The eligibility of certain porcine pericardial tissue for preferential tariff treatment under the Nairobi Protocol from China

N297183 June 1, 2018 CLA-2-90:OT:RR:NC:N1:135 CATEGORY: Classification TARIFF NO.: 9817.00.96 Mr. Trace Garrett Medtronic, Inc. 710 Medtronic Parkway Northeast LS245 Minneapolis, MN 55432 RE: The eligibility of certain porcine pericardial tissue for preferential tariff treatment under the Nairobi Protocol from China Dear Mr. Garrett: In your letter dated May 11, 2018, you requested a tariff classification ruling. The merchandise at issue is identified as prepared porcine pericardial tissue used in the production of Medtronic’s Hancock and Mosaic aortic and mitral heart valves, which are for the replacement of malfunctioning native or prosthetic aortic valves with the option of aortic root replacement. The porcine pericardial tissue is said to be the primary material of the heart valve and is integral to the valve. The classification of the aortic and mitral heart valves has been addressed in New York Ruling N256827, dated September 16, 2014. You requested our consideration of the prepared porcine pericardial tissue for the eligibility for preferential tariff treatment under the Nairobi Protocol. The fresh porcine tissue is sourced from China and then undergoes a multi-step series of processes in China to adapt the tissue for exclusive use in the finished Medtronic heart valves. Four core processes are identified as harvesting, dissecting, fixation, and packaging. The tissue will first undergo processing to remove excess myocardium from the fresh tissue, and is then trimmed, sorted, and rinsed in saline solution. It is next dissected through further cleaning and trimming, attachment to fixtures, preparation for fixation by sorting, cutting and trimming to specification, tying of the coronaries on the tissue, preparing and attaching ID tags, and attaching the tissue to a fixture (stent, plugs, or rings). The tissue then undergoes “fixation” involving exposure to formulated glutaraldehyde in fixation rigs to cross link the collagen in the tissue for preservation. The product is then tested, sized, evaluated, verified, prepared with and preserved with various solutions, and packaged for shipping. The prepared tissue is imported into the United States under special permit issued by the United States Department of Agriculture (USDA) for assembly into the finished heart valve. You claim that “the tissue emerging from this processing in Shanghai is uniquely adapted to use as the core constituent component of the finished heart value assembled in the United States. The specially processed porcine tissue has been shaped and cut to fit this function and has no other possible use as imported. It is not suitable for human or animal consumption. Its use in the United States is strictly regulated by the USDA permit for its importation.” The Nairobi Protocol to the Agreement on the Importation of Educational, Scientific, and Cultural Materials Act of 1982, established the duty-free treatment for certain articles for the handicapped. Presidential Proclamation 5978 and Section 1121 of the Omnibus Trade and Competitiveness Act of 1988, provided for the implementation of the Nairobi Protocol into subheadings 9817.00.92, 9817.00.94, and 9817.00.96, Harmonized Tariff Schedule of the United States (HTSUS). These tariff provisions specifically state that "[a]rticles 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 article" are eligible for duty-free treatment. U.S. Note 4(a), subchapter XVII, 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." U.S. Note 4(b), subchapter XVII, Chapter 98, HTSUS, which establishes limits on classification of products in these subheadings, states as follows: (b) 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 primary issue regarding the prepared porcine pericardial tissue in question is whether it is a part "specifically designed or adapted" for use in the heart valve, which is specially designed or adapted for the use or benefit of the handicapped within the meaning of the Nairobi Protocol. Although the legislative history of the Nairobi Protocol discusses the concerns of Congress that the design, modification or adaptation of an article must be significant so as to clearly render the article for use by handicapped individuals, no specific definition of these terms was established by Congress. See Senate Report (Finance Committee) No. 97-564, (September 21, 1982). See also, Headquarters Ruling Letter (HRL) 951004 dated March 3, 1992. Since it is difficult to establish a clear definition of what is “specially designed or adapted," various factors must be utilized on a case-by-case basis to determine whether a given article is "specially designed or adapted" within the meaning of this statute. Based on the information supplied, it is the opinion of this office that the imported tissue designed for the heart valve is eligible for duty-free treatment under subheading 9817.00.96, HTSUS, which 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 article: Other.” No Merchandise Processing Fee (MPF) will apply to the imported product. Note that the requirement that the importer prepare and file a U.S. Department of Commerce form ITA-362P has been eliminated via a notice from the International Trade Administration, published in the Federal Register of June 1, 2010. Also note that this classification has no effect on any quota, visa, or restricted merchandise requirements or countervailing or dumping duties. Duty rates are provided for your convenience and are subject to change. The text of the most recent HTSUS and the accompanying duty rates are provided on World Wide Web at https://hts.usitc.gov/current. This ruling is being issued under the provisions of Part 177 of the Customs Regulations (19 C.F.R. 177). A copy of the ruling or the control number indicated above should be provided with the entry documents filed at the time this merchandise is imported. If you have any questions regarding the ruling, contact National Import Specialist Fei Chen at [email protected]. Sincerely, Steven A. Mack Director National Commodity Specialist Division