it with the intent and legal representation of subheading 9817.00.96," CBP said, referring to one of the arguments Thrive made in support of its application.
In reviewing the prior ruling, CBP referred to medical literature and research available online.
"While you reaffirm your claim that the brace is in alignment with the definition of 'specially designed' outlined in the Sigvaris, we agree with the [National Commodity Specialty Division] that it is not," CBP said, referring to the June New York decision. "You claim that ankle equinis is a progressive chronic, disabling condition, but research allows us to believe that those with ankle equinis can recover from it with appropriate management (stretching, exercise, physical therapy, etc.) in a few months only. ... Our research also shows that the population of people who develop equinis and plantar fasciitis are not always those who suffer from long-standing disabilities, as they can also be caused for other reasons such as having your foot in a cast, tight calf muscles, etc."
Furthermore, while Thrive argued in its application that the brace is not intended for short-term relief, its descriptions of the brace on its website suggest otherwise, according to CBP.
"You offer that the brace is not available commercially and needs clinical supervision, to justify that use by the general public is unlikely and incidental. However, in addition to mentioning use by non-disabled consumers (professional athletes and performers) on your website, you also describe the brace to be the '… go-to non-surgical treatment for common foot and ankle conditions.' Thus, we believe that the probability of use by the general public is likely quite common," CBP said.
As a result, CBP upheld the June New York ruling and denied duty-free treatment for the brace.
In another ruling, HQ H349574, CBP sought to determine whether four components of importer Telesair's Bonhawa Respiratory Oxygen Platform were eligible for duty-free treatment under heading 9817.
The four components consist of a heated breathing circuit, a water chamber, a water chamber adapter and a nasal cannula used exclusively with respiratory humidifier, which is also a medical device.
In its application, the importer described the primary use of the respiratory humidifier as being for long-term oxygen therapy under prescription and supervision for chronic respiratory conditions such as chronic obstructive pulmonary disease, idiopathic pulmonary fibrosis and humidity deficits in tracheostomy patients. The device is also only available by prescription and is registered as a Class II medical device with the FDA, according to Telesair.
In reviewing Telesair's request, CBP noted that since the respiratory humidifier qualifies for duty-free treatment under heading 9817, so should its components.
As a result, the agency ruled that the components are eligible for 9817 classification.
"Here, the four single-use heated breathing circuit, water chamber, water chamber adapter, and nasal cannula are used exclusively with and are essential for the operation of the Bonhawa respiratory humidifier. Without them the device cannot function. All four component parts are designed and marketed specifically for use with the Bonhawa respiratory humidifier and are not intended for general purpose use with other respiratory devices," CBP said.